01/22/2002 12:00AM

California phone bet: Tangled web

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Autotote will not get a telephone-wagering license from the California Horse Racing Board because racetracks in the state have refused to sign agreements with the company, Autotote's top executive said Tuesday.

CHRB regulations require prospective phone-betting companies to have contractual arrangements with California tracks before the company can take bets. Autotote's president, Brooks Pierce, said on Tuesday that the tracks had so far declined to negotiate with the company, which is a tote supplier and has a phone-betting operation in Connecticut.

"We're not going to be accepted because none of the host tracks want to make a deal with us," Pierce said. "They don't want us to take account-holders away from them."

Autotote's predicament has raised concerns among some racing officials that the market will be unfairly dominated by two companies - Magna Entertainment and Television Games Network - that own or have close ties to California racetracks. As illustrated by the Autotote case, tracks can shut out unwanted competitors by refusing to give them the rights to merge bets into their commingled pools, a requirement under regulations approved Friday.

That concern is just one of many arising as the CHRB prepares to meet on Thursday in Monrovia, Calif. At the meeting, the CHRB is expected to hear heated discussion about telephone and Internet wagering from racetrack executives, horsemen's representatives, and regulators. At this point, few believe the CHRB will approve any licenses because of the multitude of complicated issues that have yet to be resolved.

"It's going to be absolute bedlam," said one racetrack executive who spoke on the condition of anonymity. "And I don't think anything is going to get done."

If the process is delayed, then the CHRB could take up the matter at its next scheduled board meeting on Feb. 21. The board could also call a special meeting with 10 days' advance notice, according to CHRB spokesman Mike Marten.

Already, horsemen's officials have said they will ask the CHRB to postpone any approval of phone-betting operations until their organizations can reach separate agreements with the prospective operators. The Thoroughbred Owners of California has been negotiating with several companies over the past five days, but no deals had been reached as of Tuesday afternoon, officials said.

"It's hard to know what happens in the next 48 hours or so, but I think it's very clear that the board should take its time with this," said John Van de Kamp on Tuesday. The president of the TOC, Van de Kamp declined to provide details about the ongoing negotiations.

John Harris, a CHRB board member, said Tuesday that the board will be reluctant to license any company that does not come to the meeting with agreements with the tracks and horsemen.

"The board will be very cautious about approving anyone unless everything is complete," said Harris.

Some racetrack and account-wagering executives are expected to argue at the meeting, however, that the regulations do not require companies to have separate agreements with horsemen's groups. Those officials have said that the horsemen's approvals are already contained in simulcasting agreements, which allow tracks to sends their signals to out-of-state betting sites.

"The [racetracks] are the ones that negotiate the contracts to send the signal out of state," said Rick Baedeker, the president of Hollywood Park. "In no instance does the TOC have a direct relationship with the sites that receive the signal."

The Autotote situation - which Harris called "one of many legal questions" he was considering before the meeting - illustrates the complexity of the issues facing the CHRB board on Thursday.

Including Autotote, all four companies that submitted license applications are closely linked to California racetracks. In some cases, the companies are also linked to each other, through a web of contracts and business relationships.

Magna Entertainment, which submitted an application on behalf of its new XpressBet website, owns Santa Anita Park, Bay Meadows Race Course, and Golden Gate Park in California. Autotote is the tote supplier for those tracks and will also process the wagers through Magna's new online service, Pierce said.

Television Games Network, the horse racing broadcast and wagering channel, has exclusive contracts to broadcast races from Hollywood Park, Del Mar Thoroughbred Club, Oak Tree at Santa Anita, and Los Alamitos. Those tracks are also served by Autotote.

Asked about Autotote's intention to be licensed to operate telephone-betting on its own, Baedeker said Hollywood Park and other TVG tracks in California were prohibited from signing agreements with Autotote and any other companies because of the TVG contracts, making Autotote's application dead on arrival.

A fourth applicant, the struggling Youbet.com, sends some of its account-holders' wagers through Magna's harness track in Pennsylvania, The Meadows, another Autotote client. Youbet also has a separate contract with TVG allowing it to take wagers on TVG exclusive signals.

Because of those business relationships, Pierce would not criticize the tracks for failing to negotiate with his company.

"We're disappointed, of course, but we have a vested interest in their success," Pierce said. "We don't necessarily see them as being protective or anti-competitive."