California Won't Order RGS Curb on Lewiston Hub

California regulators decided Feb. 20 that they will hold off on considering a cutoff of wagering at post time from betting through the Lewiston, Maine simulcast hub, which processes wagers for rebating giant Racing and Gaming Services.

Due to the preponderance of late wagers, California racing officials continue to struggle with what to do about fluctuations on winning horses once races have started. The California Horse Racing Board's Pari-Mutuel Operations Committee considered recommending the stop-bet action, but the idea was opposed by most track officials who spoke during the hearing. Most were concerned with the negative effect the move could have on simulcast handle, citing the experience of Fair Grounds.

CHRB staff believes that significant late money from the Lewiston hub has created some sensational last-second changes in odds.

On Jan. 12, Fair Grounds took what it hopes is corrective action, sending a stop-bet signal to the Lewiston hub at zero minutes to post. But such a move is not likely in the near future in the Golden State, where the CHRB refused a similar request by Hollywood Park in the wake of the Breeders' Cup Pick Six scandal in 2003.

After listening to industry observers, committee chairman Alan Landsburg noted, "The recommendation seems to be that this is not a good idea for California -- at this time."

Craig Fravel, vice president at Del Mar, said he was opposed "to singling out particular operations" for wagering cutoffs.

"California could be cutting off its nose to spite its face," he said with regard to the likely drop in off-track handle. He said there was no evidence that a zero-minute cutoff would rectify the problem.

"We struggled with (fluctuations) all summer and we are happy that there is no past posting going on," Fravel said. "I'd say 25 percent of the issue is past posting. The rest is how do we give confidence to the customer that what we believe to be the case is in fact, true."

Since the Fair Grounds action against the Lewiston hub took effect, RGS wagering on the track has declined by 70%, Rob Terry, vice president of simulcasting for the St. Kits, West Indies company told the committee. He contended that the decision was a major factor in overall handle dropping by more than 8% at the current meet. Prior to the stop-bet action, he said overall handle was down at the New Orleans track by 4.59%. Since Jan. 12, it is off by more than 12%, he said.

Terry said about 80% of wagers from RGS bettors come in the final two minutes.

"For the most part, our players have looked for other opportunities, other tracks to play," he said.

That's a significant amount of action. According to Terry, RGS has only 130 customers, of which 90 to 100 play daily with an average daily handle of about $1.3 million. Since Dec. 26, he said RGS has averaged about $370,000 a day on California races, $240,000 of that at Santa Anita.

Fair Grounds says that incidents of odds falling on winning horses after the start of races have declined since taking the action. But Terry disputed that. According to his tracking, 37% of the winners at Fair Grounds experienced dropping odds after the race started from Jan. 13 to Feb. 12.

"With one minute to post time, 50 percent or more of the final pool hasn't cycled through yet," he said following the meeting. "Of course there are going to be changes."

Under questions from a horsemen's representative, Terry said he did not know if RGS employs "batch wagering" technology, which allows some non-racing outlets to place massive bets at the last possible second.

Committee member Roger Licht noted that RGS customers are getting rebates of up to 18%.

John Van de Kamp, the president of The Thoroughbred Owners of California, noted the unfairness of that. "We have purse values that are static or going down while our costs are going up. I think it's time for the rebaters to tell us what they are willing to do to help the industry out."

Terry said RGS would be willing to meet with industry officials in the future to discuss that issue.

In the meantime, Dave Payton of the Scientific Games Network, whose tote company (formerly Autotote) is used in California, said his company is working on a way to send wagers from all sources directly to the state's wagering pools, giving the tracks "real time odds." But he said all tote companies need to be working together in order for it to function correctly.