California’s Horseracing Industry Embraces Online Poker Bill AB 2863

Horseracing trackAfter long skirmishing with California’s tribal gambling interests, the horseracing industry seems to have finally found an online poker bill that it can stomach. On Friday, several racetracks issued a letter of support for Adam Gray’s online poker bill AB 2863, and emphasized four key points which they demand be adopted in order to make a deal.

The letter describes how Golden State tracks are at a disadvantage compared to states where operators are allowed to offer alternative forms of gaming. New York tracks, for example, received $238 million from state casinos last year to help promote growth in the industry. “This financial imbalance with other racing states continues to threaten the viability of horseracing in California, tens of thousands of jobs and billions of dollars in agricultural investment,” read the letter.

But as much as horseracing has been eager to operate online poker sites, tribal casinos have worked to block them at every turn. The tribes believe that they alone have the exclusive right to offer table games and poker in the state, and that the tracks should be precluded from doing the same. On the other hand, horseracing is the only industry permitted to offer online wagering in California, and sees no reason why it should be left out.

But in February, AB 2863 was introduced, and offered the tracks an attractive $60 million yearly subsidy in exchange for excluding themselves from the iPoker industry.

Four key points

In their letter, the tracks issued four main points on which their support of the bill rests.

They believe that the massive subsidy would be fair compensation for their agreement to stay out of the industry, while at the same time losing market share on advanced deposit wagering (ADW) opportunities. “We are not prepared to negotiate on this baseline number,” they said.

The second point deals with the fees which will be charged to operators. This issue is very important to the tracks, who say that the cash must be taken from licensing fees and taxes, and that they should have a say on how much is charged. They also want the bill to be amended to confirm that if the $60 million figure isn’t paid off completely in a year, the remaining balance will be carried over to the following year.

Third, the tracks want to be sure that the funds are spent in a way that will help grow the industry as a whole. They want the money to be spent only on purses, owner and breeder incentive awards, and racing associations or fares offering live horseracing in the state. Furthermore, they want to cut off any organization that ceases to offer racing.

Lastly, the letter states the horseracing industry’s interest in daily fantasy sports (DFS) and sports betting legislation. The tracks explained that they would like to have a say in those industries, but that they will save their comments for a later date to not muddy the waters with AB 2863.

In January, a DFS bill introduced by Assemblyman Gray advanced out of committee. On Wednesday, California’s Assembly Governmental Organization Committee will hold a hearing on the bill at 1:30 PM PDT at the state capitol.