Board asking more from racetracks
for license
Friday, May
27, 2005 - from the California Horse
Racing Board
California racing
commissioners intend to place more demands on racing
associations in the areas of racetrack security, marketing
and advertising, and providing financial information, and
they took steps in that direction Thursday by approving rule
amendments for public notice to incorporate those
requirements in the application for license to run a race
meeting.
Improving security in the stable area has been a high
priority for the California Horse Racing Board for the last
year, and imposing requirements for racing associations to
assist in that effort as a condition of license is the
latest move in a continuing process. All racing associations
already are voluntarily conducting TCO2 testing, which has
all but eliminated the practice known as "milkshaking," and
by including TCO2 testing and related security requirements
in the license application, the Board ensures the program
will continue.
Electronic surveillance is another security matter addressed
in the revised license application. Racing associations will
need to provide the location and number of video
surveillance cameras for the detention barn and stable area.
This year the CHRB also has sharpened its focus on marketing
and advertising. Commissioner Richard Shapiro formed an ad
hoc committee of racing executives, marketing chiefs, fans,
and others to analyze the way the horseracing industry
promotes itself.
Described as the "Bring Back the Fans Committee" because the
primary purpose is to increase attendance at the live
racetrack, the committee has reviewed marketing plans for
all of the race meets in the state. However, only two of the
racing associations provided financial information to the
committee detailing how much is spent on marketing and
advertising. Though perfectly willing to discuss many
details of their marketing programs, most of the
associations balked at providing financial details,
indicating their belief that such budget information is
proprietary in nature and not subject to public disclosure.
At the CHRB meeting Thursday, Hollywood Park President Rick
Baedeker, speaking on behalf of the federation of California
racing associations, elaborated on the reasons racing
associations believe marketing-dollar information should not
be included in the licensing process. Essentially, he said
it opened the door for racing commissioners to micromanage
an aspect of a racetrack’s business operation. He said that
instead of officially incorporating such budget details in
the licensing process, Hollywood Park, for one, would be
willing to provide such details "one on one" to any racing
commissioner.
But the four racing commissioners attending the meeting
Thursday -– Chairman John Harris, Vice Chairman William
Bianco, Commissioner John Sperry, and Shapiro -– were not
persuaded by Baedeker.
"Your marketing efforts affect so many people in the
industry, it really should be public information," said
Harris. "If racing was doing well right now, it might not be
so important, but the way things are, I would like to see
more transparency."
Shapiro added, "Racing is going through some tough times
right now, and I understand that you need help, but it is
difficult for me to be an advocate when I don’t really
understand what your bottom line is -– how much you are
spending and what your results are. We need to make sure
racing associations are putting forth the effort and
expenditures to justify us granting them a license -– that
they are spending money and helping the game rather than
just milking it."
The four racing commissioners decided to leave the marketing
budget requirement in the proposed amendment but put off a
final decision until the next meeting, when the other three
racing commissioners who were unable to attend the meeting
Thursday -– Sheryl Granzella, Marie Moretti, and Jerry Moss
-– are likely to be present.
A third proposed change to the license application would
require applicants to file an audited financial statement of
the actual license holder. The commissioners concurred that
a financial statement from a parent company would meet the
requirement if the parent company completely guaranteed the
financial obligations of the subsidiary.
All of the proposed changes were approved for 15-day public
notice, and will be discussed again at the June 30 meeting
of the CHRB in Pleasanton.
The commissioners tackled another complex issue in a
preliminary discussion of procedures used by racetrack
simulcast coordinators to verify the identity and legitimacy
of out-of-state simulcast customers and whether rebating is
practiced at any of these locations.
Rebating, which is the practice of discounting the losses of
customers, reportedly by as much as 10 percent, is
prohibited by California law.
Although it is suspected that some offshore wagering sites
offer such rebates, the practice has never been proven, and
the racing signal of California races has never been cut off
for that reason alone to suspected rebaters, who represent a
significant portion of the racing handle.
"We need to better understand what is going on," said
Shapiro. "If we decide that doing business with rebaters is
in the best interests of California horse racing, then we
should try to get the law changed rather than just not
enforcing it.
"The issues are complex. Who are the rebaters? To what
extent are rebates being offered? What agreements are in
place between the racetracks and these sites regarding
taking bets from Californians?"
Harris expressed concern that California bettors conceivably
could be at a disadvantage to those receiving rebates, and
cited the need to level the playing field.
In referring the matter to the CHRB’s Pari-Mutuel Operations
Committee, he asked the committee to consider all of the
possible ramifications of rebating and to try to quantify
the cost and benefits of the practice.
In other business, the Board approved the Sonoma County
Fair’s license to conduct a meet in Santa Rosa from July 27
through August 8. The fair has spent $3 million on
improvements to the facility, including a new turf course,
which is a major advancement for Northern California racing.
Horsemen have long complained about the absence of turf
racing through much of the fair season. The addition of turf
racing in the middle of that season might convince some
owners and trainers to keep horses in California that might
otherwise be shipped out of state for turf races.
The Board also approved licenses for the Del Mar
Thoroughbred Club (July 20 through September 7) and the
Solano County Fair in Vallejo (July 13 through July 25).
The Sonoma and Solano fair dates are part of the revised
fair schedule approved in total by the commissioners
Thursday. The revised schedule was prompted by the decision
by the California State Fair and Exposition to run a harness
meet this year instead of its traditional fair race meet.
The revised schedule eliminates the Sacramento fair meet
that is traditionally run in late August and early
September. After the Sonoma meet ends August 8, the fair
circuit will move to Bay Meadows for the San Mateo County
Fair meet from August 10 through August 25, then Bay Meadows
will commence its thoroughbred meet on August 26 without an
overlap with any fair meet. The Ferndale meet is unchanged,
set for August 11 through August 21.
The Board authorized the Los Angeles County Fair to adjust
its dates schedule by extending its meet by one day and
closing on Monday, September 26, with no racing on Tuesday,
September 13, and Tuesday, September 20, resulting in a
16-day meet that will open September 9 as originally
approved.
The Board approved for public notice rule amendments
relating to multiple-race wagers, such as the Pick 6. One
change would allow the posting of "will pays" for the final
race in the wagering series. Another change concerns races
moved from the turf to the dirt, usually due to adverse
weather conditions. When this switch to dirt occurs after
the wagering pools have closed for a multiple-race wager,
all horses in that particular race will be considered
winners on the multiple-race wager.
The Board approved allocations for contracts with stewards,
official veterinarians, and other services for 2005-2006.
The allocation is $1,598,000 for steward services and
$494,000 for veterinarians.
To deal with the problem of unexpected delays in the equine
drug-testing program, the Board adopted a regulatory
amendment that extends by three days -– from 18 to 21 -– the
time allowed for the notification of a trainer of a
potential positive test.
