Account Wagering Given Final Approval By California Board

By Jack Shinar

The long-winding process of making legal account wagering part of California's horse racing landscape got a quick approval Friday, Nov. 30, from the state Horse Racing Board.

With little comment, the seven-member board gave unanimous consent to a series of 14 regulations that will provide the framework for Advanced Deposit Wagering (ADW) in the state.

"This isn't the salvation of racing," said board Chairman Alan Landsburg following the action. "It's just a step along the road we all have to take. It represents new and better ways to market our product and grow our audience."

Signed into law by Gov. Gray Davis on Aug. 13, ADW becomes legal in California on Jan. 1. But it probably will take until late January or early February before California's racing fans can start making legal bets from home via computer, phone or interactive cable TV.

"We're not close to the finish line yet," said commissioner John Harris, "but we're at the 1/16th pole."

The revised regulations are the culmination of three years of work by the board's staff. California modeled its account-wagering plan after similar operations in New York and Pennsylvania.

Currently, 12 states have OK'd home betting, with Massachusetts the latest convert last week. California, accounting for about 13 percent of the nation's annual horse-racing handle, is the largest market in the nation.

"Obviously, all of us are excited about what this can bring to California," said commissioner Marie Moretti. "This will benefit all of California racing, from the backstretch workers to the fans."

With so many details hashed out by the CHRB staff after receiving industry and public input, actual approval at the board meeting at UC Davis came without much debate. But the new regulations will take some time to work their way into reality.

The account-wagering rules now must be reviewed by the state's Office of Administrative Law, a process that usually takes at least 30 days, said CHRB Executive Director Roy Wood Jr. In addition, the board must license potential hubs and other entities that would accept the bets. Wood said the CHRB will immediately begin accepting applications for such licenses.

Applicants must post a $500,000 security bond, protecting betting pools and customers, and provide information demonstrating financial resources as well the ability to protect confidentiality of account information.

The next scheduled board meeting is Jan. 24 in Arcadia, which is most likely the earliest the CHRB can complete its own review of applicants and grant licenses, Wood said.

Account wagering could create a huge windfall for racing in the state. Officials estimate that California is losing $25 million a year in revenues that otherwise would have been deducted from bets that state residents already make via off-shore accounts.

The additional funds will be used to increase purses to attract more and better horses to California, and to improve living and working conditions for backstretch employees.

Still to be ironed out is which entities will be licensed to accept home wagers and who will serve as hubs. The Santa Monica- based Television Games Network, with its betting hub in Oregon, has exclusive rights to broadcast racing from Hollywood Park, Del Mar and the Oak Tree meeting at Santa Anita.

Magna Entertainment Corp., owners of Santa Anita Park, Golden Gate Fields and Bay Meadows Race Course, has been working on its own nationwide system, but has not released any details, including whether or not there will be live home television broadcasting from its tracks.

Harris noted his concern after the ADW public hearing.

"Personally, nothing can take the place of live racing as far as I'm concerned," he said. "But televising our races is the way to get the sport before the public and find new fans. Betting by computer or telephone is really only a convenience for the hard-core fan. It doesn't do anything to help our sport."

Landsburg urged that all interests get together for the benefit of racing.

"Greed will not be greeted with a friendly shake," he warned. "We will take severe action if greed outweighs (racing) business priorities. Like anything else, this will go through some growing pains. It's like a new child and you just hope it will realize its full
potential."