Santa Anita adds slot machine-like terminals sure to spark fight
The fight for the right of racetracks to legally install slot-machine-style terminals at their facilities to allow betting on past races reached a boiling point Thursday when Santa Anita installed 26 on-demand racing machines at the track, on the main floor of the grandstand. They will be operational after 11 a.m. on live racing days.
At the heart of the issue is the legality of slot machine-style terminals. Is it a pari-mutuel bet, where the winnings are determined by the amount of money wagered and considered a game of skill? Or is it a game of chance, like slots and most table games? If it is a pari-mutuel skill game, then it is governed by the state’s regulatory agency, the California Horse Racing Board. If it is a game of chance, it is governed by the tribes, who hold exclusive jurisdiction over most non-pari-mutuel betting in the state.
“It puts him on a collision course with the tribes,” said Victor Rocha, conference president of the Indian Gaming Assn., who said he was not informed in advance. “They clearly know what they’re doing, they’re smart guys, but it’s clearly gambling. They’ll get the appropriate response, politically speaking.
“When you put illegal slot machines in a liquor store, the liquor store is closed. If Santa Anita has illegal machines, they should go out of business. California has not signed on for racinos [the term for race tracks that have casinos].”
The addition of the machines was first reported by the Paulick Report.
Determining whether these machines are the product of skill or chance remains an unresolved question, with each side claiming the viewpoint that best suits their advantage. The machines, which fall within the spectrum of historic horse racing, have the look and feel of a slot machine with rapid money spinning. You get little information about the horses or jockeys you are currently betting on. The default on these machines is that you only see the last two to three seconds of the race. The titles claim that because they give you minimal information about the handicap and you are not betting against the house but against other players, it is a game of skill.
One loophole that tracks are trying to exploit in this regard has been the move to a three-by-three bet in April 2024. In it, you have to choose first, second and third in three pre-selected races. All bets go into the same pari-mutuel pool, where you compete against other punters. The track takes a percentage at the top, although in this case the percentage and distribution are not known. In most areas, Historical Horse Racing uses about 8% takeout. Live horse racing has an average cashout rate of 20%, but this varies depending on the type of bet. This is the first time the three-by-three has been used in previous races.
“I think like with sweepstakes and prediction markets, everyone has lost their mind when it comes to gambling,” Rocha said. “Everyone is looking for a loophole. [Santa Anita] looking forward to getting into digital gaming. This is clearly a violation of state compacts. You can expect a very comprehensive response.
A couple plays on a Historical Horse Racing electronic gaming machine at Nash Casino. Santa Anita Park in Arcadia has installed comparable machines.
(Boston Globe via Getty Images)
The Thoroughbred Owners of California (TOC) foreshadowed a decision like this on page 25, item 41, of their competitive racing agreement with Santa Anita, where they stated:
“Wagering on Completed Races. Track shall not import and place wagers on completed races at Santa Anita Park or online without first obtaining the consent of TOC and CHRB. TOC hereby authorizes Track to have at Santa Anita Park up to forty (40) self-service tabulation terminals that facilitate betting on completed races.”
Nobody paid attention to it at the time, because the consortium working on the HHR project didn’t seem to be doing much. If the machines are allowed to remain in Santa Anita, they should soon be installed in Del Mar and Los Alamitos.
What should continue now is the fight over whether the machines can stay there. If it’s about winning friends and influencing people, the track is already at a deficit by not warning the group that regulates the sport that this is going to happen.
“Like everyone else, we had heard rumors, but the CHRB was not aware of this actual decision,” a CHRB spokesperson said in a statement.
Historic horse racing betting terminals sparked controversy when they were installed in Idaho. Similar machines have been installed at Santa Anita Park in Arcadia.
(Otto Kitsinger/AP)
The CHRB expected a request to amend the track’s license that would allow it to place what it believed to be historic horse racing machines at Santa Anita. He even asked his legal staff to advise on the legality of installing the machines. The Times’ request for the document was denied citing attorney-client privilege.
But neither Santa Anita nor California Thoroughbred Owners requested an item be placed on the agenda before the deadline 12 days ago.
Santa Anita’s owner, the Stronach Group, did not respond to multiple requests for comment.
In fact, no one seems to want to talk about it. Santa Anita hasn’t even issued a press release regarding this new betting opportunity at the track. And he didn’t even mention it in his race-day newsletter “Stable Notes,” which usually touts things for fans like $2 hot dogs and free parking.
However, in a one-page fact sheet about on-demand racing, TSG painstakingly attempts to explain why it “does not violate tribal games” and why it has “existing authority.”
In a section titled “What it is not,” he lays out the following points about what it is not:
“- A slot machine.
“– Bank games of chance.
“— Historic horse racing (as held in Kentucky, Virginia, or other states.)”
Tribes have enormous political influence in California, in part because of the millions of dollars spent on political contributions. They are known to freely litigate any challenge to their sovereignty over most non-pari-mutuel gambling in the state. And they almost always win.
Last year, the California Legislature passed Assembly Bill 831, which prohibits companies from offering types of online sweepstakes seen by tribes as a threat to their gaming exclusivity. The combined vote was 120-0.
