01/25/2002 12:00AM

California phone bets bring simulcast boom


ARCADIA, Calif. - The telephone and Internet wagering systems operated by Magna and TVG that were approved by the California Horse Racing Board on Thursday will lead to a massive expansion of simulcast betting available to state residents.

Bettors at California racetracks and offtrack locations have been limited to betting on 23 out-of-state simulcasts since 1999. There is a difference of opinion about whether that number will change dramatically. But for telephone and Internet wagerers the betting opportunities will certainly mushroom.

Jack Liebau, the president of Magna's three California tracks, Bay Meadows, Golden Gate Fields and Santa Anita, said "we're limited to the same 23 imports" ontrack.

Rick Baedeker, his counterpart at Hollywood Park, said the legislation passed last year that permitted telephone wagering allows for racetracks to offer similar services. Baedeker envisions as many as 40 simulcast races being available when Hollywood Park opens in late April.

"We would probably bring in another 15 or so that a vendor was offering that we could offer our fans," he said. "The purpose is so the customer at home does not have an advantage.

"We won't open it up to everything. We're not in the volume business. We will bring in full cards and if there is a popular signal that is not currently available, we will bring it in."

Both Magna, through its XpressBet system, and TVG were busily promoting their advance deposit wagering systems to California residents on Friday. Magna was hoping to launch XpressBet in California on Saturday. TVG began accepting bets from California residents on Friday.

California bettors must open accounts with both firms to be able to bet on all of the state's races. XpressBet has agreements with the three Magna-owned tracks in California as well as Cal-Expo Harness. TVG has exclusive agreements with Del Mar, Fairplex Park, Hollywood Park, Los Alamitos, and Oak Tree at Santa Anita.

Both firms have an extensive list of out-of-state racetracks available to telephone and Internet bettors.

On Sunday, for example, XpressBet will accept wagers on its California tracks as well as Fair Grounds, Gulfstream Park, and Philadelphia Park. On other days, Australian Thoroughbred racing and harness racing from Balmoral, Cal-Expo, and The Meadows will be offered.

On Sunday, TVG will offer Thoroughbred and Quarter Horse racing from Aqueduct, Delta Downs, Fair Grounds, Laurel, Los Alamitos, Mountaineer Park, Oaklawn Park, Sam Houston, Suffolk, Turf Paradise, and Turfway Park and harness racing from Balmoral, Dover Downs, Monticello, and Saratoga.

Racing officials were reluctant to predict precisely what impact telephone wagering would have on the sport in California.

"I think it's too early to speculate," said Jim McAlpine, the president and chief executive officer of Magna. "This is not as simple as turning on a light switch."

The two services have vastly different television systems in place. TVG is available on the Dish Network and will become more widely available in the Los Angeles area later this year through digital cable. Magna has launched a television satellite service to replace The Racing Network, which folded last year. That system is available on satellite television, according to McAlpine. He said the company intends to expand the service in coming months, and is hoping to gain access to cable providers.

"It is up and running," he said. "We're doing some aggressive marketing to try to interest people to subscribe into that system."

McAlpine said the system will be free through the end of February and will have a cost structure based on customer betting levels.

"We're aggressively pursuing cable," he said.

McAlpine said telephone and Internet betting has created "a lot of curiosity. The website is going crazy."

Magna's license was approved by a vote of 5-2 despite concerns from CHRB chairman Alan Landsburg that Magna did not have satisfactory television distribution in place.

Landsburg argued that advance deposit wagering is a vital tool for promoting racing to newcomers, and that it needs a television platform to be successful.

He urged the board to table the application for a month, but was defeated when board members Sheryl Granzella, John Harris, Roger Licht, Marie Moretti, and John Sperry voted to approve the license. Landsburg and Bill Bianco opposed it.

Magna reached an agreement on the division of telephone betting revenue with the Thoroughbred Owners of California on Thursday, moments before the CHRB meeting.

In many cases, bets placed through Magna's XpressBet telephone and Internet system will generate the same funds for horsemen as ontrack bets, TOC president John Van de Kamp said. Horsemen will receive 5.9 percent of every betting dollar from California account holders betting on California races, an amount equivalent to an ontrack bet. If California account holders bet on out-of-state races, 5.4 percent will go to purses.

The TOC does not have an agreement in place with TVG for the Hollywood Park meeting. Van de Kamp said negotiations are underway for that meeting as well as for Del Mar, Fairplex Park, and Oak Tree.

Van de Kamp was also reluctant to predict exactly what impact telephone wagering could have on the sport. "No one knows," he said. "It depends on handle."

Youbet shares drop

Shares in Youbet.com, the online horse-racing wagering company, dropped 13 percent on Friday after that company's request for a telephone-wagering license application was deferred until at least February.

The stock, traded on NASDAQ, fell 9 cents to 59 cents a share. Trading was extremely heavy, at 370,000 shares, compared to average volume over the past three months of 85,300 shares.

Youbet's account-wagering application was deferred by the CHRB because the company had not completed the paperwork by Thursday's meeting to file a $500,000 bond to back its subscribers' accounts, officials said. An application by Autotote was also rejected for similar reasons.

"We view the California setback as a minor problem, not a major problem," said Youbet chief executive Ron Luniewski. "Unfortunately, the street does not see it that way."

Luniewski said that the company completed the paperwork related to the bond on Friday and provided $500,000 to the CHRB that afternoon.

Youbet is thought to have less than $3 million in cash, and company officials said late last year that it would need additional funding by the middle of 2002 to continue operating. Luniewski said the delay in completing the bond paperwork had "nothing to do with a cash problem."

Luniewski said that he expects the CHRB to approve Youbet's license application at a Feb. 21 meeting. Youbet has 2,500 California subscribers, but those subscribers are prohibited from wagering on California races through the system.

- additional reporting by Matt Hegarty