Handicapping the future of horse racing in state is tough

Bernard and Lillian Smith drive often from Vacaville to Cal Expo to spend a day at the races.

"We like the atmosphere," said Bernard Smith, a retired Air Force veteran. "It's comfortable – that's the main thing. We've made quite a few friends here."

The Smiths are at home in Cal Expo's satellite wagering center, which daily hosts a few hundred fans. That crowd will likely double today to watch three new Breeders' Cup races live from New Jersey's Monmouth Park as the first part of the two-day event. For the main Breeders' Cup card and eight more championship races Saturday, Cal Expo's simulcast center will have a packed house of 1,500.

"This is a big event, like the Kentucky Derby," Cal Expo racing director David Elliott said. "We always have a good crowd."

Cal Expo is one outpost among many horse-racing venues in California. More than 40,000 fans will watch the Breeders' Cup on Saturday at 33 satellites and current race meets at Santa Anita and Bay Meadows. Thousands more will be watching and betting from home.

Thus is the racing conundrum. Its base is so spread out, it's impact can be difficult to determine.

Cal Expo's simulcast center, opened in 1985, saw almost 210,000 fans come through its doors last year. They wagered more than $53 million.

As Cal Expo ponders the fate of its racetrack while negotiating with the NBA as a potential site for an arena, California racing faces its own quandary. Tracks are disappearing, squeezed out by high property values. Public facilities, meanwhile, such as Cal Expo are looking for investment money to stay in the game.

"There are many, many fans of racing in California," said harness trainer Jim Wilkinson, a Cal Expo regular. "It's a racing state – always has been – but things have changed. The crowds are smaller. It used to be the only way to make a bet was go to the track or Vegas."

People now can bet from home. Advance deposit wagering – legal home betting via the Internet – accounts for nearly 15 percent of all wagers in California. In 2006-07, those home wagers totaled $588 million.

"Those were my customers," Elliott said. "ADW hasn't created any new customers I know of, but it's cannibalized our customer base at the satellites and on track."

Tracks double as studios for televised racing to a global audience. About 92 percent of all wagers on Cal Expo's harness racing come from somewhere else. Saturday night crowds range between 1,000 and 2,000 harness fans, but the total betting often tops $1 million. In 2006, $176 million was bet on Cal Expo harness racing.

Although often portrayed as a "dying sport," racing ranks among the nation's biggest sports businesses. According to the National Thoroughbred Racing Association and ESPN, the sport's U.S. fan base has steadily grown in recent years to more than 78 million in 2006 – a 12.7 percent jump from 1999 and up 4.7 from 2005.

"One of the hidden gems about horse racing is that it's not just a sport," explained California Horse Racing Board member Marie Moretti. "It's a major gaming and entertainment industry and big agri-business. Most people don't recognize the huge contribution horse racing makes to our state."

Horse racing has a $15.2 billion annual positive economic impact in California and the industry employs more than 52,000 people, according to state reports. The sport also contributes $53 million to state and local taxes.

"Every day, thousands of people throughout the state work in racing, and not just at the racetrack," said industry analyst Ron Blonien of Elk Grove. "Those range from breeding farms to hay growers and all sorts of service industry jobs. Cal Expo alone probably impacts 2,000 jobs that wouldn't exist without racing."

More than 8.1 million California fans attended live horse racing or watched at simulcast centers in 2006, an average of 8,631 a day. Including home wagering, more than $4.26 billion was bet on California racing, an increase of 1.8 percent over 2005.

California ranks No. 3, behind Kentucky and Florida in breeding thoroughbreds, and its 300-plus horse farms produced 3,380 registered foals in 2006.

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• Call The Bee's Debbie Arrington, (916) 326-5514.