In an industry beleaguered by declines in on-track attendance and wagering and struggling to survive in a battered economy, there is a new ray of hope for the revival of California’s once dominant “sport of kings.” OC Tavern in San Clemente, California’s first sports bar to have horse racing pari-mutuel wagering, beginning last December, has exceeded the wildest expectations of its promoters. Strategically located on the California coast midway between Los Angeles and San Diego, OC Tavern is quickly becoming a popular destination for racing fans who cannot make the trip a little further down the coast to Del Mar, or north as far as Los Alamitos, to bet on the ponies.
“This is going to help racing because it’s all about the convenience,” said tavern owner Michael Merrigan in a recent interview. “With the high price of gas, it allows people to come enjoy racing more often. We have free parking just steps away, and free admission. But what people love is that they can make their wager and be right back to their seat in two seconds.
“There’s nothing like going to the track,” Merrigan continued. “But people who previously went to the track once every week or two can now come here every day because of the convenience factor.”
Visitors to OC Tavern are immediately struck by its energetic vibe. The spacious betting room is alive with horse racing simulcasts from Del Mar, Hollywood Park or Santa Anita, racing from northern California, and an assortment of out-of-state tracks broadcast on more than 30 flat screen televisions. There are 17 self-activated betting machines and as many as four live clerks, depending on the size of the day’s crowd. The warm décor and assortment of seating arrangements give the room a look and feel reminiscent of the betting room in the movie “The Sting,” leaving one with the impression that horse racing is hip and cool again.
OC Tavern draws 100 to 125 people a day wagering an average of $35,000. As many as 500 people showed up to watch and wager on each of the Triple Crown races.
The facility is serving as a kind of beta test for what Southern California Off-Track Wagering, Inc. (SCOTWINC) expects will be an eventual network of 45 such mini-satellite wagering locations in sports bars and restaurants throughout California. Since 1986, California has allowed off-track betting in satellite wagering facilities located at fairs and racing associations. In 2007, new legislation was enacted authorizing the creation of an additional 15 “mini-satellites” in each of California’s three racing zones, in an effort to make the sport more accessible to California racing fans while attracting a new, more casual demographic of bettors. The first mini-satellite opened in November 2009 at Commerce Casino.
SCOTWINC pays for, supervises and manages everything related to wagering at the mini-satellites. Staffing of the clerks is handled by the operating “live” track and is based on anticipated business. The mini-satellite, in turn, receives a commission of 2% of wagering handle.
Merrigan, who says that horse racing saved his tavern business, explains that the 2% is not really the motivation. “I appreciate it, but the revenue from food and beverage is what you’re hoping for. People are coming in to enjoy the races, be entertained, and enjoy good food and drinks.
“The things that have made us successful,” Merrigan continued, “are our service, our food and drinks, how we run things, and our setup and layout. But we needed a little extra something, and horse racing was it.”
The entire legal approval process for the OC Tavern took 16 months, much of that time spent on obtaining city approval. “We didn’t have any real opposition from the city,” said Merrigan. “We have a good reputation in San Clemente. The main thing was educating the city about what we planned to do.”
Rick Baedeker, Manager of Mini-Satellite Development for SCOTWINC, said the approval process should be reduced dramatically in the future. Along with Merrigan, SCOTWINC invested in legal expertise to go before the city.
“That process provided a firm foundation,” Baedeker said. “Subsequent mini-satellites will have a precedent and a body of legal background and support.” The next mini-satellite scheduled to open is located at the Roadhouse Grill in Santa Maria.
“The Roadhouse submitted their application on June 25,” said Baedeker. “And it should take about 60 days for approval, provided everything goes well with the CHRB (California Horse Racing Board, which must approve each new site). There is no reason it should be a long, drawn out process.”
The system of new mini-satellites may provide just the boost needed to nudge California horse racing in the right direction. Baedeker for one believes they will be a major factor in California racing’s future.
“I think they will definitely mean growth in purses and commissions, especially by the time we have achieved some kind of significant number of these,” Baedeker said. “It’s one of the few reasons we have to be optimistic in the state right now. But it’s real, and with each new one the process gets easier. I think the dominoes are going to start to fall.”
Perhaps Merrigan summed it up best when he said, “Right now it’s great timing for horse racing, because Zenyatta got so many people excited about racing again. Now it’s up to us to make it cool and hip. There’s so much competition now… you always have to be reinventing yourself.”