September 21, 2001

POMONA, CA – The California Horse Racing Board approved 15 proposed regulations for public notice Friday, setting the stage for account wagering to be in place in January after the proposed regulations pass through the administrative channels.

The seven racing commissioners also voted unanimously to elect Commissioner Alan Landsburg chairman and Commissioner Roger Licht vice chairman of the CHRB. Landsburg fills the post being vacated by Chairman Robert Tourtelot, who is completing nearly eight years of service on the Board.

During an eventful meeting, a bare majority of the Board approved a 2002 racing calendar for Northern California that restores six racing days to Bay Meadows. The Board voted unanimously to restore one day to the Solano County Fair.

And following presentations by jockey Chris McCarron and Dr. L. Wayne Gertmenian, who is the current president of the Jockeys’ Guild, the Board approved a transfer of $680,180 from the uncashed pari-mutuel tickets fund to a trust account providing medical, vision, and dental benefits to nearly 150 active and retired California jockeys and their families.

Chairman Tourtelot began the meeting by requesting a “moment of silence for those taken during the tragic events of September 11.”

The commissioners and staff have been working diligently with the industry and the public over the last month developing 30 pages of regulations covering all aspects of advance deposit wagering, which is authorized by a new law (AB 471) that takes effect January 1.

Licht, who chairs the CHRB Pari-Mutuel Operations Committee, spent countless hours communicating with the public, industry representatives, and the staff in helping to develop the proposed regulations. With CHRB senior management auditor John Reagan leading the team of staff members on this project, they began by obtaining and reviewing regulations from other states that already have such programs in place, then they painstakingly developed the proposed regulations for the California program.

 The Pari-Mutuel Operations Committee conducted a public meeting Thursday focusing solely on account wagering. During several hours of discussion, Licht and the other two Committee members – Commissioners William Bianco and Landsburg – revised the language of some of the proposed regulations based on suggestions from the public and the industry.

Rodney Blonien, a Sacramento lobbyist familiar with the regulatory process, commended the staff for “doing such a first-rate job developing excellent regulations so quickly.”

Licht publicly thanked the staff for “doing such a great job in a short period of time.” He said he feels “very comfortable with the proposed regulations, considering that they’ve already been reviewed by all segments of the industry” and by some members of the public, and their input has been incorporated into the proposed regulations.

“I am confident that the industry as a whole and particularly the horsemen will benefit immensely from account wagering in California,” said Licht.

The proposed regulations include the following key elements:

·        Advance Deposit Wagering (ADW) means a form of pari-mutuel wagering in which an account holder residing within or outside California establishes an account and then authorizes a Board-approved licensee, betting system, California hub, or out-of-state hub, by telephone or other electronic media, to place wagers on the account holder’s behalf.

·        In order to operate an ADW system, applicants must post a $500,000 bond or other financial security, which protects the betting pools and customers, and provide financial information demonstrating their financial resources to operate such a system; establish security access policies and safeguards; protect the confidentiality of account information; ensure that persons under 18 and other people prohibited from wagering at racetracks cannot open accounts; and include in their promotional literature contact information for a recognized problem-gambling support organization.

·        All wagering transactions shall be recorded and retained for 180 days.

·        The ADW wagers will be included in the respective pools at each racetrack.

·        There will be no surcharge for any wager. The payoff for an account wager will be the same as an on-track mutuel (although the law does allow for transactional fees).

·        Deposits can be made in cash or by credit card, check, electronic fund transfer, or other traditional means of deposit or payment. However, in their own best interests, applicants may instruct the operator not to accept deposits by credit card.

“Basically, we are protecting people from themselves by allowing them to opt out of credit card deposits,” said Landsburg. “We also are limiting them to wager only with the funds that already are in the account and just one additional deposit or refill per racing day. There will be a 24-hour cooling-off period before they can wager with additional deposits or change their option not to use credit cards.”

The proposed regulations do not address such matters as the number and location of races on which account holders may place wagers; whether individual racetracks will accept wagers from a single account wagering system or multiple systems; whether those systems will charge fees for each wagering transaction; or how the simulcasts of the races will be delivered to homes.

Jack Liebau, an executive with Magna Entertainment, which operates Santa Anita Park, Golden Gate Fields, and Bay Meadows, anticipates these matters being part of the contractual agreements between racetracks and the system operators.

Following the 45-day public notice period, the proposed regulations will come before the full Board for a public hearing on November 30 at the University of California at Davis. The entire regulatory approval process should then be completed in January when the new law takes effect.

This was the last meeting for Tourtelot, who was first appointed to the Board in 1993, then reappointed in 1997. His fellow commissioners, CHRB Executive Director Roy Wood, and representatives of labor and the horse-racing industry took the opportunity to express their appreciation for his years of service. Their heartfelt remarks prompted an emotional response from Tourtelot.

 “I couldn’t leave without expressing my appreciation to the staff of the California Horse Racing Board,” he began. “The people behind the scenes are the ones who make the rest of us look good. And heading the list is Roy Wood, who is absolutely the number one executive director in horse racing.

“I’ve met some incredible people in racing throughout the United States, especially here in California. I’m sorry to be leaving, but I’m not going to be gone from racing. I’ll still be around.”

