Some of Industry's Challenges Outlined at Conference

The pari-mutuel industry's next big challenge could be a battle with trial lawyers over pathological gambling, the head of the American Gaming Association said Oct. 1 during the North American Pari-Mutuel Regulators Association convention in Las Vegas.

Frank Fahrenkopf Jr., president and chief executive officer of the powerful trade association, said the gambling industry must be on its toes even tough polls suggest a large majority of Americans believe gaming is acceptable, and the final report from the National Gambling Impact Study Commission a few years back actually worked in favor of the industry.

Fahrenkopf said there are conflicting numbers as to how serious problem gambling is in the United States, depending on the source. In any event, a study said pari-mutuel wagering has the highest occurrence among forms of gambling, he said.

The battle lines were drawn when anti-gambling forces targeted the potential social costs of gambling rather than moral or economic issues, Fahrenkopf said.

"Folks, they're going to litigation," Fahrenkopf said. "The trial lawyers have settled on the gambling industry as the next tobacco industry. It's extremely, extremely serious."

Fahrenkopf said he has worked with the American Horse Council on some projects, but he urged the pari-mutuel industry to join up with commercial casinos, Native American casinos, and state lotteries to bolster responsible gaming programs.

"For too long, people in the horse racing industry have said, 'We're not gambling, we're a sport,' " Fahrenkopf said. "It may be an athletic event, but it's also gambling."

Fahrenkopf was the keynote speaker at a NAPRA luncheon. In comments made at a subsequent session, National Thoroughbred Racing Association commissioner Tim Smith said expanding the pari-mutuel industry's presence in Washington, D.C., remains a top priority.

Smith said the NTRA learned over last three or four years that "political challenges aren't insurmountable. We've been able to get fair hearings, but we need to redouble our current fund-raising efforts (and) devote more resources to this area. I really think our best political days are ahead of us."

Smith said Internet gambling legislation that was scheduled to come up for a vote on the House floor late Oct. 1 contains exemptions for horse racing. If it passes, though, the battle won't be over, he said, because it would slow the growth of account wagering. The bill would ban use of credit cards for Internet wagering.

Credit-card companies don't differentiate between legal and illegal gambling, so the NTRA's job as a trade association is to meet with credit-card companies to create a system whereby there is a differentiation, Smith said.

The NAPRA convention also featured a panel discussion titled "New Frontiers in Pari-Mutuel Wagering." It followed Smith's presentation, and one of the speakers was California Horse Racing Board chairman Alan Landsburg, who has taken issue with the NTRA in light of the large financial contribution California makes to the organization.

"If find it unusual to follow Tim Smith," Landsburg said as he kicked off his talk on account wagering in the Golden State. "I've been one of the gnats biting at his rear for a long time."

Landsburg is a strong proponent of more television time for horse racing. Though he said the NTRA is "tilted eastward," he also noted that time-zone differences make it difficult for California racing to be featured on national TV broadcasts.

"We wind up buried on ESPN2, a place that sometimes offers more golf than horse racing," Landsburg said.

Landsburg outlined how long it took for California to legalize account wagering, and the obstacles associated with it. The process involved racetracks, horsemen, the account-wagering providers, the legislature, and Gov. Gray Davis. There also were unions that needed to be on board, as well as the debate over whether account wagering would merely cannibalize on-track business.

"It was one of those moments of massive cooperation in the racing world," Landsburg said. "Corn never passed through a goose that fast."

As a TV man, Landsburg expressed dismay at how racing's focus is on numbers, something that could become even more prevalent as the industry moves toward hand-held betting devices in the next five to 10 years.

"All you'll be looking at is numbers," he said. "What else can you see on a screen that's two-by-three? Racing is a social activity, and socialization occurs even between people who don't even know each other ... We need to infuse our business with a sense of personality."