Simulcasts Fail to Hit the Jackpot : Las Vegas Not Ready to Bet on the Success of Televised Racing

When live telecasts of races from Southern California tracks were first piped into Las Vegas horse books eight months ago, the eyes of the hotel-casino owners and the track operators spun like slot machines. And instead of showing cherries and lemons, they came up dollar signs, all the way across.

But that was eight months ago. Now, no one is hollering that he’s hit the jackpot. Simulcasting--the word the racing industry applies to live televising of races used for betting purposes--has hardly been the bonanza it was envisioned to be. It has divided the hotel-casino owners in Las Vegas, perplexed the licensed disseminators responsible for relaying the satellite signal from the tracks to the horse books, and disappointed track operators in California.

Outside of that, simulcasting has been great for everybody.

One day last week, between simulcasts of races from Belmont Park in New York and Hawthorne Race Course near Chicago, the in-house announcer in the horse book at the Stardust Hotel said: “Starting next week (probably this Friday), we’ll have on TV pictures of the harness races from Los Alamitos. Isn’t that wonderful?”

Mock laughter filled the room of about 100 horseplayers.

The Stardust is one of the few major hotels that has carried simulcasts of the races from Del Mar this summer. Southern California simulcasts began here with Santa Anita at the start of the year and were followed by Hollywood Park from April to July.

But shortly before the Del Mar season opened July 24, a group of eight hotels and race books told disseminator Tommy Roberts that costs were prohibitive. Among the dropouts were Caesars Palace, the MGM Grand, the Union Plaza and the Barbary Coast.

Roberts, owner of a Philadelphia radio station and the former general manager of Hialeah, renegotiated his contract with Del Mar, which was left with a daily net rights fee of $3,500 instead of $4,500. The $3,500 matched what Santa Anita received, but was $2,000 a day less than Hollywood Park was paid.

Nevertheless, Caesars and the seven other hotels aren’t televising the Del Mar races, just taking bets on them as they did in the years that preceded simulcasting. Since simulcasting began here with New York’s races three years ago, the pattern has been that horseplayers bet more on races they can watch.

Both Roberts and Joe Harper, the general manager of Del Mar, are disenchanted over the lack of participation by Caesars and the others. Roberts has talked about suing at least one of the defecting hotels, which he says reneged on a contract.

Technical costs on top of the rights fee drove Roberts’ daily overhead to about $7,500, money he expected to get back, plus a 10% profit, from the race book operators.

“This was a boycott, headed by the Union Plaza, that was designed to drive the price down,” Roberts said. “There are segments of the gambling industry in Nevada that are working against simulcasting because of old-fashioned attitudes. It’s this old thinking that is retarding the concept.

“There are people at the Union Plaza, for example, who think that the tracks in California ought to give us their races for nothing, because Las Vegas is helping them promote their business. Simulcasting should be a horseplayers’ heaven, but Nevada isn’t exploiting it. Nobody in Las Vegas is advertising nationally that a horseplayer can come to town and watch live telecasts from 10 in the morning until 11 at night.”

In a state where about $3 billion a year is wagered at casinos and on sports, horse racing has generally been a tough sell. Las Vegas Downs, this town’s only horse track, closed about 20 years ago after several years of heavy losses. The horse wheel just doesn’t spin fast enough. It’s 30 minutes between races and some of them last longer than two minutes before you know who’s won. And television--the horse books receive the same picture that’s seen on the monitors at the track--doesn’t capture the intimate excitement the way it does with other sports.

Last year, $1.1 billion was bet on sports in Nevada, but only 27% of that--$184 million--was wagered on racing. Probably because of simulcasting, betting on racing increased by 22% over 1983, but betting on all other sports showed a jump of 44%.

Betting on racing still doesn’t come close to $1 million a day in Nevada, a plateau Roberts figures is needed for the state to start its own parimutuel system. The way it is now, the horse books pay track odds, with limits on exotic bets like exactas and trifectas. A parimutuel system would enable Nevada to establish its own separate betting pool for each race and pay off accordingly.

Of an estimated 13 million annual visitors to Las Vegas, more than 60% are from California. Chuck DiRocco, another of the race-book disseminators, says that before simulcasting, about 80% of the town’s horse bets were on California tracks, with New York getting only 10%.

“But that changed drastically when the New York simulcasts started arriving in ‘83,” DiRocco said. “People’s betting habits changed, because they could see what they were betting on. Chicago, which got into simulcasting here after New York, gets more play on its races now than Northern California tracks do.”

Scott Schettler, manager of the race and sports book at the Stardust, estimates that 40% of his horse betting is on the California tracks. Caesars and the Stardust rank 1-2 in town in overall horse betting, according to Schettler.

“We can give Las Vegas a product that it desperately needs,” said Marge Everett, chief operating officer of Hollywood Park. Everett said that Hollywood was able to extract a higher rights fee than either Santa Anita or Del Mar through the talents of Neil Papiano, the track’s negotiator. “That’s what makes (him) the best lawyer in the business,” she said.

Papiano, however, may find it difficult to derive even the same $5,500 daily rights fee when Hollywood negotiates a contract for its late-fall meeting.

“They’ll never see $5,500 again,” said DiRocco, who lost out to Roberts in bidding for Hollywood’s spring-summer meeting. “Santa Anita was the most successful track here in terms of play, and Hollywood’s handle might have been off 50% from Santa Anita’s. There’s a more sophisticated player who goes into the books every day. He’s trying to make a living, and you can’t do it betting all those 2-year-old races at Hollywood Park.”

The tracks actually see less than 50% of the rights money. The first 10% goes to the state, the balance being split between the track and the horsemen for purse money. The daily breakdown at Del Mar, for example, is $350 for California, $1,575 for the track and $1,575 for horsemen’s purses.

Said Harper: “It’s like found money but you worry about underpricing your product. For what little we’re getting this summer, and for what minimum exposure we’re getting in Vegas, you wonder if it’s worth all the aggravation. Sometimes I wonder if we wouldn’t be better off having those extra eight spots in the parking lot instead of the space that satellite dish takes up.”

Donald L. Allison, president of Caesars Palace, figures that the California tracks shouldn’t receive any rights fee and characterizes the disseminators as “greedy little middlemen.” The New York tracks have a simulcasting contract directly with Caesars, which then farms out the details to DiRocco.

Caesars has just completed a remodeled, multimillion-dollar race and sports book area. The 150-foot-long brass-rail bar, the 324-seat buffet and 60 circular-ceiling banners are nice touches, but for a horseplayer the room is over-decorated and under-lighted. The large high-tech entry and result board, which accommodates four tracks, is hard to read and the recessed ceiling lights make horseplayers squint to read their Daily Racing Forms.

“It takes you about an hour before your eyes get used to reading that board,” Harper said.

The Stardust has only one-fourth the room of Caesars, but still its horse room seems more functional.

“I don’t want this to come off as a knock at Caesars because I got enough problems, but I think what we’ve got here is a real book joint,” the Stardust’s Schettler said. “You lose a race here and you can tear up your ticket and throw it on the floor. You come here to root for your horse, drink a beer and eat a hot dog, just like you might at the track.”

Schettler has high hopes for simulcasting. “It could save racing in many areas,” he said. “I wish I could figure out a way that we could be carrying races 24 hours a day.”

Cliff Goodrich, a vice president at Santa Anita, said that when the Oak Tree season opens Oct. 2, Santa Anita will expand its simulcasting activities by sending a live picture into 12 horse books in Mexico.

“We feel simulcasting is a can’t-lose proposition,” Goodrich says. “It gives Santa Anita greater exposure, while not hurting on-track attendance.”