Los Alamitos No. 2, Hollypark No. 11 as Outlets for Lottery

Mark Michalko, executive director of the California State Lottery Commission, said Wednesday that Los Alamitos and Hollywood Park, the only two race tracks in the state that sell lottery tickets, do more business than most of the 21,000 lottery retailers in the state.

Michalko, speaking at the Harness Tracks of America convention, an annual meeting of track operators, said that Los Alamitos ranked second in total sales and Hollywood Park 11th.

In Sacramento, Bob Taylor, a spokesman for the lottery commission, said that Michalko was using statistics through Feb. 3, which included the first four months that the lottery has been offered in California.

Los Alamitos’ sales for that period totaled 699,000 tickets, and Hollywood Park’s total was 402,000. Also, Taylor said, Los Alamitos ranks third in the state in sales for the current game, with a total of about 140,000 tickets. Hollywood Park is not racing at this time.

The only lottery outlet that outsold Los Alamitos during the Oct. 3-Feb. 3 period was the Ping Yuen drugstore, in the heart of San Francisco’s Chinatown, which sold more than 776,000 tickets at $1 apiece.

The sale of lottery tickets by Los Alamitos and Hollywood Park, tracks with common ownership, has been opposed by other racing groups and race tracks, which lobbied strongly against the legalization of the lottery and now say that the games are partly responsible for declining business.

Since the lottery began in California, no area track has had a season that was better than the year before.

The Oak Tree meeting at Santa Anita was off 2.7% in attendance and 10.7% in handle; Hollywood Park’s thoroughbred meeting showed respective drops of 7.1% and 1.8%; Los Alamitos’ quarter-horse figures were down about 12% and 9%; the Orange County Fair’s mixed-breed meeting was so disappointing that different dates were requested for this year; and Santa Anita is off about 6% in attendance while up just slightly in handle this season.

“(Race tracks selling lottery tickets) is like a Ford dealer telling his customers why they should buy Buicks,” Gerald Eyrich told the harness group here Wednesday. Eyrich, an associate professor at Claremont-McKenna College, has been a marketing consultant for Santa Anita for 15 years.

Santa Anita reportedly is the first race track in the United States to fight a state lottery, having accused the California commission of “false and misleading advertising and marketing tactics.”

Besides opposing the lottery, the California division of the Horsemen’s Benevolent and Protective Assn., which represents horse owners and trainers, protested last year to the California Horse Racing Commission about the sale of lottery tickets at Los Alamitos and Hollywood Park.

“We (the horsemen and the tracks) were partners in participating to fight the lottery,” said Bart Heller, a trainer who heads the California HBPA. “The horsemen will get nothing out of the sale of tickets, while the tracks will.”

Based on lottery retailers’ 5% commission for tickets they sell, Los Alamitos and Hollywood Park have received about $55,000 for their sales during the first four months of the lottery.

The racing commission has taken no position on the sale of lottery tickets by state-licensed tracks. At a racing commission meeting late last year, Marje Everett, chief executive officer at Hollywood Park and Los Alamitos, said: “The lottery is now a reality and we thought of using it as a marketing tool.”

Michalko said Wednesday that he hoped other tracks would reconsider selling lottery tickets.

“As demonstrated by Los Alamitos and Hollywood Park, the lottery and race tracks can coexist,” Michalko said. “I would like to see other tracks accept that, including our friends at Santa Anita.”

Michalko said that he would like to see a lottery game whose winners are determined by results of horse races run at California tracks. But lottery legislation prevents the lottery commission from introducing such a game.

Eyrich told the harness track operators that surveys have indicated that the seasonal attendance of almost 3 million at Santa Anita in recent years has come from a group of 300,000 fans.

“That’s a small group, which is why racing needs to develop new fans,” Eyrich said.

Later, Michalko said: “Our market penetration in the beginning was about 70% of all adults in the state. Now our studies show that about 80% are participating in the lottery. So we have a different core group than the tracks do.”

Michalko began his speech by saying he felt as though he were “Daniel in the lion’s den.” He explained to the audience that the lottery is required to pay 34% of its proceeds toward public education.

“This differs substantially from the mandates of the race tracks and the gambling casinos,” Michalko said.