Track interests take on compacts

SACRAMENTO -- —  Terrence Fancher has been trying for years to bring slot machines or other new gambling devices to his struggling racetracks, including Hollywood Park in Inglewood. So it’s no surprise to the industry that he is the top money man in the campaign against four Indian casino deals on the Feb. 5 ballot.

The referendums on the compacts -- deals forged by the governor and last year passed by the Legislature -- were put on the ballot by Fancher and others who want voters to repeal the latest expansion of slot machines won by Southern California tribes.

Fancher is the executive managing director of real estate funds whose holdings including the Hollywood Park and Bay Meadows horse tracks, which have contributed $4.3 million to the campaign to kill Propositions 94, 95, 96 and 97 -- the biggest source of money in the “No” campaign.

Track owners, who are barred by state law from installing lucrative slot machines, have been dismayed at their loss of customers to other forms of gambling.

Voters in 2000 awarded Nevada-style gambling in California exclusively to Indian tribes.

Fancher, 54, has told local and state officials that he is prepared to tear down the iconic Hollywood Park track and replace it with homes and shops unless the state helps make the business more viable through a share of slot machine or video casino game revenue.

The compacts at issue provide four tribes authority to add 17,000 slot machines to the 8,000 they already have at their casinos in Riverside and San Diego counties. The tribes are the Pechanga Band of Luiseno Indians, the Morongo Band of Mission Indians, the Sycuan Band of the Kumeyaay Nation and the Agua Caliente Band of Cahuilla Indians.

The deals require the tribes to pay the state up to 25% of the profits from the additional machines, more than what they pay for machines authorized by preceding compacts. The old compacts will remain in force if voters nullify the new ones.

Fancher’s campaign against the tribal deals has been joined by Unite HERE, a union that says the compacts make it hard to organize casino workers, and the United Auburn and Pala tribes, which compete with the four other tribes for casino customers.

With the tribes’ campaign having raised about $56 million to the opponents’ roughly $15 million, Fancher has ordered his development experts to begin the paperwork needed to demolish the nearly 70-year-old racetrack and replace it with mixed-use development, according to Gerard McCallum, an executive with Hollywood Park Land Co.

“The only way it can be avoided is if the state would create a program where he could have slot machines,” said Inglewood Mayor Roosevelt Dorn. He “has told me that.”

Fancher declined to be interviewed. But Joe Lang, a consultant and lobbyist for Fancher, stopped short of saying the bulldozers will start if voters vote to uphold the compacts. But that would be a “serious blow” to Hollywood Park’s ability to draw bettors, he said.

The compacts bar other gambling within a specified radius of each tribe’s operations. And without the revenue that slot machines or other games can bring, Lang said, California tracks will have smaller purses than those offered in other states that do allow slots, attracting smaller fields of horses and reducing the appeal of the races.

“These compacts, if they go into effect, will further impede our ability to compete with other states by limiting the options we have for boosting our purses,” Lang said. “Clearly this will create another barrier for all tracks, including Hollywood Park, and must be seriously considered as we plan for the future.”

Dorn and other local officials said they would welcome the proposed mixed-use development, even as they would be saddened by the loss of a track with a legendary history.

Hollywood Park, which Bay Meadows Land Co. bought in 2005 for $260 million, opened in June 1938. It was operated by the Hollywood Turf Club, chaired by Warner Bros. executive Jack L. Warner, and had celebrity shareholders, including Al Jolson, Walt Disney, Bing Crosby and Joan Blondell. But attendance has plummeted since the track’s heyday.

In 2004, horse tracks and card clubs spent $20 million to support a ballot measure that would have allowed slot machines at race tracks and some card rooms if the tribes did not meet certain requirements. Voters rejected the measure.

In 2006, California’s horse racing industry unsuccessfully pushed legislation that would have authorized them to have nearly 13,000 new video gambling machines that re-run historic horse races.

If Fancher can defeat the new compacts, his hope is that it might force the tribes or the state to discuss sharing the new slot machine revenue or other gambling proceeds with racetracks, his representatives said.

Some tracks, though not Hollywood Park or Bay Meadows, have had “preliminary discussions” with tribes about possible business deals that would help the racing industry, said Nancy Conrad, a spokeswoman for the Agua Caliente tribe. She said it was unlikely the tribes would agree to share revenue from the new slots without receiving something in exchange.

Cooperative financial agreements between tribes and horse tracks would be preferable to battles at the ballot, said California Horse Racing Board member Jerome Moss. An owner and breeder of thoroughbreds, Moss predicted that the campaign to defeat the new compacts would further alienate tribes

“I’m shocked by it,” Moss said of Fancher’s campaign, “because what they are doing doesn’t benefit the horse industry at all.”

Roger Salazar, a spokesman for the four tribes, was more critical.

“It’s clear that what we have here is a disgruntled racetrack and Las Vegas casino owner trying to undercut agreements that will bring the people of California billions in revenue over the next two decades simply because he can’t get his piece of the pie,” Salazar said. The ‘No’ side simply wants to “protect their own pocketbooks,” he said.

On Monday, opponents of the compacts issued an analysis saying the more than $9 billion estimated to go to the state from the agreements may be overstated by two-thirds. The tribes’ supporters said the deals could bring the state $10.2 billion during their 23-year span.

Fancher, whose investment funds also own the Sahara Hotel and Casino in Las Vegas, was politically active long before his latest campaign. He and his companies have contributed $11.2 million dollars to political candidates in the four years since he pushed the last ballot measure. And he received a $177-million investment from California’s public pension fund in properties including Hollywood Park.

He has also bankrolled lawsuits, including appeals, in an effort to block other Indian gambling deals.

In 2006, during a dispute over whether a prized weekend of racing would be granted to Hollywood Park or rival Santa Anita, Fancher bragged to the California Horse Racing Board that he had been building clout in the state Legislature. He said legislative leaders had contacted him with concern about losing key seats in the 2006 election.

“They needed help financially with these races,” Fancher said. “We stepped up, we wrote the checks.”

Last year, he prevailed in a dispute with the racing board over its refusal to give him a two-year extension on a requirement that synthetic turf be installed at Bay Meadows to reduce injuries to horses. He eventually won a one-year extension after a state Senate committee briefly stripped the board of its budget.

Pechanga representative Jacob Mejia said Fancher is mistaken if he thinks he can force the tribes to cave to his demands.

“He is absolutely overplaying his hand,” Mejia said.

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