SACRAMENTO — California's horse racing industry may soon have a big weapon to fend off expected competition from the state lottery: a "pick nine" wagering system that could offer payoffs as high $5 million on a $1 bet.
Under the proposal, put forward by the Santa Anita Race Track, daily pick nine prizes would go to any bettor who correctly chose all nine winners on a nine-race program--a 300-million-to-one chance.
If no one picked nine winning horses, 25% of that day's wagers would be awarded to whoever picked the most winners, and the rest of the money would be rolled over to the next racing day. When the pool reached $5 million, the pot would be awarded to the most successful bettor, regardless of the number of winners picked.
The new wagering system, if approved by the state Horse Racing Board in August, would take effect in late September or early October, just as the state lottery is expected to begin. The state Lottery Commission decided Wednesday to offer individual payoffs as large as $3 million.
The horse racing industry was the chief opponent of the lottery ballot measure overwhelmingly approved by voters last year.
Alan Balch, senior vice president of the Los Angeles Turf Club Inc., which operates Santa Anita, said he believes that the lottery could siphon away 5% to 20% of the more than $2 billion bet on horses in the state each year.
"In our opinion, nobody knows what the effect will be, but the potential for serious harm is obviously there," Balch said. "We need to be aggressive in our response. We don't want to sit back and be steamrollered and in two years say, 'Gee, the lottery ran us out of business.' "
Mark Michalko, executive director of the California State Lottery Commission, said, however, that he does not expect the lottery and the racing industry to compete with one another.
"More power to them," Michalko said when told of the proposal. "Our market and our marketing approach are very different from theirs. I don't consider that to be a problem for us, nor do I see us as a problem for the racing industry."
Nonetheless, Leonard Foote, the racing board's executive secretary, said Thursday that he has some reservations about the proposal. Foote said he expects to recommend that the board approve at most a "pick eight" system and adopt a maximum payoff smaller than $5 million.
Foote said that pick nine bets would have to made before the start of the first race and that the pick eight system would allow bettors to place wagers any time before the second race.
"They're going to have to come to the track well before the first race starts to put in their bets," Foote said of the pick nine plan. "That would probably preclude a lot of people from even making the bet."
The state collects about 6% of the money bet at the major tracks each day.
Foote also said he thinks that the more than 300 million combinations from which bettors would have to choose in order to pick the winners would be "a bit much."
Contests in which no money is wagered have shown that bettors are able to pick the winners in eight consecutive races, he said.
Such a contest is held every Sunday at Hollywood Park in Inglewood. The track offers a $1-million prize to anyone who can pick all nine winners. A spokesman for the track said two people have named eight straight winners since the contest began in April, only to lose the ninth race. Each pocketed a $100,000 second prize.
Santa Anita's proposal, however, calls not for a contest but for a pari-mutuel wagering system, similar to the pick six betting begun in 1980. Under that system, when no bettor picks all six winners, half of the money bet is distributed to the runners-up and the other half is carried over to the next day. The state's largest known pick six jackpot was $466,157, awarded on July 4, 1983, at Hollywood Park.
Santa Anita's Balch said he expects the $5-million jackpots to be rare under the pick nine system.
"I don't think it will ever reach $5 million," he said. "I think people will pick all nine winners a lot more often than people would think. I'm not denying that it's extremely difficult, but it can be done."
Balch said a pick eight system would not have the same attraction.
"It's very important that this be a distinctive bet," he said. "This is the type of bet nobody's going to bet with the expectation of winning it the first day. They're going to expect it (the pool) to be carried over and in fact want it to be carried over."