12/14/2010 1:54PM

California sports bar to begin taking bets Friday

OC Tavern
The OC Tavern in San Clemente will open as California’s first satellite facility in a sports bar on Friday.

SAN CLEMENTE, Calif. – Mike Merrigan, the owner of the OC Tavern in this Orange County beach town, was a little surprised when an older lady walked into his sports bar recently.

“She was about 80,” he recalled earlier this week. “When she came in, I thought, she probably needs to use the ladies’ room, but she said, ‘When is the racebook going to open? Is it ready?’ ”

Merrigan told her the racebook was still under construction and offered her a quick tour, which she cut short.

“She said she had to get to Los Al in time for the first race at Hollywood Park,” Merrigan said.

Starting Friday, she will not need to make that trip to Los Alamitos, when the OC Tavern opens as California’s first satellite facility in a sports bar. Legislation permitting an expansion of satellites into card clubs and sports bars was passed in 2007 but has been implemented at only one location so far – the Commerce Casino card club, south of Los Angeles, in July 2009. Otherwise, California bettors must place bets at a racetrack, some county fairgrounds, or via telephone or Internet with an account wagering service.

At OC Tavern, where the bar affords customers a view of the Pacific Ocean, satellite wagering will be presented in a market where customers were previously forced to make lengthy drives of approximately 40 miles south to Del Mar or about 45 miles north to Los Alamitos to find a betting window.

Merrigan, 45, bought the OC Tavern in 2007 and remodeled it from a theme bar to a sports bar. He sought a license for satellite wagering after the California Horse Racing Board completed its rules and regulations for such venues in 2008. For more than a year, Merrigan has worked with city officials on changing his sports bar, which has a capacity for approximately 300, into a facility that can accommodate race bettors.

Racing officials are reluctant to project how much mutuel handle OC Tavern can generate, but privately some hope the sports bar can draw more than 100 bettors per day for afternoon and evening simulcasts of races from California and major markets around the nation. For the sport in general, a sports bar that offers wagering allows instant access to a coveted demographic long sought by racing officials as potential customers.

By opening a simulcasting location that will cater primarily to daytime racing, Merrigan hopes to build his business after spending $2.2 million in the last four years to renovate the property.

“I think it will be a shot in the arm,” he said.

OC Tavern has hosted music in the past in part of its facility, and that room will be the focus of the racing operation. Earlier this week, a construction crew was completing work on a room that will feature 30 televisions and numerous betting terminals.

The facility will have the look and feel of existing sports bar simulcast locations in existence in Arizona and Illinois.

As a satellite facility, OC Tavern will retain a portion of the bets, but the overall distribution of revenue will be similar to California simulcast networks, which have experienced significant declines in the last decade through the migration of handle to account wagering services and economic declines.

Merrigan said he has been getting “five to 10 calls a day” from racing fans who want to know when the sports bar will begin taking bets.

“It will be exciting to see how far this will come,” he said. “Who knows what will happen with this?”