California Industry Backs 'Instant Racing' Bill

The California horseracing industry has thrown its weight behind "Instant Racing" video games in the drive to offset declining economic fortunes, but a representative of the state's major casino tribes say it's nothing more than a smokescreen to break the Indians' monopoly and give the tracks slot machines.

Legislation introduced this week in Sacramento would authorize each of seven racing locales throughout the state to install up to 1,850 new video gambling machines that simulate real-time Thoroughbred racing. The bill, by Assemblyman Leland Yee (D-San Francisco), is to have a hearing June 27 before the Senate Governmental Organization Committee.

Backers of Instant Racing say the brightly-lit colorful device is not  a  slot machine, even though it resembles one and is activated when a player slips a quarter or more into the slot. Using rolling reels of replays of thousands of previously run races from tracks all over the country, players can use limited handicapping data to bet on the outcomes. Winners are paid off through a pari-mutuel system, according to Rick Baedeker, senior vice president for governmental affairs for Hollywood Park and Bay Meadows.

"It's not a slot machine. It's a racing game in a pretty package," said Baedeker, a longtime racetrack administrator. "Slot machines belong to the tribes, but pari-mutuel (wagering) is our area. We wish them all the luck in the world. They shouldn't want to put us out of business."

Alison Harvey, executive director of the California Tribal Business Alliance, representing six tribes with major casinos, says slots depend on "random number generators" and that the racing machines do the same thing only by substituting rolling reels of old races. "They are like slot machines in every other respect," she said. "They certainly look like slot machines. There is no skill involved in playing them."

Harvey said that since players can use the machines at their own rate of speed, she doesn't believe Instant Racing uses a true pari-mutuel system. She said casino tribes, who have nearly 60,000 slot machines, would fight what she sees as an encroachment into their voter-approved monopoly to limit slots to Indian land.

She also said that the racing industry always wants more, even when what they want ends up biting them, such as account deposit wagering. "Talk about creating your own competition," she said. "They told people to stay at home and wager from the living room. There's no need to come to the track.

"Now they're 'jonesin' to have a foot in the door that would allow them to operate these machines," she said. "Clearly, if they get them, there is no doubt in anyone's mind that they'll be back a year from now looking for something more."

Baedeker said that it is difficult to predict the impact Instant Racing would have on the state racing program. But if it was moderately successful with say, 500 machines at each venue producing $150 apiece per day, it would generate up to $57 million per year for purses, which would receive 30% of the take after operating expenses under the measure. Tracks, in that scenario, would receive about $16 million while the rest would be split between racing interests such as jockey welfare and backstretch workers, cities, county fairs, host fees and payment to the system's operating company.

"It's not a great money-maker for the tracks," he said. 

But by fattening purses, the live racing product - including field sizes, a packed stabling area and a stronger breeding program - is improved. That leads to an increase in wagering and spreads the fan base, Baedeker said.

The locations are the Los Angeles County Fair, Santa Anita, Hollywood Park, Los Alamitos and Del Mar, and at two track in Northern California, presumably Golden Gate Fields and Bay Meadows. Baedeker said  "it would take a long time" before they could come close to the 1,850-machine cap.

Drew Couto, president of the Thoroughbred Owners of California, said Instant Racing would be a big help to owners.

"California racing is at a tremendous disadvantage in terms of what other states are able to offer in purses with alternative gaming," he said, noting that the state is likely to drop further when Florida, New York and Pennsylvania add slots in the near future.

He said that if the tribes successfully block the legislation, racing must appeal to the state to force supplemental relief from them.