Account Wagering a Work in Progress, Officials Say
Date Posted: 3/28/2002 2:53:28 PM
Last Updated: 3/29/2002 3:28:03 PM

by Jack Shinar

More than $14.5 million has been wagered through California's advance deposit wagering system in the first two months of operation, or about 3.5% of total handle. But while account wagering services had a burst of activity, officials said they were concerned about the leveling off of wagering and the number of new account holders over the past four weeks.

In their first full report to the California Horse Racing Board, representatives of XpressBet, the Television Games Network, and Youbet.com indicated March 28 they are satisfied with the progress of their ventures in the state. They plan to concentrate on marketing efforts to attract new account holders now that they have settled in.

"Our business plan is on track," said Magna Entertainment vice president Edward Hannah, whose XpressBet was initially hounded by hundreds of complaints due to the volume of new account holders. "We see tremendous possibilities."

Magna's XpressBet handled $9.2 million of the $13.1 million wagered through ADW as of March 17, the most recent figures broken down by the CHRB. That handle came mostly from wagering on Magna-owned Santa Anita Park and Golden Gate Fields. TVG handled $3.3 million placed mostly on out-of-state races and Los Alamitos Quarter Horse contests, and Youbet.com did $530,000 since beginning its operations in late February. Neither TVG or Youbet.com are taking bets on the Magna-owned tracks.

TVG and Youbet.com both anticipate big jumps in their account-wagering activity when Hollywood Park reopens April 24. However, Hollywood Park and the Thoroughbred Owners of California must first come to an agreement that would allow TVG and Youbet.com to accept account wagers in the state, CHRB chairman Alan Landsburg said.

"We have the seeds of an agreement," said TOC president John Van de Kamp, who has been negotiating with Hollywood Park president Rick Baedecker. Hollywood Park has an exclusive television agreement with TVG.

In his TOC analysis of account wagering, Van de Kamp reported that nearly $11 million of the total was wagered by California residents. He said a total of only $132,000 during that 49-day period (Jan. 25 to March 17) was wagered on Santa Anita from out-of-state customers.

Van de Kamp noted that 80% of the total amount was bet on Thoroughbred races. Of that, 71% was bet on the Southern California races, and 29% on Northern California races. The percentages are consistent with typical wagering patterns in the state.

Jack Liebau, director of California racing for Magna, said the tracks have experience an increase of 5% in purses thanks in part to account wagering. He noted that while attendance has been down slightly this winter, handle has enjoyed a slight increase.

"We at Magna are concerned about these issues," Hannah said. "We own these tracks. We will work closely with the CHRB."

Hannah said that of 7,802 account holders Xpressbet has signed up, 7,092 are California residents. Forty-eight percent of the handle so far has been wagered on Santa Anita, 13% on Golden Gate Fields, and 39% on Standardbred and out-of-state racing.

He claimed that wait times for customers have been reduced by hiring additional agents, and the Web site's speed--a source of many complaints--has "substantially improved" since early March after Xpressbet reconfigured its hardware. A new television program, "Santa Anita Now," which will appear on selected Saturday afternoons, has debuted on a Southern California television station with a reach of 5 million homes, Hannah said. He also said Magna is focusing on other marketing efforts, mainly advertising.

"We recognize that this is part of a long road," Hannah said.

John Hindman, vice president of communications for TVG, said his company will launch its programming on Adelphia cable in greater Los Angeles on April 1, with the potential to reach 100,000 digital customers initially. With more than 2,000 California customers, TVG currently reaches 8 million households nationwide through the satellite Dish TV Network. TVG has also started a new Web site, and Hindman said the initial response from customers has been favorable.

Advance deposit wagering handle from Jan. 25 to March 17 in California was $13.09 million, or 3.46% of the total handle in the Golden State during that period. Total handle includes money wagered on track, off track, and through account wagering services.

During the period Magna Entertainment's XpressBet handled $9.25 million. TV Games Network handled $3.3 million, and Youbet.com, which started midway through the sampling period, handled $529,000.

Account wagering had produced more than $600,000 for purses, $50,000 for owners and breeders, $600,000 in commissions, and $570,000 for the three hub operators, California Horse Racing Board officials said. Account wagering hasn't impacted on-track or off-track handle in California when 2002 numbers are compared with those of 2001, officials said.

On March 15, Youbet.com asked the CHRB to amend its operating plan to include live-operator wagering. The company hopes to start a beta test April 1 and launch a seven-day-a-week, 16-hour-a-day service.

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