California May Require ADW Providers to Share Betting Content

Richard Shapiro, chairman of the California Horse Racing Board, called for the commission to require account wagering providers to share track betting content as a condition of licensing. The California Horse Racing Board

The chairman of the California Horse Racing Board called for the commission to require that account wagering providers share track betting content as a condition of future licensing.


“I believe it’s time for this board to step up on behalf of the fans and in the best interests of the industry,” Chairman Richard Shapiro told what was left of the audience at the end of a long meeting at Arcadia City Hall Sept. 27.


Since account wagering started in California in 2002, it has grown in popularity and now makes up about 15% off all wagering in the state.


Agreements between ADW companies and racetrack associations have prevented the sharing off wagering content in most cases, making it necessary for bettors to hold multiple accounts in order to wager at all tracks. Adding confusion to the problem for the public is the often changing nature of those agreements.


“I believe that the board has the right to adopt conditions for accepting account wagering operators’ licenses,” Shapiro said, ticking off three regulations in horse racing law that he said gives the CHRB the power to act.


“We want to give the public every opportunity to wager on California races,” he added. “It’s just time, for god’s sake, that we move this forward. Why is this treated any differently than simulcasting?”


Shapiro made it clear that he was not referring to sharing track broadcasts, limiting his remarks to wagering rights only.


He noted that because the three currently licensed ADW operators – TVG, XpressBet and Youbet – are up for license renewal in 2008, the timing is right.


Commissioners Jerry Moss and John Amerman applauded Shapiro’s stand, as did Charles Champion, CEO of Youbet, and Scott Daruty, representing both Xpressbet and twinspires,com, the Churchill Downs company that is also applying to do business in the state. The application will be heard in October.


“We’re hurting the sport by having all these crazy agreements that benefit only the parties involved,” Moss said.


Daruty said providers could work out compensation for sharing content.


Shapiro said he will appoint a CHRB committee to study a new license condition structure.


“If it takes six months to come up with, we’ll license the companies for that long and then have them re-apply,” he said.


New legislation governing ADW in California is awaiting the signature of Governor Arnold Schwarzenegger. The original bill expires on Dec. 31.


The replacement measure, which came in the form of an amended bill in the final week of the 2007 California legislative session earlier this month, gained approval from the lawmakers after more than a year’s discussion between the Thoroughbred Owners of California, ADW providers and others. It gets rid of the sunset provision of the original bill.

The bill addresses issues that the original one did not, such as providing parameters for “contractual compensation” paid to ADW providers for handling in-state, out-of-state and out-of-country races. The measure also gives the TOC a place in the negotiation and approval process of provider agreements and establishes a dispute resolution procedure for challenges to contracts for out-of-state races.

It also allocates a portion of the net revenue generated from ADW to a new jockey pension fund, an existing backstretch worker pension plan and a welfare account for horsemen and other personnel.