Is Off-Track Wagering Big? You Bet! : Gambling: In Southern California, it has taken off like a horse out of the gate, providing a welcome boost to the horse-racing industry.

Barry Davis tapped his pen nervously on the open page of the racing program. The point of the pen kept hitting the name Fire Back, a 3-year-old with 7-2 odds.

Trouble was, he had already plopped down a few bucks on Ama Sharif for the second race at Del Mar, and he just wasn’t sure he had put his money on the right pony.

“Common sense says I should put five bucks on Fire Back,” Davis growled almost inaudibly. “But I don’t know.” He should have. Fire Back won handily. As he left to return to his job at the Riverside Cement Co., he proffered a little racetrack philosophy: “I’ve had my good days, and I’ve had my bad.”

Davis was one of about 2,000 horse-racing fans from the Inland Empire to watch the thoroughbreds running in Del Mar, about 120 miles away in San Diego County, on a bank of wide-screen television sets at the San Bernardino National Orange Show fairgrounds.

Off-track wagering, which became legal in Southern California nearly four years ago, has taken off like a horse out of the gate, providing a welcome financial boost to the horse-racing industry. (Off-track wagering has been legal in Northern California since 1985.)

“They figured we’d (draw) 700 people a day, tops,” said Bradley Randall, manager of the San Bernardino satellite wagering facility. “But we opened up with 1,700 people and never looked back.”

Today, daily attendance can reach 2,500, Randall said.

The success story of off-track wagering is written in the ledgers of Southern California Off-Track Wagering Inc., better known in the industry as “Scotwinc”, a quasi-government organization in Los Alamitos formed in 1988 to control, monitor and operate satellite wagering facilities in the Southland.

There are year-round facilities scattered across the Southland, at nine fairgrounds and two Indian reservations. In addition, satellite wagering is offered part time at the Santa Anita, Hollywood Park, Del Mar and Pomona racetracks.

The idea behind Scotwinc in particular and off-track betting in general is simple: make wagering on horses as convenient as going to the drugstore for those who would otherwise shun long drives to one of the Southland’s five racetracks.

“There are people from all over the state who are interested in horse racing,” said Alvin A. Karwacki, Scotwinc general manager. Karwacki, a veteran racetrack administrator, moved from the East Coast in 1988 to help get Scotwinc off and running.

Indeed, the satellite wagering network allows bettors from such faraway places as Ventura, Victorville, Bakersfield and Santa Maria to play the ponies without leaving the area, Karwacki said.

Scotwinc, a nonprofit organization, was essentially legislated into existence. The state considered it necessary to have an organization that included representatives of government and racetrack and horse owners as a way to police the industry, Karwacki said.

Former Gov. George Deukmejian signed legislation in September, 1987, allowing the Southern California fairgrounds that did not have racing to have satellite wagering. Wagering at the reservations was approved a year later.

The bill, introduced by state Sen. Ken Maddy (R-Fresno), called for an organization to provide audiovisual signals, to maintain the security of those signals and to ensure the integrity of the parimutuel pool.

And to ensure that all got their fair shares of the “handle” (a racing-industry term for the total wagers made), Scotwinc is governed by a 12-member board of directors, Karwacki said.

The board meets every other month. Its members are from horse owners associations, racetracks, county fairgrounds, the state Horse Racing Board and the California Assn. of Racing Fairs, based in Sacramento.

As a result, the various--sometimes conflicting--interests ensure that the organization is run as evenhandedly as possible, Karwacki said.

The Los Alamitos Race Course was chosen as its headquarters because the track has its own races at night, which allows Scotwinc employees to operate daytime satellite wagering while the track is closed.

The track also had ample room for the bulky banks of computer and television systems necessary to run a regional wagering operation.

And off-track wagering has taken off at a gallop, Karwacki said.

In 1990, more than 3.3 million customers made bets at satellite facilities throughout Southern California, Karwacki said. That tops the attendance during the first year of operation by a million.

Patrons placed about $647.9 million in bets last year, and Scotwinc collected in excess of $19 million after winnings were disbursed, Karwacki said. After meeting expenses, the organization had $4.1 million left in its coffers. Of that, half went to a number of horse owners’ associations, and the rest was divvied up as profit among Santa Ana, Hollywood Park, Del Mar, Pomona and Los Alamitos racetracks.

“One of the objectives was to increase the purses so the horsemen can breed better horses,” Karwacki said.

Funds from off-track wagering are also divvied among state and local governments, and UC Davis, which takes a small cut to underwrite equine research.

“Everybody benefits from off-track wagering,” Karwacki said. “It’s the best system in the country.”

At the time the bill was passed, the only vocal opposition came from state Sen. Jim Ellis (R-San Diego), who complained that the bill would encourage an unnecessary expansion of gambling in Southern California.

There is no question that legalization has expanded gambling, but with it, proponents say, came several benefits.

John Regan, a spokesman for the state Horse Racing Board, said that although off-track betting has not produced a financial windfall for California, it has provided a welcome cash infusion during hard times.

The state does not keep separate earnings figures for off-track versus on-track betting, Regan said. But, he said, the overall figures show a healthy increase in state revenue from the new industry.

For instance, the state’s cut in 1990 was $149.9 million, $9 million more than its share of wagers in 1984, the year before any off-track wagering was allowed, Regan said.

“There’s been a definite state increase (in funds) over the years because of OTW,” Regan said. “It’s working quite well for us.”

Scotwinc has two responsibilities: to provide and control satellite signals from the racetrack to the off-track sites and to provide the parimutuel services at the off-track locations.

The company leases a satellite dish that sits on a mobile trailer that is moved from racetrack to racetrack over the course of a year.

The same picture shown on closed-circuit TV at the racetrack ais fed into equipment in the mobile trailer, and a scrambled version is beamed up to Space Net 1, a satellite that hovers 23,000 miles above the Equator. The scrambled signal is then beamed back to the various off-track sites in Southern California. Scotwinc then provides those sites with unscramblers, betting machines and employees to handle the money.

Once a bet is made, the betting machine zips that information to Scotwinc’s Los Alamitos computer room. The computer adds that bet to the hundreds of others being made at off-track sites across the Southland, then instantly transmits the information back to the racetrack for odds computation with the on-track bets.

The off-track bettor sees no delay in the wagering process.

“It’s just like you’re there,” said Karwacki. “You can bet the horses while they are already in the gate.”

Frank Glansdorf, a San Bernardino printer who was spending some time at the National Orange Show facility, said he only makes the trip to a racetrack now as a “special occasion.” The off-track site is only five minutes from his house.

Taking a trip to Del Mar, for instance, is a grueling endeavor.

“It’s like going to Las Vegas,” he said. “Afterwards, you’re broke; you’re tired. Then you gotta come back home. It’s depressing.”

Off-Track Betting Where The Money Goes Out of every $1 bet, 84.7 cents goes to pay winning bettors, and the remaining 15.3 cents goes to a variety of services, organizations and taxes. In cents Purse money: 2.625 Horse owners associations: 2.625 Equine research at UC Davis: 0.1 Local governments: 0.3 Breeders: 0.4 Promotion of satellite wagering: 1.0 Stabling and vanning funds: 1.25 Satellite OTB facility: 2.0 State of California: 2.5 Southern California Off-Track Wagering Inc.: 2.5 Source: Southern California Off-Track Wagering Inc.