03/24/2013 2:09PM

California's plan for exchange wagering sustains major setback


ARCADIA, Calif.- The launch of exchange wagering in California will be delayed for months, and possibly into 2014, after the state’s Office of Administrative Law recently cited extensive faults to a set of rules approved in 2012 by the California Horse Racing Board.

In a 19-page decision of disapproval published last Thursday, George C. Shaw, the Office of Administrative Law’s senior counsel, called for revisions to eight of the 25 rules. In a statement, the racing board said that the Office of Administrative Law cited “failure to comply with the specified standards of necessity, consistency, and clarity.”

The racing board’s statement said staff members have started work on legal documents in an effort to submit revised rules for exchange wagering to racing board commissioners in the near future, possibly later in the spring. Any changes in the rules must follow a lengthy sequence of events, including a public comment period, a public hearing by the racing board, and a resubmission of the rules to the Office of Administrative Law for legal review.

If approved, exchange wagering would not begin until the racing board completes the implementation of oversight technology. In addition, a racetrack and horsemen’s group would need to reach a financial agreement with an exchange wagering provider, and receive approval from the board, before exchange wagering could start.

Exchange wagering, which is popular in Britain, allows bettors to back or lay horses to win or lose. Legislation allowing exchange wagering was approved by the state legislature in 2010, pending the development of rules by the racing board.

The board approved rules for exchange wagering last November and submitted more than 1,000 pages of documents to the Office of Administrative Law for review on Jan. 31.

In its decision, the Office of Administrative Law cited numerous concerns, including excessive license fees to be charged to an exchange wagering provider.

The Office of Administrative law cited racing board documentation as stating that “the total annual estimate” of regulating exchange wagering would be $510,000. The legal review faulted the racing board’s two-year $1.4 million fee in that “appears to exceed the reasonable costs of the program.”

In addition, the Office of Administrative Law faulted the racing board’s costs for a license fee and that it “assumes there will be only one licensee”, even though the racing board submitted other documents suggesting there will be other licensees.

The board stated in its rules that the $1.4 million fee could be reduced to an “amount to be determined by the board”, but the Office of Administrative Law said that rule “lacks clarity” as to why the fee could be adjusted. The board stated that the license would be for two years “unless otherwise determined by the board,” but failed to state what conditions would lead to a shorter term, the legal review stated.

The Office of Administrative Law also cited the racing board’s use of terms for approving exchange wagering applications by providers, rules pertaining to how exchange wagering providers would deal with customers in the event that a wager is canceled for being “inappropriately disrupted” and how to remedy an account rewarded an incorrect payoff.

The Office of Administrative Law wrote that the board failed to cite a relevant reason why an exchange wagering provider should be exempt from disclosing its operating plan to the public. Citing a government code, Shaw wrote that he could not find any legal precedent for a non-disclosure arrangement.

The Office of Administrative Law cited the racing board for failing to submit complete information regarding an economic impact analysis, and other documents, and failing to conduct a full 15-day public comment period for a rule change last year.


AllanW More than 1 year ago
Exchange wagering is the future. PM the past. why pay 15-25% takeout when you can pay 10% or less.
Bruce Epstein More than 1 year ago
This is a foolish concepet. Only a country who was once king and now a small time globle nation, would bet like this. It clearly bleeds on the foolish or many imagrants living in UK, who have no sense of fair play. It's a con of con's.
georget More than 1 year ago
If Todd or Jamie or Wayne or Ron or Doug says to you the owner, "This horse is gonna need a couple races", how do you bet?
John More than 1 year ago
This hopefully will take this freaking FIASCO and run it into the soil ! This is nothing but bad for all of racing. This Keith Brackpool is a con artist and BetFair sent him to California to set up this sham ! Racing is having enough trouble trying to right the ship, we dont need the problems that can arise if a horse gets stiffed or not, geez, what a idiots book of dreams, take this smelly wad of crapola back to England Keith ! Sorry, no soup for you !
Bruce Epstein More than 1 year ago
100% correct, if Americans can't smell this as a bad deal, we've all lost our sight.
mikey More than 1 year ago
Take this junk back across the pond.T,V.G and all the clown's who are on air can go with them.First clean up the game a bit before this even is a dream.Betfair can stay with the high hats and tails at english tracks.
Bruce Epstein More than 1 year ago
Please take Todd and his 'up my boss's ass" way's. This will never work in NY or NJ, only CA would think it's a winner. Alos, Richie (dead Chalk) Perlman is a fool.
Goldhybrid More than 1 year ago
It's time congress starts an investigation. The British are taking over the country. Notice you can't event watch tv or listen to the radio without some Brit speaking their funny tongue trying to sell you something. Even a lousy lizard selling insurance (Geico) has got to have that accent. Am I supposed to appreciate the product more because of that? Honda Odessy commercial - there's a woman with a British accent trying to sell a Japanese car. Even the Japanese know we're saps.
wolves More than 1 year ago
betfair rob their customers with multiple hidden charges....if you are a winner on betfair, they can charge you up to 60% commission on your winnings.....bet a horse on betfair at even money and you may end up with a 2/5 payoff.....sneaky devils, that's betfair.
kingsailor2 More than 1 year ago
Hope this never sees the light of day. Just look how the handle and purses have increased at Gulfstream because of the Rainbow Pick 6 -- both up 20-25%. Isn't this the way to go?
Bruce Epstein More than 1 year ago
Finally a smart comment, take CA racing and run in in TX. This will never work.
Nathan More than 1 year ago
the cal. racing board got caught with their hands in the cookie jar. again.a real bunch of gangsters. as a result , they have delayed by at least a year, the only form of betting that can save horseracing in cal. all that will be left will be the $2 bettor.
wolves More than 1 year ago
it won't save California racing, it'll do the opposite......if you expect to be a winner on betfair, you should learn about their premium charges, up to 60%