California Tracks Are 'Wait-and-See' on Gaming Initiative

By Jack Shinar
Will Nevada-style gambling come to California racetracks soon?

Not likely, said the president of the Federation of California Racetracks, Jack Liebau, who offered only lukewarm interest for a state gambling initiative that would allow racetracks to offer a full range of Las Vegas-style games, including slot machines.

"The ones who will benefit most from this will be the companies that provide slot machines," said Liebau, who oversees Magna Entertainment's California operation. "Racetracks would like to augment what we can offer the public with slot machines. We feel we've been at a disadvantage with other states that have been able to use slot machines at their facilities. But that's the way it is."

Liebau expressed skepticism about the initiative's origin and intent. The measure would abolish the ceiling on the number of slot machines a facility could install -- currently 2,000 -- and eliminate an Indian casino monopoly in the state on slots by also allowing card clubs and racetracks to have them.

Backers of "The Gaming Reform Act" are aiming for the November 2002 ballot.

"I don't think any racetrack has had anything to do with (the measure)," Liebau said. "I don't know anyone who's behind it, and (the sponsors) aren't saying, as far as I know. I understand it would get rid of the state horse racing board and the gambling control commission. What's behind that? It's difficult to know what to make of it right now."

The initiative would abolish the California Gambling Control Commission, the attorney general's Division of Gambling Control, the California Horse Racing Board, and the State Athletic Commission. It would replace them with the California Department of Gaming.

Under the proposal, all businesses that hold a state gaming license (currently 61 reservation casinos, more than 100 card clubs, and 14 racetracks, including the county fair circuit), could expand their offerings to include craps, roulette, and all other banking and percentage games, most of which are illegal in California. A five-member commission appointed by the governor would review license applicants for new gambling locations, which could be anywhere in the state, based on what sponsors say is highly restricted criteria. The gaming commission would supercede local authority on planning decisions.

A Palm Springs, Calif., consulting firm, The DeVille Group, is responsible for the initiative. Its spokesman, Craig Marlar, has retained a signature-collection firm to make sure it gets the slightly more than one million names the secretary of state's office requires for a measure to obtain a spot on the ballot.

Marlar said the signature drive can begin in January, once the measure's wording gets clearance from the state attorney general and legislative analyst offices. Until then, supporters, who have committed $2 million to the effort so far, would prefer to remain anonymous, Marlar said.

"I'm not trying to be mysterious, but I really can't say anything until we get a little further down the road," Marlar said. "Once the initiative gets (language) approval, everything will become public and we will announce its support."

The measure came about, he said, because no one is happy with the current system.

"The Indians are having a terrible time because certain tribes have compacts (to operate under state auspices) while others don't and can't get one," Marlar said. "They are restricted in the game limits that are imposed on them, can't cash checks or have ATMs, or give away a free drink. The card clubs and racetracks are unhappy because the Indians have a monopoly on slot machines. This will equalize things and resolve conflicts."

At Hollywood Park, where a card club is located, president Rick Baedecker declined to comment until he learned more about the initiative. He referred questions to a lobbyist for Churchill Downs, which owns the track, but the lobbyist couldn't be reached for comment.