CHRB Targets Offshore Gambling Advertisements

The California Horse Racing Board heard arguments April 24 on the issue of publications and radio shows in the state selling advertising to off-shore wagering operations. Residents of California are only able to legally bet through facilities licensed by the state, so wagering with offshore companies is in violation of state law.

Offshore wagering operations have been a hot topic across the industry because they don't return revenue to racetracks that provide the signals.

"The important thing to keep in mind is that these ads are not for anybody who contributes one cent to, not only California racing, but racing in general," CHRB chairman Roger Licht, CHRB said. "These are essentially bookmakers who fill the Racing Form with full-page ads."

Daily Racing Form generates about $500,000 a year in revenue from the ads, according to DRF president Charles Hayward, who appeared before the board voluntarily to present his company's opinion that its right to accept the ads falls under the First Amendment of the Constitution and the right of commercial free speech.

"The sports books that advertise (with DRF) are doing $1 billion a year in sports betting," Hayward said, "(and) less than $25 million a year in horseracing. That translates to about $750,000 a year in revenue lost to racing in the entire country."

Representatives of all major California tracks expressed their displeasure with the ads but also recognized the publication's First Amendment rights. All acknowledged DRF's contribution to the sport, and many said they'd prefer to not take sanctions against the publication, such as preventing sales at wagering facilities.

"The last thing we want to do is make the racing fan pay the price," Hollywood Park president Rick Baedecker said. "But it comes down to a business decision. It's unfortunate that the horse racing board had to get involved here. Our hope is that the Daily Racing Form does not accept advertisements (from the offshore wagering operations)."

Said Magna Entertainment president Jack Liebau, who spoke on behalf of Santa Anita Park, Golden Gate Fields and Bay Meadows: "I was reluctant to speak because I just don't know the answer. It's extremely important that the Racing Form remain a viable (entity), and since a constitutional amendment protects their right (to sell the ads), I don't see how anyone can violate that right."

Board member John Harris echoed those sentiments.

"We could ask the tracks not to allow the Form to be sold on their premises," Harris said. "But nobody wants that."

Del Mar president Joe Harper commended the Form for its commitment to racing and its tremendous support to all the California tracks, both financially and otherwise, but said he doesn't like the ads. "How important are (the ads) to the bottom line?" Harper said.

Commissioner Marie Moretti suggested the ads be reworded or some sort of a notification be made so California readers are made aware of the illegality of wagering with the off-shore companies

"I'd like to encourage continued discussion to come up with some disclosure or generic language to appear in the ads (notifying readers in California that the advertised betting operation is illegal in California)," Moretti said.

The board was favorable to the idea and agreed to discuss the language the DRF might use before the May CHRB meeting in Pleasanton.

Board member Alan Landsburg made a motion to involve the FCC in the matter of radio shows that currently accept advertising from offshore gaming companies. Of the three popular Southern California programs, two currently accept the advertising spots. Landsburg said because the FCC licenses the airwaves, the board could appeal to that body to take action. The motion was unanimously approved.

In other CHRB business, Golden Gate Fields general manager Peter Tunney gave a status report on the construction of the equine hospital located on track grounds. The CHRB chastised Golden Gate's parent company, Magna Entertainment, at its March meeting for lack of progress and threatened daily fines if "substantial progress" hadn't been made by April's session.

Armed with photographs, Tunney informed the board Golden Gate had fired the original contractor after the initial shell of the facility had been completed. Tunney said since the March meeting, the building's framing, insulation, and rough outside plumbing and electrical work had been completed, as well as the installation of the overhead hoist mechanism to aid post-operative horses. He also said a surgical table had been purchased and will be stored at the track, along with several items saved from the previous facility.

The project must be completed by July 31 according to a CHRB timeline.

The board also suspended two rules for Breeders' Cup World Thoroughbred Championships at Santa Anita Park Oct. 25. All horses will be able to run as separate betting interests, even those with common ownership, and no advertising will be allowed on the jockeys' pants.

The Oak Tree Racing Association was granted the go-ahead to offer Breeders' Cup future wagering and head-to-head wagering, both of which were introduced for the 2002 Breeders' Cup.