Racing Responds to California Tribal Casino Plan

By Jack Shinar and Debbie Arrington

A proposed tribal mega-casino less than seven miles from Golden Gate Fields spurred a massive lobbying effort from California's $4.5-billion horse racing industry the week of Aug. 23.

The cry for survival made some impact in Sacramento, the state capital. Newspapers in Northern California reported Aug. 26 that the controversial deal, signed Aug. 23 by Gov. Arnold Schwarzenegger and the Lytton Band of Pomo Indians for the San Pablo Casino, is in trouble with the state legislature. It seemed unlikely the agreement, along with four other casino plans approved by Schwarzenegger, would be voted upon before the current session adjourns Aug. 27 for non-urgency matters.

"It ain't gonna happen," Senator Jackie Speier told the San Francisco Chronicle. "We want to act in good faith, so we want to postpone ratifying these for a period of time so we can have questions answered. It is preposterous to think that we could thoughtfully deliberate on these compacts in the last 72 hours of the legislative year."

Jack Liebau, president of the Bay Meadows Racing Association and a longtime California racing executive, and Rick Baedeker, president of Churchill Downs Inc.-owned Hollywood Park, were among those at the state capitol Aug. 25 to press the case. They said they see the casino, which would operate up to 2,500 slot machines with the option to apply to double that amount by 2008, not only as a huge threat to the 63-year-old Golden Gate Fields facility but to racing everywhere in the state.

"We're not talking about losing one racetrack, but racetracks all over California and the entire breeding industry," Liebau said. "That's 60,000 jobs at risk."

Of those, more than 3,000 union jobs would be lost at Golden Gate in Albany and Bay Meadows in San Mateo, according to track officials.

California Horse Racing Board chairman John Harris, a major owner and breeder and an influential member of the state's agri-business coalition, beseeched Schwarzenegger in an Aug. 24 letter to "begin working immediately to help California Thoroughbred racing." Harris predicted that San Pablo's expansion would mean the death of Golden Gate and the end of Thoroughbred racing throughout Northern California, including the summer fairs, which receive more than $40 million annually from racing.

In a similar letter, the Thoroughbred Owners of California urged legislators to vote "no" on the casino ratification. The California Thoroughbred Breeders' Association has also been actively involved in the lobbying effort.

"We've been pleasantly surprised by the response and appreciative of the support we've found in the legislature," Liebau said. "We don't think the governor and his staff realized how this compact could jeopardize horse racing."

Southern California racing needs healthy tracks in Northern California, Baedeker said. "We're already isolated in California in terms of our horse population," he said. "North and South are interdependent. If the North is affected by a casino, the ripple will be felt all the way to the South and will have devastating effects. We just want to make sure everybody knows what's at stake. We're being taken seriously. The governor didn't know the impact."

Said Liebau: "It's not just Golden Gate at stake--it's the racetrack industry as we know it in California. We're an island very much to ourselves. We're very dependent on the California breeding industry. If all of a sudden we lose a place to race, everyone will be looking for a new place to run.

"California tracks get hit by a double whammy. Not only is there competition from Indian gaming, but in other states, racetracks are getting slot machines to supplement their purses. Their purses now are competing directly with California. Even in places like New Mexico, which was never a major racing state from a Thoroughbred standpoint, their purses are equal or greater than Northern California.

"Major circuits like Pennsylvania are predicting huge increases with slots. All of a sudden, they could offer money double of ours. And if this casino happens, too, we'll see an exodus of horses."

Baedeker, formerly general manager at The Woodlands in Kansas City, Kan., said he saw the damage casinos could do to a thriving race business.

"We opened with great success," he said. "But within four years, we were competing with six (casino) riverboats and barely surviving."

The track scaled back its horseracing program to the bare minimum and now operates mostly as a Greyhound racing facility.

Bay Area tracks feel the pinch of Indian casinos even when they aren't in their immediate back yards. Slot machines attract senior citizens and $2 bettors away from the races, Liebau said.

"Busloads leave San Francisco for Thunder Valley or Cache Creek or wherever every day," he said.