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New bet-from-home law could impact Albany

By Hank Sims Daily Planet staff
Thursday January 03, 2002

The owners of Golden Gate Fields in Albany stand to make large profits off a new state law that will permit them to take bets over the telephone and the Internet. 

But while “home betting” may be a boon for the declining horse racing industry, local jurisdictions like Albany, which depends on the race track for a good portion of its revenue, may suffer. 

Assembly Bill 471, which went into effect on Jan. 1, allows Californians to place bets on horse races from their homes – a previously illegal practice. 

It will also allow companies like Magna Entertainment, owners of Golden Gate Fields, to set up “advance deposit wagering” systems, in which customers set up an account using a check or credit card, then use that account to bet from their homes. 

Twelve other states already allow home betting on horse races. 

The law also sets new, statewide standards for labor relations between race track operators and workers who care for the horses.  

John Reagan, senior managing auditor for the California Horse Racing Board, said that so far, two companies have applied to operate home wagering systems – Magna and the Los Angeles-based 

Magna also owns “Call-a-Bet,” a home-betting system in Pennsylvania.  

Jim Ghidella, Northern California representative for the Thoroughbred Owners of California, said on Wednesday that the ultimate goal of the legislation was to attract new customers to the industry. 

“Hopefully, this will recruit new fans,” he said, adding that internet betting could help the sport spread into Europe and Asia. 

Attendance has been dropping at race tracks statewide since off-track betting was introduced in 1984. In 1997, attendance at the 10 permanent tracks in the state was 8.5 million. Three years later, it was down to 7.5 million. 

Over the same period, the percentage of total wagers placed at the track as opposed to off-track sites has remained constant – about 22 percent of the total. 

For the city of Albany, that amounts to a decline in the amount of money it can collect from racing operations. The city can only tax wagers placed at the track. 

Beth Pollard, Albany city administrator, said that the city didn’t know yet what impact home gambling would have on its tax base.  

“At this point, we’re taking a concerned look, and waiting to see what the eventual impact will be,” she said. 

Albany receives about $500,000 annually, or 5 percent of its budget, from taxes on bets placed at the track. 

According to Ghidella, though, the idea behind the legislation was not to help race tracks evade local taxes. He said that race track operators get a bigger cut from on-site bets than from those placed at an off-track shop or from home. 

“You definitely don’t want to take bettors away from the track,” he said. 

Golden Gate Fields management did not return calls on Wednesday.