Calfornia Veto Will Impact Pari-Mutuel Industry

California Gov. Gray Davis, who is opposed to the expansion of gambling in his state, has vetoed legislation that would have paved the way for account wagering. The decision is a blow to racetracks and account-wagering providers who hoped for serious growth in pari-mutuel handle.

The bill, which would also have allowed backstretch workers to unionize, was among several vetoed by Davis Sept. 30. Davis reportedly vetoed the legislation at 11:45 p.m. (PDT) -- 15 minutes before the deadline -- but news of the veto was kept quiet for almost 24 hours by the governor's office.

"If this bill contained only the backstretch provisions, I would sign it," Davis said in a written statement issued by his office. "However, I cannot support the provisions lifting the state ban on Internet and telephone wagering. Changing state law to allow wagering via the Internet and telephone would be a major change in the status quo and, I believe, a significant expansion of gambling in California."

Because of the late release of information by the governor's office, most California racing officials were unaware of the veto until late in the day Oct. 1.

Assembly Bill 2760 melded two proposals: One would have paved the way for Internet wagering on California horse races, while the other followed on the heels of an investigation by the Los Angeles Times that claimed backstretch workers at several California tracks live in squalor and less-than-safe conditions.

The authors of the legislation believed that linking the issues would
assure passage of both. Davis didn't rebuke the authors, but indicated he remains adamantly opposed to expanding the scope of options for horse players.

The TV Games Network, which offers an interactive wagering service, views California as prime growth territory. In a statement released late Monday afternoon, chief executive officer Mark Wilson expressed the company's position on the developments in California.

"We are disappointed that Governor Davis did not sign the bill or simply allow it to become law," Wilson said. "His decision to veto AB 2760 was difficult to rationalize. The bill was critical to the California racing industry, was overwhelmingly supported by the legislature (56-6 in the Assembly, and 38-1 in the state Senate), and, contrary to the governor's view, simply did not represent an expansion of gambling."

Wilson said account wagering by California residents has been conducted for years through out-of-state providers. "In effect, the governor has declined an opportunity to regulate an ongoing gaming activity in his state and, in the process, is costing the California racing agribusiness millions of dollars that today are flowing out of the state without benefiting Californians.

"From a company perspective, we look forward to launching TVG in additional markets, both domestic and international, in the near future, and will continue to explore alternative avenues to support our partners in the California racing industry.

In his statement, Davis said: "(This bill) would open the door to children and teenagers placing bets using their parents' accounts over the Internet," Davis said. "And it would allow continual betting through commercial betting systems without being limited by the racing season of any particular racing association."

In closing, Davis said the only portion of the legislation he favored was the part that offered protection to backstretch workers. "If the Legislature sends me a bill to protect backstretch employees from being subjected to dismal living and working conditions, I will sign it," Davis said.