There was a time, especially in the years just before and after World War II, when horse racing, the self-proclaimed “sport of kings,” reigned supreme in California.
With a near-monopoly on legal gambling, horse racing wielded big-time political clout. Legendary lobbyist Artie Samish protected it in Sacramento. After he went to prison, James Garibaldi, known as “The Judge” for a previous occupation, stepped in. The industry showered legislators with campaign money and favors, such as printing “newsletters” for constituents.
In 1980, Garibaldi persuaded legislators to give the industry a $15 million-a-year cut in state taxes, claiming — without evidence — that it faced financial disaster. Then-Gov. Jerry Brown approved the bill, but a week later vetoed an $18 million appropriation to save public libraries, claiming that “state government is perilously close to an unbalanced budget.”
The stark contrast did not go unnoticed, nor did the fact that Garibaldi’s lobbying practice was a subsidiary of a law firm headed by Brown’s father, former Gov. Pat Brown.
By and by, the horse racing industry did fall on harder times, losing younger patrons to other venues of sports, entertainment and gambling, especially the Indian casinos that now dominate California’s gambling trade. It’s clearly in decline, with one major track already closed and others barely staying open.
This year, the industry’s many stakeholders — with Gov. Arnold Schwarzenegger’s blessing — agreed to raise the “takeout” from the betting pool by about $30 million a year to increase purses for race winners and take steps to make the big Breeders’ Cup race a permanent California fixture.
Assembly Speaker John A. Perez introduced enabling legislation, but at the last moment amended it to include “exchange wagering,” in which individual bettors face off against one another. It was pushed by a British firm called Betfair and by horse racing labor unions.
It split the industry in the closing days of the legislative session.
However, on the final day, an uneasy semi-agreement was forged. It allows exchange wagering only after a two-year delay, only after the California Horse Racing Board and the state Department of Justice confirm its legality and practicality, and with a four-year limit, the latter imposed by Senate President Pro Tem Darrell Steinberg.
Schwarzenegger probably will sign the legislation, but not everyone in the industry is happy with it. The battle may resume at the Horse Racing Board or in the courts.
Dan Walters’ Sacramento Bee columns are syndicated by the Scripps Howard News Service.