Racing Bets to Finance Calif. Homeless Shelter

Cal Expo will provide a portion of its harness racing handle to support a Sacramento, Calif., homeless shelter facing possible closure under an agreement announced June 6 by a California state assemblyman and exposition officials.

The Cal Expo Board of Directors will also open the bidding process for conducting the only harness meet in the state. Capitol Racing, who has been in charge since it was originally awarded a three-year contract in 1997, holds the operating license, set to expire at the end of the current season July 26.

The moves by Cal Expo officials came in response to a bill introduced in the legislature by Assemblyman Darrell Steinberg (D-Sacramento) earlier in the week. AB 895, to be withdrawn, would have required Cal Expo to re-open the bidding process and direct additional money through the new lease to the shelter, which is located on the State Fair grounds.

Instead, Cal Expo has agreed to provide one quarter of one percent of its take from the total handle to Sacramento County for the operation of the shelter. A winter overflow facility, it provided temporary housing for more than 2,100 people last year but faces severe cuts when the board of supervisors approves its budget later this month. Based on wagering last year, this unusual marriage of racing and human services would mean about $400,000 annually.

"The track and the homeless shelter share the same grounds," noted Sam Delson, principal consultant to Steinberg, "so it is not as much of a stretch as some might believe."

He said using a percentage of the wagering take from Cal Expo was fair.

"Essentially, Cal Expo is agreeing to pay approximately $400,000," Delson said. "If the handle increases, the amount will be more, and if the handle declines, the amount will be less."

Capitol, which has used satellite and account wagering to transform the track into a $940,000-a-night enterprise, has twice received extensions since the original contract expired in 2000. It contends through a lawsuit that its current license extension should not expire until 2005.

Capitol Racing issued no statement. General manager Alan Horowitz could not be reached for comment and did not respond to phone messages.

Developer Lloyd Arnold, who formerly operated the Cal Expo meet when it was Golden Bear Racing, lost a Superior Court lawsuit in March that would have forced Cal Expo to open bidding on its contract. The judge ruled that Cal Expo had not violated the law even though it was not in line with competitive bidding practice.

Cal Expo's board of directors is expected to act later this month by opening the bidding process on a five-year contract. It must also approve the take-out on its share of the harness handle. Delson said the action would not require approval by the legislature or the California Horse Racing Board.

"The amount is determined by the size of the handle, but it is not taken out of the handle," he said. "It is paid by Cal Expo, which is free to allocate its resources in this manner."

Brian May, Cal Expo assistant manager, said at a news conference that horse racing funds would start going to the shelter with the beginning of the next racing season in late September. Total handle on last year's Cal Expo races was $164 million.