02/21/2010 12:00AM

CHRB seeks expansion of mini-satellites


ARCADIA, Calif. - A severe decline in handle through California's off-track wagering network in recent years is evidence that the state needs to develop a network of mini-satellites in card clubs and sports bars, according to David Israel, vice chairman of the California Horse Racing Board.

On Friday, the racing board heard testimony from racing officials that the Southern California Off-Track Wagering Inc. network of betting locations at county fairgrounds and racetracks throughout the region was operating at a deficit that was being offset by monies that would have gone to purses or racetrack commissions.

The network has suffered a decline of 40 percent in the last eight years because of the migration of handle to account-wagering sites, through the Internet and telephone, and due to a poor economy.

In 2007, legislation approved wagering on racing at card clubs and mini-satellites, but so far only one card club - the Commerce Casino, near downtown Los Angeles - has opened. Officials have held discussions with sports bar operators in San Clemente and Santa Barbara, but so far no one has approached the racing board seeking a license.

The Commerce Club mini-satellite, which opened last July, has averaged $80,000 in handle a day, taking bets on both the afternoon and evening races.

Israel, speaking at Santa Anita on Saturday, said a network of such sites could force the existing satellites to be more competitive to draw customers. The sports bars in particular, he said, hold the most appeal to attracting new customers and increasing handle.

"They attract new and different people that are interested in sports," he said. "When they see how much fun it is, they might come to the track on a Saturday or Sunday."

Israel said racing has developed the habit of catering to its own customer base and ignoring other sports fans that could develop an interest.

"We have an opportunity to branch out to new people," he said.

Some sports bars in urban areas need waivers from racetracks to open mini-satellites if they are within 20 miles of an existing satellite. New legislation is being considered that would reduce the range to 15 miles.

Israel and racing board chairman Keith Brackpool told Southern California Off-Track Wagering Inc. officials to present a five-year business plan to the board in coming months.