A video gambling bill many insiders see as crucial to the survival of Hollywood Park racetrack has stalled in the state Legislature and could be dead.
The development increases the likelihood that the 237-acre Inglewood site will be sold, razed and turned into a mixed-use development, along with the adjacent Great Western Forum, which went on the block in January.
The bill's likely demise is another setback in what appears to be the last-ditch efforts to keep the track open. An initiative that would have legalized slot machines at the racetracks and provided Hollywood Park with crucial added revenue was soundly defeated 18 months ago.
Inglewood mayor Roosevelt Dorn thinks time may be running out for the track and that development wouldn't be such a bad idea.
"My position has been the land is too valuable to leave it as is if the racetrack isn't producing as it should produce," he said. Even if the track does turn itself around, Dorn said some development on the property is still a good idea.
Nonetheless, Roosevelt said he "whole-heartedly" supports the bill. "The fact is that if that were to pass it would be a great boon for the race track and the city."
Feeling the squeeze
Heading the effort to keep the track open is Rick Baedeker, senior vice president of governmental affairs for Bay Meadows Racing, a division of the Bay Meadows Land Company. The firm, which specializes in commercial, residential and mixed-use developments, purchased Hollywood Park in 2005 and at that time committed to keep racing there until 2008.
"I grew up here and had the thrill of working at this track with all of the great people who put on the show each day," said Baedeker, who was president of Hollywood Park from 1999 through 2005. "And I, like so many, love the game. I'd hate to see it close. I take it personally."
Baedeker said his company could extend its commitment to horseracing at the track, but admitted that the writing may be on the wall without the new revenue the video gambling bill would provide. Declining interest in the sport and the onset of new online gaming options for bettors has put an extra squeeze on the track, which has struggled financially for years and suffered by comparison with Arcadia's Santa Anita Race Track.
Assembly Bill 2409, proposed by San Francisco's Leland Yee, would permit pari-mutuel machine wagering on the results of archived horse races from years past. Bettors wouldn't know the horse, the track, or most of the past performance information they were wagering on. Baedeker said that the proposed 1,850 video gambling machines could generate $300 million for the seven tracks on the bill. That estimate is based on machines making $100 a day, although experts say they can make up to $300 a day. The legislation would earmark 30 percent of that money to boost track purses, in an effort to get top horses, trainers and jockeys back to California.
The tracks in line to receive them are Los Angeles County Fairplex, Santa Anita, Hollywood Park, Los Alamitos and Del Mar. Two Northern California tracks, likely Golden Gate Fields and Bay Meadows, would also be eligible.
Santa Anita Park, owned by Magna Entertainment Corp, is better off when compared with Hollywood Park. Located at the base of the San Gabriel Mountains in suburban Arcadia, it is considered one of the nation's top tracks.
But Santa Anita hasn't been immune to the national drop-off in track attendance and is looking to increase its income, too. Caruso Affiliated, the Los Angeles real estate development company that built the Grove, is developing the Shops at Santa Anita. The proposed high-end outdoor mall will include shops, restaurants and movie theaters. Still, Magna is lobbying for the bill alongside Bay Meadows.
"If the revenue is good for the racetrack, the city would benefit from any potential revenue," said Arcadia City Manager Bill Kelly, who said the city is "neutral to positive" on the bill.
Scott Daruty, chief U.S. counsel for Magna Entertainment, said the bill is important to keep the industry competitive and reach out to the instant gratification generation.
"There are traditionalists in our industry who love the fact that there are 30 minutes between the races," he said. "In today's society, there's a pace of life where people don't want to wait 30 minutes to see if they won or lost. This is a new tech-savvy way to appeal to those who want a faster pace."
Steep hill for bill
The urgency with which the track's backers view the situation is made clear from their decision to press the bill so soon after the initiative loss. "We did polling and found out we aren't going to get slots at the track any time soon," Baedeker said. "Voters just don't have the appetite for it."
The instant racing proposal has met with similar opposition primarily from the Indian tribe that currently has the exclusive rights to administer slot machines in California. The bill was pulled from the calendar before its first hearing last week.
"It was a steep hill to begin with and it just got steeper, but we have no choice but to remain optimistic and keep fighting for help," Baedeker said. The measure is now in the rules committee and is slated for an August hearing.
The tracks call the video gambling machines "Instant Racing." The California Tribal Business Alliance, which is strongly opposing the measure with its considerable muscle, says the machines would be nothing more than slot machines, albeit high tech and horseracing-themed. Still, the bettor must pick a pony not just pull a lever to play the game. And bettors wager against other players, not the house.
Baedeker insists that there is enough handicapping skill required to make it more than a game of chance. And he said every fan has a different method for handicapping anyway.
"If there are 10,000 people at the track, there are 10,000 methods of handicapping, including some people who bet the gray horse or their mother's birthday," he said.
Of course, that's not the way opponents see it.
"The slot machine has a random number generator," said Alison Harvey, executive director of the California Tribal Business Alliance. "They've substituted the outcome of the historic race for the random number generator. They're calling it a [pari-mutuel] machine, when you don't have to be too engaged with what's going on."
Backers of the reservation casinos launched a $30 million effort that helped defeat Proposition 68 in 2004, which proposed slot machines at tracks and card clubs. The measure received just 16 percent approval when it was sent to the voters.
Harvey said that what racetracks really want is to become casinos and they "should have to go through what the tribes did" back in 1998, referring to an amendment to the state constitution.
"I think it would be fair to say the tribes don't want more competition," she said. "They're sticking to the land they have, which isn't very well situated from a competitive perspective relative to the location of racetracks, which are in cities."
Magazine publisher Larry Flynt, who owns Hustler Casino in Gardena, who backed Proposition 68 in 2004 and would like to have the ability to feature slot machines, has his own take on the tribal scrutiny.
"The Indians have wanted it both ways for years," he said. "For that reason they've denied the private casinos in the state the ability to have Vegas-style gaming and I would expect they would oppose anything that would present a threat to their monopoly."
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