California Tracks Will Take Las Vegas Out of Bookmaking Business, if Price Is Right

In a never-ending quest to maximize its gambling product, the California pari-mutuel racing industry has turned its eyes on the biggest prize of all--Las Vegas.

The state’s race tracks already sell their race television signals to dozens of Nevada racebooks. Southern California’s biggest tracks--Santa Anita, Hollywood Park and Del Mar--end up with about $15,000 a day in commissions based on approximately $550,000 in racebook handle. The figures for Northern California thoroughbred tracks are about half those amounts.

However, track officials say that such sums could be penny-ante compared to the possibilities of a direct link between the betting pools of the California inter-track system and the Nevada racebooks and casinos.

“It’s only a guesstimate,” said Don Robbins, Hollywood Park executive vice president and general manager, “but with the limits off bets and odds, I’d say the handle at the books might increase by 20% to 40%.”

Presently, the racebooks set their own ceilings on both bets and payoffs, whereas bettors at the track or at satellite facilities in California can bet as much as they want and receive the full payoffs, no matter how big they are.

In Nevada, the payoffs come out of the racebook’s pockets, so they currently must try to hold down potential losses by setting limits on how much can be bet and on what odds they will pay. Robbins pointed out the obvious advantage for a racebook to be part of a larger pari-mutuel pool.

“Once you go into the pari-mutuel system, it becomes a matter of complete indifference which horse wins,” Robbins said. “All they care about is the same thing we care about--how much money is wagered.”

Robbins added, however, that the racebooks must be willing to pay for the privilege of joining the California pools. The Nevada Gaming Control Board recently adopted a regulation placing a 3% limit on what racebooks can pay the supplier of a signal. The race track operators, who must pay state taxes and split their share with horsemen, say the figure is far too low.

“We’ve been in discussions for the last three or four months,” Robbins said. “But when it became apparent that the 3% limit was going to be adopted, we sort of lost our enthusiasm for pushing it along.

“Right now, we’re receiving between 2 1/2% and 2 3/4%,” Robbins went on. “And they’ve given us this crumb. I think it should be worth a substantial amount to them to be out of the bookmaking business.”

Not surprisingly, Cliff Goodrich, Santa Anita’s president and chief operating officer, concurs.

“The key now is the rate they are willing to pay us,” Goodrich said. “As racebooks, their gross hold averages about 14% after payouts. Looking at the takeout in California, we know they are going to hold between 18% and 18 1/2% by going pari-mutuel. So, we have taken the risk away from them, they are holding 4% to 4 1/2% more money, and giving us a quarter to a half of a percent more. To Santa Anita, that doesn’t seem too fair.”

Joe Harper, executive vice president and general manager of Del Mar, made it unanimous.

“Until that 3% changes, there is no incentive,” Harper said. “We’ll just keep doing business as usual.”

On the other side, the casinos and racebooks have divided along big fish-little fish lines. The big fish--casinos such as Caesars Palace, Bally’s and the Hilton--formed the Nevada Pari-Mutuel Commission to handle their interests in the negotiations. The organization represents 14 racebooks that handle more than 90% of the action on California races, according to Dennis Amerine, commission president.

“Some of the smaller racebooks are very much concerned that it will cost them more to operate under this scenario (as part of the pari-mutuel system), rather than just being bookmakers,” Amerine said.

Smaller racebooks are balking at the communications costs involved with a pari-mutuel hookup--a minimum of $58,000 a month.

At the same time, the Nevada group can cut separate deals with the various California tracks, which in turn must be careful to avoid the appearance of collusion. Amerine hopes to have at least one track, probably Bay Meadows, signed up for a test run sometime before the end of summer.

The pari-mutuel link with Nevada became possible when legislation was passed last year permitting California tracks to mingle their pools with “sister” tracks located outside the state. Santa Anita, which had an ownership interest in Canterbury Downs near Minneapolis, began sending its simulcast signal to Minnesota right away. Ladbroke Racing’s Golden Gate Fields did the same with Wyoming Downs, also owned by Ladbroke.

The law has been interpreted to enable the Nevada pari-mutuel link as well.