California Horse Tracks Support CA Prop 26 For In-Person Betting

Written By Derek Helling on September 27, 2022
horse tracks california sports betting vote

As far as California sports betting ballot measures go this fall, Prop 27 has picked up another opponent while Prop 26 has secured an ally in the state. The industry now firmly in opposition to Prop 27’s passage and supporting the ratification of Prop 26 is one and the same on both counts.

Horse racing tracks in California have endorsed this voting strategy. While they clearly stand to benefit from the passage of Prop 26, that benefit could be negligible. Moreover, their reasons to oppose Prop 27 aren’t as clear.

Tracks chime in on California sports betting debate

In an interview with USA Today, 1/ST Racing COO Aidan Butler gave the company’s position on the benefits of Prop 26. That division of the Stronach Group operates both Golden Gate Fields and Santa Anita Park in California.

“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,” Butler said. “I’m sure of it.”

Prop 26 would allow horse tracks in California to offer in-person wagering on sporting events. There are no provisions for online betting in the ballot measure. That appears to suit stakeholders in California horse racing just fine.

Monarch Content Management President Scott Daruty called the potential passage of Prop 26 a positive for the horse racing industry in the state while labeling the passage of Prop 27 a “very bad” premise for the same. Daruty did not elaborate on why Prop 27’s approval would be such a negative, however. Monarch Content Management provides simulcast services for the same tracks 1/ST Racing operates.

Despite Butler’s confidence, the potential impact of Prop 26’s passage on horse tracks in California might not be so massive.

Would sports betting really rejuvenize horse tracks in California?

There’s certainly no debate that the renovations necessary to offer retail sports betting at tracks like Golden Gate Fields could result in a temporary boost. Something flashy and new at tracks nearly always brings some hype with it.

The real question is how much of an impact a retail sportsbook could have on tracks in a year’s time and further out after the newness has worn off. As Andrew Champagne of PlayCA rightfully considers, the long-term revenue forecast is actually small.

Champagne points out that people who bet on horse races and sporting events aren’t necessarily one and the same. To get the kind of impact Butler wants from in-person wagering on sports, the retail books would have to drive a lot of new visitors through their doors. It’s unclear whether offering retail betting will do that.

What’s more likely is that if Prop 26 passes but Prop 27 does not, as the horse racing industry wishes, most sports bettors in California will continue to use offshore websites to do their wagering as opposed to making trips to the tracks. That points somewhat to a possible motivation for the opposition to Prop 27.

Are cannibalization fears behind Prop 27 hostility?

In theory, it’s possible that voters could approve both Prop 26 and Prop 27. Should that become the case, horse tracks could open their retail sportsbooks while legal online sportsbooks in the state also take bets.

The horse racing industry might be worried that should Prop 27 pass, that would give sports bettors no reason to visit the retail sportsbooks at their tracks. It’s unclear how many Californians would opt to do their wagering at a legal physical sportsbook versus an offshore online sportsbook simply to stay in compliance with state law.

That might not be the reason behind resisting Prop 27, though. Another possible motivation is maintaining an alliance with the tribal casinos in California that also oppose Prop 27. Current polling suggests voters won’t approve either Prop 26 or Prop 27 in November, though, so the tracks’ stance on the ballot measures might prove irrelevant soon.

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Derek Helling

Derek Helling is a lead writer for PlayUSA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

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