California’s four horse racing tracks are hopeful that if the voters approve land-based sports betting for the Golden State, they will see a much-needed revival of the ailing sport.
They are haunted by the memory of Hollywood Park Racetrack, demolished and turned into a housing project ten years ago. They are also haunted by public relations disasters such as the highly-publicized deaths of several thoroughbred horses over the last three years—and unwanted attention from animal rights groups.
Now, they are finally getting some positive news with the qualification of Proposition 26 for the November ballot. It would allow only tribes and racetracks to take retail sports betting.
Aidan Butler, chief operating officer of the Stronach Group’s 1/ST Racing, which owns Santa Anita Racetrack in Arcadia, told USA Today: “An extra revenue stream, the revitalization of the building, the upsides of increased employment and stimulating these beautiful, old venues with more energy and fun is going to have a massive impact, I’m sure of it.”
Other race tracks that would benefit from the infusion of capital include Del Mar Thoroughbred Club and Golden Gate Fields.
Thoroughbred owner Nick Cosato, who owns 76 racehorses based in Del Mar, told USA Today: “If you turn these infields into a Las Vegas-type setting with swimming pools, bottle service, TVs in the cabanas to watch football while you’re at the races … I know where I’ll be: Swim trunks on, having a party. ” He added, “The addition of this wagering could be monumental for horse racing, a major shot in the arm.”
Proposition 26 isn’t the only sports betting measure on the ballot, although it is backed by many powerful gaming tribes, and the racetracks. The tribes, whose casino industry is worth an estimated $8.41 billion, are in what they consider an existential battle against Proposition 27, a measure pushed by out-of-state operators, such as FanDuel and DraftKings, that would allow widespread online sports betting.
Although they are rival measures, both could pass if each garners more than 50 percent plus one. But the tribes and racetracks are fighting for only one, because then all sports bettors would be forced to go to their brick-and-mortar facilities.
Butler commented, “Regulating the sports wagering in a way that allows people to come out is so beneficial. Horse tracks have not had a huge growth spurt over the past few decades.” He added, “With sports wagering, you’ll draw people in before the races wanting to come hang out, having a drink, eating and bringing new energy to the old building that we have worked so hard to keep spectacular.”
Santa Anita’s plan is to build a sports book that would attract a new customer base to the racetrack. Santa Anita General Manager Nate Newby adds, “If there is a magic fix, I haven’t seen it, but we’ve learned if you’re going to be in the game, you have to be invested in it. You have to ensure your facility is top-notch and you must offer the best customer experience.”
He added,. “Those race tracks that were on the way out, that hurt us, because people would go in there and notice there hadn’t really been any improvements.”
Gaming tribal leaders are especially opposed to the out-of-state operators getting their foot in the door in California. They point to comments made by DraftKings CEO Jason Robins a few weeks ago to the National Council of Legislators from Gaming States: “We’re incredibly excited about the prospect of responsibly bringing online sports betting to the state while protecting minors and other vulnerable populations, and providing much-needed funding for critical issues like homelessness and mental health. It is creative solutions to societal problems like the aforementioned proposal that make me most excited for the possibilities in the gaming industry’s future.”
This comment prompted Jacob Mejia, spokesman for the tribal coalition that supports Proposition 26 and opposes Proposition 27, to declare, “This just confirms what tribes have long suspected: Prop 27 is not about online sports, it’s about online casinos.” He added, “The out-of-state operators won’t stop at sports wagering. Their real goal is to turn every Californian’s cell phone, tablet and laptop into a full-blown casino.”
Victor Rocha, conference chairman at the National Indian Gaming Association, added, “It’s not about sports betting. It’s about the next generation of gambling and online gaming. The tribes have exclusivity and they’re not going to give it up, and that’s that. We’ll take that one to the mat.”
Meanwhile, some sports betting operators are being urged to show more public support for Proposition 27. They note that, aside from Robins touting the benefits of online sports betting in California, the other CEOs have been quiet.
Barstool Sports, DraftKings, FanDuel, BetMGM, WynnBet, Bally’s Interactive and Fanatics spent more than $100 million to qualify the measure. But their CEOs haven’t said much about it.
Charles Gillespie, chief executive officer of Gambling.com Group, which provides digital marketing services to sportsbook operators, told CDC Gaming Reports, “I don’t understand why they’re leaving the whole thing to Jason.” He added, “California is the perfect kind of example of how complex regulation is in the United States. Politics in California is always going to be complicated.”
The opponents of Proposition 27 say the measure would only benefit “out-of-state operators” and could lead to minors having online sports betting accounts. San Manuel Band of Mission Indians Chairwoman Lynn Valbuena said in a statement that the measure, “threatens decades of progress for California’s tribal governments, erodes tribal sovereignty, and threatens our future economic sustainability.”
The operators’ victory is by no means assured, as they discovered in Florida, where DraftKings and FanDuel spent $37 million to try to put a sports betting measure before the voters. They failed.
Gillespie told CDC Gaming Reports, “The operators lost in Florida. That was big for them.” He added, “If it happens again in California, it’s terrifying about how aggressive the operators are going to be coming back because legalizing sports betting is not going away.”
Some smaller non-gaming tribes support Proposition 27 because it sets aside money for them. In an advertisement Philip Gomez, chairman of the Big Valley Band tribe said, “For too long, rural and economically disadvantaged tribes like ours have struggled to provide for our people.” He added, “This measure would provide us with economic opportunities to fortify our tribe’s future for generations to come.”
