Santa Anita adds slot machine-like terminals sure to spark fight
The fight over horse racing tracks’ right to legally install slot-machine-like terminals in their facilities to allow betting on past races hit the boiling point on Thursday when Santa Anita installed 26 Racing on Demand machines at the track on the ground floor of the grandstand. They will be in operation after 11 a.m. on live racing days.
At the crux of the issue is the legality of slot-machine-type terminals. Is it pari-mutuel wagering, where the payoff is determined by the amount of money bet, and considered a game of skill? Or is it a game of chance, such as slot machines and most table games? If it is a pari-mutuel game of skill, then it is governed by the state regulatory agency, the California Horse Racing Board. If it is a game of chance, it is governed by the tribes, who hold exclusive purview over most non-pari-mutuel wagering in the state.
“This puts it on a collision course with the tribes,” said Victor Rocha, conference chair of the Indian Gaming Assn., who said he did not have advance notice of this. “They clearly know what they are doing, they are smart guys, but it is clearly gambling. They will get the appropriate response, politically speaking.
“When you put illegal gambling machines in a liquor store, it gets shut down. If Santa Anita has illegal machines, they should be out of business. California didn’t sign up for racinos [the term for race tracks that have casinos].”
The addition of the machines was first reported by the Paulick Report.
Determining if these machines are skill or chance remains the unresolved issue, with each side claiming the view that best suits their advantage. The machines, which fall in the specter of Historical Horse Racing, have the look and feel of a slot machine with a rapid churn of money. You get scant information on the horses or jockeys you are currently betting on. The default on these machines is you just see the last two to three seconds of the race. The tracks contend that because they give you minimal handicapping information, and that you are not betting against the house but other players, it’s a game of skill.
One loophole that the tracks are trying to use on this was the passing of a three-by-three bet in April 2024. In it, you have to pick first, second and third in three pre-chosen races. All the wagers go into the same pari-mutuel pool, where you compete against other bettors. The track does take a percentage off the top, although in this case, the percentage and distribution are not known. In most areas, Historical Horse Racing uses about an 8% takeout. Live horse racing has an average takeout of 20% but it varies by type of bet. This is the first time the three-by-three has been used on past races.
“I think like sweepstakes and prediction markets, everyone has lost their mind when it comes to gambling,” said Rocha. “Everyone is looking for a loophole. [Santa Anita] has been champing to get into digital gaming. This is clearly a violation of state compacts. You can expect a very full-throated reply.”
A couple play a Historical Horse Racing electronic gambling machine at the Nash Casino. Santa Anita Park in Arcadia has installed comparable machines.
(Boston Globe via Getty Images)
The Thoroughbred Owners of California (TOC) foreshadowed a move like this on page 25, item 41, of its Race Meet Agreement with Santa Anita where it said:
“Wagering on Concluded Races. Track shall not import and conduct wagering on concluded races at Santa Anita Park or Online without first obtaining the consent of the TOC and the CHRB. TOC hereby consents for Track to have at Santa Anita Park up to forty (40) self service totalizator terminals that facilitate wagering on concluded races.”
No one thought much of it at the time as the consortium working on the HHR project didn’t seem to be doing much. If the machines are allowed to stay at Santa Anita, it is expected they will soon be installed at Del Mar and Los Alamitos.
What is expected to go on now is the fight over if the machines can stay there. If it’s a case of winning friends and influencing people, the track is already in a deficit by not telling the group that regulates the sport that this was coming.
“Like everyone else, we had heard rumors, but the CHRB was unaware of this actual move,” a CHRB spokesman said in a statement.
Historical horse racing betting terminals sparked controversy when they were installed in Idaho. Similar machines were installed at Santa Anita Park in Arcadia.
(Otto Kitsinger/AP)
The CHRB was anticipating an ask to amend the track’s license that would allow it to place what they thought would be Historical Horse Racing machines at Santa Anita. It even asked its legal staff to come up with an opinion about if putting the machines in would be legal. The Times request for the document was turned down citing attorney-client privilege.
But neither Santa Anita nor the Thoroughbred Owners of California requested an agenda item by the cutoff 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 this. Santa Anita did not even put out a news release about this new betting opportunity at the track. And, it did not even mention it in its racing day newsletter “Stable Notes,” which generally touts things for fans such as $2 hot dogs and free parking.
However, in a one-page fact sheet about Racing on Demand, TSG painstakingly tries to explain why it “Does Not Violate Tribal Gaming” and why it has “Existing Authority.”
In a section titled “What It’s Not,” it makes these points about what it isn’t:
“— A slot machine.
“— House-banked gambling.
“— Historic Horse Racing (as operated in Kentucky, Virginia or other states.)”
The tribes have enormous political influence in California, in part, because of the millions of dollars it spends in 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 prohibited companies from offering types of online sweepstakes that are seen by the tribes as a threat to their gambling exclusivity. The combined vote was 120-0.