Reprieve for Satellite Wagering

Thanks to a dozen or so horserace fanatics who stampeded into the Earl Warren Showgrounds board meeting on Thursday night, the satellite wagering facility known as Earl’s Place will stay open another month–at least until the board meets again on October 15. During that time, those same gamblers are charged with developing a plan that will bring the money-losing facility back to financial health.

“Essentially, they felt that they had not been heard, that their opinions had not been sought out,” explained the showgrounds CEO Scott Grieve. “We also detailed them on the financial situation, and despite the fact that they feel very strongly and passionately, the numbers didn’t change.” Grieve said the board voted 6-3 to allow the satellite patrons to determine a means of making the once-profitable business successful again. That might mean moving the license to an off-site location, such as a restaurant or bar. “If something along that nature can be worked out, the board is willing to continue,” said Grieve. “This next month is about giving people a chance to say, ‘Here’s one way to save it.’ Maybe somebody knows somebody who’s interested in trying this opportunity.”

But before the board initially voted in August to end the practice, Grieve said he asked around among various private places in town, and there were two particular problems in Santa Barbara. “One, the price of real estate is so high that people don’t want to turn part of their establishment into a racing venue,” explained Grieve. “Right here, we don’t pay rent and we still can’t make it work financially.” The facility takes a small percentage of every bet made. And two, Grieve said, “A big limiting factor is parking. We can draw as many as 400 to 500 people for a Kentucky Derby. Where else are you going to park that many people in town?” Because of those factors, Grieve said, his conversation with private businesses eventually ended up with them asking him, “So you want to split your losses with us?”

If the coalition of gamblers is not able to develop a profitable scenario, it’s almost assured that the board will vote to close Earl’s Place at the next meeting on October 15. If that does occur, and the license is surrendered, that’s not necessarily the end of satellite wagering in Santa Barbara.

According to Christopher Korby, the executive director of the California Authority of Racing Fairs, a recent law allows anyone to open a mini-satellite facility. “If someone local wants to take advantage of the opportunity on their own, the law would allow it,” said Korby, whose organization represents fairgrounds with satellite facilities or actual racetracks.

If Earl Warren does surrender its license, then an individual still must apply through the California Horse Racing Board for a new license, which would involve a thorough background check. In fact, an individual could apply for a new license even if Earl Warren were to keep its license. The only stipulation is that, if an existing satellite facility is within a 20-mile radius, that facility would have to sign off on the new one. But if Earl’s Place closes, then there’s no competition in Santa Barbara, and anyone could partner with a bar or restaurant to bring on the betting. “It’s a pretty good market,” said Korby. “There’s a lot of money there.”

On that point, however, Grieve and the Earl Warren boardmembers disagree. Even if they could make the money work in the short-term, Grieve is convinced it’s a dead-end road in the long haul. “Racing has seen its golden day,” he lamented. “Unless there’s a real change in what people like to do, I don’t see it having a bright future.”