As reported yesterday, California has the largest share of gamblers in the US but the horseracing industry is not getting the benefit. Slot machines are legal only at California’s Indian casinos and tribes lobby hard to keep it that way. In 2004 an initiative to authorise slots at tracks and some card rooms failed after only a 16% vote in favour. Over US$20 million had been spent lobbying in favour of Proposition 68, but the tribes paid out US$33 million to defeat the initiative and keep their monopoly.

In fiscal 2004-2005, revenue from betting on the horses was US$4.1 billion, a fall of US$138 million. Between 2002 and 2004, betting at tribal casinos rose 36% and the trend is not expected to alter. The racing industry now wants to introduce new video gambling machines at racetracks across the state. The bill introduced by Leland Yee (D-San Francisco), AB2409, seeks to legislate for look-alike slot machines that mimic betting on a race. The video machines would actually show old horse races with information such as the original odds, number of runners, etc. to assist players.

The bill, described as being about saving an industry, would authorise up to 1,850 machines at seven Californian tracks. 30% of the revenue generated by the instant horseracing machines would go into racing purses, creating more interest from owners, breeders, trainers and the race-going public. Most of the rest of the money would go to the racing industry employees and local communities.

The new machines, if allowed, may not technically be classed as slot machines – there is no luck involved - but in shape, flashing lights and coin activation there is little apparent difference to the player. The Indian casinos on reservation land are often not in prime locations, so competition from more centrally placed racetracks is viewed by the tribes with concern. It has been estimated that the video machines could make as much as US$300 million in annual profits for the tracks. (E-06.23.06)

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