Davis reverses field, signs controversial gambling bill

The bill, AB 471, marks a victory for racetracks facing declines in revenues, as well as for labor groups seeking to unionize backstretch workers and ensure regulation of their housing and workplace conditions.


Gambling critics, however, assailed the Democratic governor for his about-face from last year, when he vetoed a similar measure he said would have expanded wagering too far.


In a two-page message released Monday, Davis said he reversed his position primarily because of a December 2000 federal law change explicitly permitting Internet gambling. Signing last year’s bill without that change “would have represented a significant expansion of gambling beyond federal law,” he stated.


But for the federal law to apply, a state must first affirm that horse race betting can occur via the Internet or telephone, said I. Nelson Rose, a Whittier Law School expert on gambling law.


“I don’t see how the change in federal law makes the policy decision any different,” Rose said.


Davis relied on a legal opinion offered by state Attorney  Togel General Bill Lockyer. In the opinion, Lockyer said that “because AB 471 will not create a new form or expand an existing form of gambling, it is not an expansion of gambling.”


The bill allows “advanced deposit wagering,” a system enabling gamblers to set up an account with a state-authorized racing association and place bets through the phone or Internet. Proposed safeguards aim to prevent minors from accessing accounts, as some critics fear could occur.


The labor provisions, when paired with at-home gambling opportunities, have been backed by a broad coalition of racetrack owners, horse trainers and labor organizers.


California has more than 3,500 backstretch workers, who clean and care for horses at racetracks throughout the state. Many live in inadequate storage rooms adjacent to stables, a condition they accept because they say they earn too little to afford housing elsewhere.


By all indications, Davis’ reversal came within the last month. As recently as early July, Roger Salazar, the governor’s deputy press secretary, said that “while (Davis) hasn’t weighed in on this bill, his bias still stands,” in reference to his previous year’s veto.


While the coalition of support remained solid throughout the legislative process, five major racing organizations hired a heavy gun weeks before Davis signed the bill.


On July 13, three Southern California horse racing clubs, an in-state affiliate of Kentucky-based Churchill Downs and a horse owners’ association hired Darius Anderson, a former Davis fundraiser and organizer of the governor’s inauguration committee, to campaign on their behalf. Anderson could not be reached for comment.


With the governor’s signing, the new law takes effect Jan. 1.


Under the bill, the California Horse Racing Board will establish guidelines for housing through consultation with local agencies. Horse trainers, who employ backstretch workers, will be required to maintain accurate payroll records.


“I think that a regular and routine audit of every employer in this industry is an excellent standard,” said Allen Davenport, a lobbyist for the Service Employees International Union. “It’s an industry that has had a notorious record of cash pay.”


Some racetrack officials said they supported workplace reforms because they will receive Internet and phone gambling opportunities as a trade-off.


“In my view, the (backstretch) legislation was going to be adopted whether or not it was coupled with account wagering,” said Sherwood Chillingworth, executive vice president of Arcadia-based Oak Tree Racing Association. “It’s much better with the two put together. At least with account wagering, it will provide more purses for owners, and the trainers will (be able to) more than offset what the labor cost is going to be.”


One gambling opponent, however, characterized the bill’s enactment as “crossing another threshold in the expansion of gambling.”


“For the first time, Californians can legally gamble from home,” said Art Croney, executive director of the Committee on Moral Concerns. “We’re going to see people gamble more than they can afford to lose because it will be convenient.”


Proponents of the legislation challenged the expansion characterization, arguing that some Californians already use the Internet and telephone to place bets on in-state races through out-of-state companies. At least 10 other states already allow such forms of gambling, some for as long as two decades.


“All we have done is put together a way to regulate this practice and ensure that that money stays in the state of California,” said Assemblyman Herb Wesson, D-Culver City, an AB 471 co-author. “As it is today, we’re not getting a penny of it. To me, that’s stupid.”


Wesson authored last year’s similar proposal, AB 2760, which was vetoed by the governor. At that time, Davis said he would sign a bill that would protect backstretch workers but not expand gambling.


In response, Wesson this year presented two bills – the one Davis signed Monday and another, AB 856 – that contained only the backstretch worker provisions. As it turned out, Wesson did not need the alternate legislation, which remains in an Assembly committee.