CHRB orders Golden Gate to reach Northern California OTB contracts by July 2

Golden Gate Fields was ordered by the California Horse Racing Board on Thursday to reach contractual agreements with Northern California offtrack satellite locations, as well as horsemen’s organizations representing owners and trainers, by July 2 to be granted a license for a six-week race meeting from late August to early October.

Officials with the track’s parent company, The Stronach Group, stated recently that Golden Gate Fields is seeking to end a decades-long arrangement of sending its simulcast signal to a satellite network in the northern section of the state in favor of the development of an alternative network of betting “cafes” where people could place bets that would be treated as account wagers.

The Stronach Group operates XpressBet, an account wagering company.

During the racing board’s monthly meeting in Pleasanton, Calif., on Thursday, officials with The Stronach Group said no immediate plans exist to replace the satellite network. Officials with the Thoroughbred Owners of California told the racing board that handle from the satellite network in Northern California accounts for 50 percent of revenue for purses, creating concern that any disruption of simulcasting would lead to lower prize money.

At the outset of the discussion, the racing board’s legal staff advised the board not to approve the applications on the grounds that Golden Gate Fields did not file a completed application. Specifically, the paperwork lacked “operational agreements with all eligible satellite facilities” and did not “provide for maximum expansion of horse racing opportunities,” the legal staff said. The application did include agreements with the Southern California-based satellite network, the legal staff stated.

Golden Gate Fields and the Thoroughbred Owners of California appear to be far apart on numerous issues, according to TOC president and chief executive Greg Avioli.

“The goal of the Stronach Group has been to create chaos,” Avioli said. “They have created chaos.”

Avioli said “there is no path for a horsemen’s agreement with Golden Gate Fields” without a Northern California simulcast network.

Avioli acknowledged that the offtrack market is changing rapidly. He said handle from account wagering sources in Southern California handled $478 million in 2017, more than the $452 million generated by satellite wagering locations in that region. This was the first time account wagering handle surpassed satellite handle in Southern California since the advent of account wagering in the state in 2002, he said.

By comparison, Avioli said the Northern California satellite network handled $183 million in 2017 compared to $166 million from account wagering sources.

Racing board vice-chair Madeline Auerbach challenged Eric Sindler of The Stronach Group for details regarding a contingency plan to generate sufficient money from handle from sources other than the existing satellite network.

“We are still in discussions,” Sindler said.

Auerbach pressed Sindler, asking if the track had any plans.

“We are working on it,” Sindler replied.

Sindler was the only executive with The Stronach Group to speak on the subject on behalf of Golden Gate Fields.

Tim Ritvo, the chief operating officer of the Stronach Group, said recently that the current economic model with satellite locations is unsustainable and could lead to the closure of Golden Gate Fields. TOC officials said at Thursday’s meeting that the Northern California satellite network remains profitable, but acknowledged that the network has had declining revenue with competition from account wagering sources.

Golden Gate Fields faces a tight deadline to complete the contract negotiations with the satellite networks and horsemen’s organizations before July 2. The next racing board meeting has been pushed forward by a week to July 12 and will be held at Los Alamitos, racing board chairman Chuck Winner said on Thursday.

The July 12 meeting will discuss Northern California racing dates for 2019, Winner said.

“Everything will be dependent with what The Stronach Group does by July 2,” Winner said.