07/17/2014 11:35AM

CHRB won't target casual pool players


The California Horse Racing Board will not seek out individuals who are pooling their funds to make bets on state races despite its recent ruling that such common practices are illegal, an official of the board said this week in response to questions about its recent determination that account-wagering companies were violating the law when they pooled bets from their customers.

Issued three weeks ago, the CHRB ruling on so-called “players’ pools,” which were offered by twinspires.com and XpressBet.com, cited a section of the California penal code that explicitly states that an individual cannot place a bet on behalf of another player. The ruling raised questions as to whether bettors were breaking the law in California when they partnered on tickets for multileg wagers such as the pick six, or even if players put together money for a show pool, both common practices at racetracks around the United States.

The CHRB said it would not seek out players at racetracks pooling their bets unless one of the players was taking a cut of the action, despite its determination that pooling is illegal under a section of California law.

“Private individuals joining together at the racetrack to ‘pool’ their financial resources to purchase a single wagering ticket are subject to Penal Code sections 336.9 and 337a,” said Mike Marten, a spokesman for the commission, in response to questions. “The California Horse Racing Board is not in the habit of interfering with private individuals ‘conferring’ as to the placement of wagers. Bookmaking for profit is another matter.”

The ruling resulted in the CHRB issuing “cease and desist” orders to both twinspires.com and Xpressbet.com. Twinspires.com, which is owned by Churchill Downs Inc., would not comment on the issue, and officials of XpressBet did not return phone calls. Xpressbet is a partner with Daily Racing Form on DRF ’s account-wagering operation.

Both account-wagering companies had offered their customers the opportunity to pool their wagers on multileg bets. It is unclear if either company plans to offer players’ pools in the future while barring participation from California customers. California is the largest account-wagering market in the United States.

Partnerships that use computer software to place millions of dollars in bets a year on California races through robotic programs do not appear to have been targeted by the CHRB under the same ruling.

The CHRB said it received an opinion from its legal counsel on the practice, but it would not make that opinion available, citing attorney-client privileges exempting the opinion from federal disclosure laws. Although the CHRB acknowledged that the “matter was brought to our attention by others,” it would not identify the entities or individuals who raised the issue.

“We want to make sure that others do not hesitate to come forward if they have a concern,” Marten said.

The specific section of the penal code cited by the CHRB also includes a section that makes it illegal if an individual “lays, makes, offers or accepts any bet or bets” on a horse race, which would seem to explicitly outlaw exchange wagering, a type of betting pioneered by Betfair.com that was legalized in California in recent years. The CHRB has approved rules governing exchange wagering, but Thoroughbred racetracks and horsemen in California have yet to reach an agreement on the practice, as required by the law prior to implementation.

Marten said the section of the statute outlawing the laying of bets was nullified by the legislation that legalized exchange wagering, as long as the bet was defined as “exchange wagering.” The law defines exchange wagering as “pari-mutuel” betting, even though bets are not pooled.

Betfair owns Television Games Network, the second-largest account-wagering company in the United States. New Jersey also has passed legislation allowing for exchange wagering.