With Commissioner John Harris making the nominations, the seven commissioners voted unanimously to name Landsburg chairman and Licht vice chairman.

Landsburg, who was a founding director of the Thoroughbred Owners of California and has owned and bred thoroughbreds since 1976, was appointed to the Board last November 22 by Governor Gray Davis. Prior to his appointment, he served on CHRB advisory committees. Landsburg wrote, produced, and directed the award-winning “Biography” television series, and founded his own production company in 1970. He shared his technical expertise with the Board in 1996 by helping to develop a CHRB video entitled “Protecting Racing’s Integrity.”

Licht, a Los Angeles attorney, was appointed by Governor Davis to the Board on March 8 of this year. Until that time, he was representing jockeys, trainers, and other licensees in disputes with the CHRB. A thoroughbred owner since 1995, Licht spends a great deal of time at racetracks and is familiar to jockey agents, trainers, other horse owners, turf writers, radio show hosts, racetrack executives, and fans.

In August the Board approved a majority of the 2002 racing calendar, including a portion of the Northern California calendar through March 31, but delayed action on the balance of the northern calendar in order to receive more input on the Racing Dates Committee proposal for the thoroughbred and fair meets.

The two members of the Racing Dates Committee – Tourtelot and Harris – conducted another in a long series of public meetings Thursday, then presented a proposed calendar to the Board on Friday that was unchanged from the August proposal except for the recommendation to reinstate one day of racing (Monday, July 15) at the Solano County Fair, which the Board unanimously approved.

As part of their proposal, Tourtelot and Harris recommended reducing the two meets at Bay Meadows by a total of six days – part of an overlap with the Northern California fairs. They felt that some adjustment of the racing dates could help increase the size of fields at the northern venues and enhance the viability of racing in the north.

“Mr. Harris and I believe that the present number of racing dates in Northern California is higher than the current horse population can sustain,” said Tourtelot.

“This has been a real agonizing time for me personally,” said Harris. “We spent a lot of time trying to come up with something that we feel balances the different needs.”

The other racing commissioners voiced their own opinions.

“I’ve looked at the statistics and I’m not convinced that the smaller field size has anything to do with the overlap (between the major meets and the fairs),” said Licht. “I’m also concerned about the potential loss of jobs attributable to cutting days at Bay Meadows.”

Commissioner Marie Moretti said, “We’ve got a solution to the wrong problem. Dates have to be considered over a long period of time. Racing is a 24/7 business with a lot of components that we need to deal with. We need to be innovative. I don’t think we should penalize a business (Bay Meadows) that is feeding and clothing horse racing in California.”

Landsburg suggested that everyone “start thinking out of the box.” He suggested experimenting with the racing schedule, perhaps by adding overlap days, not reducing them, noting that “the more programs we run, the more handle comes in, generating more money for purses and race meets.” He also challenged the California horse-racing industry to launch a “determined and sustained effort to bring in horses from other states” and keep them here.

Commissioner Sheryl Granzella said, “I believe Bay Meadows is being unfairly punished, and I can’t agree with taking away as many days as suggested. I’m also a big supporter of labor, and I don’t want to see the employees get hurt.”

Bianco said, “The economy was weak even before considering what happened last week. I would hate to see anybody losing any employment whether it’s one day or a week. I would hate to cut any dates considering the way the economy is right now.”

Bianco, Granzella, Landsburg, and Licht voted to restore the six days to Bay Meadows. Harris and Tourtelot voted against the motion. Moretti abstained.

As approved by the four-member majority, the Board adopted the balance of the Northern California calendar: Bay Meadows, April 3 through June 16 (55 days); Stockton, June 12 through June 23 (10 days); Pleasanton, June 26 through July 7 (11 days); Vallejo, July 10 through July 21 (11 days); Santa Rosa, July 24 through August 5 (12 days); San Mateo, August 7 through August 19 (12 days); Ferndale, August 8 through August 18 (10 days); Cal Expo, August 21 through September 2 (12 days); Bay Meadows, August 30 through November 11 (55 days); Fresno, October 2 through October 14 (11 days); and Golden Gate, November 14 through December 22 (29 days).

The Horse Race Law provides for the funding of a health and welfare program for California jockeys and their dependents from uncashed tickets. The Jockeys’ Guild was selected by the Board to administer this program and created a trust account for that purpose. McCarron, who is a Guild director, appeared before the Board with Gertmenian and Guild representative Darryl Haire to request a 15% increase in the allocation for the current year. Furthermore, they indicated that with inflation, a poor economy, and rising costs, they will be seeking another increase before the end of the year.

The Board approved the 15% increase, providing a total of $680,180 to the trust this year, and asked the Guild representatives to submit the proper request and documentation to support any additional request.

Expressing gratitude on behalf of all California jockeys and their dependents, Gertmenian said, “California, Delaware, and West Virginia are the only three states with this type of program. I’ve traveled around the country during my short term (as Guild president), and I’ve discovered how incredibly lucky the jockeys in California are.”

In other business, the Board approved license applications for race meets at Hollywood Park from November 7 through December 17 and Golden Gate Fields from November 7 through March 31, 2002.

The Board adopted a regulatory amendment stating that totalizator employees shall not place a wager while on duty and adopted another amendment eliminating the requirement for at least five wagering interests to finish a race in trifecta pools.

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