07/25/2002 11:00PM

Race books look to stem tide of decreased business

Email

A typical Nevada Gaming Commission meeting draws a sparse crowd. But this past Thursday was different as the Nevada Parimutuel Association gave a "state of the Nevada parimutuel industry" presentation.

Strong support from race book operators and horse race bettors led to a standing-room-only crowd in the committee room.

The NGC heard about the past, present, and maybe the future of the parimutuel industry here.

A history lesson it was. But the focus of the presentation is that since 1996, the parimutuel handle has declined from $523 million to $487 million last year. That is a stark contrast compared with the same time period; U.S. handle has increased from $11.6 billion to $14.5 billion.

The NPMA presentation speakers included: John Avello, director of operations, race, sports and keno for Bally's/Paris Las Vegas; John Sullivan, vice president and general counsel of Las Vegas Dissemination Company; Anthony Cabot of Lionel Sawyer and Collins; and Tom Fontaine, vice president of interactive gaming for Station Casinos.

In a timeline presented by Avello, a turning point in the growth of parimutuel wagering in Nevada came in 1997. That's when California horse racing boycotted Nevada for nine months in a stalemate over rebates.

A rebate is typically cash back to a large bettor determined as a fluid percentage of his total wagers.

California felt that Nevada rebates to big bettors "were taking their customers." As a consequence, the NGC adopted new legislation prohibiting all forms of rebates, cash or otherwise.

What happened was, it created the off-shore betting industry, which openly offered rebates. Conservative estimates place off-shore horse race handle between $500 million to a billion dollars.

Not only were NPMA members injured, but also the very racetracks it was meant to protect. That's because horse racing's biggest bettors could bypass the racetracks and Nevada casinos and set up lucrative off-shore accounts.

The report cited other issues like Nevada's failure to utilize new technology, improved marketing, and customer service within the racing industry and the growth of phone account wagering.

Oddly enough, a new NGC ruling where phone account wagers for horses had to come in line with sports was not addressed. A Nevada sports bettor using a phone account must wear a beeper so after the sports bet is called in, a return call is made to the beeper, which ensures the bet was made within the state.

The new rule has basically stopped horse betting by phone in Nevada. The rule is so onerous that no other jurisdiction in the U.S. conducts phone betting in this manner.

Afterwards, both sides believed this was a good starting point.

"As a provider of the hub service, it was important to make a presentation to show where we've been, and how at one point Nevada was the absolute leader in simulcasting," said Vincent Magliulo, director of corporate affairs for LVDC.

"The NPMA gave us a very informative presentation of issues that are confronting the industry today," said Peter Bernhard, chairman of the Nevada Gaming Commission. "One of our purposes is to make sure that we keep our industry competitive with what people are doing in other jurisdictions."

Bottom line, as much as the racing industry has learned from Nevada race books, the student may have surpassed the teacher. If nothing else, it is crystal clear that the status quo in the Nevada parimutuel industry is not good enough anymore.

Richard Eng is the turf editor for the Las Vegas Review-Journal and host of the Race Day Las Vegas Wrap Up Show.