California Approves

22 February 2002

Things are starting to look brighter for The live Internet race wagering service, which has struggled since its inception to turn a profit, got the long awaited boost it needed yesterday when the California Horse Racing Board made it the third officially licensed provider of the newly legalized Advance Deposit Wagering (ADW) system in California., which joins already licensed operators TVG Network and Magna Entertainment Corp., could end up being the early winner for the account-wagering dollar in the Golden State.

TVG and Magna both hold specific broadcast and betting rights with separate tracks throughout the state; Each has its share of premier tracks. Through a strategic agreement reached last year, is licensed to utilize TVG's patented wagering technology for online and automated telephone applications and utilizes a right to video stream and accept online pari-mutuel wagers on horse racing from virtually all of TVG's exclusive partner racetracks. is also a sub-licensee of Magna and has the rights to all of Magna's racing action in California. Through the two deals, is the only service provider in California that enables bettors to place action at all of their favorite tracks.

With the click of a mouse a user on the system can be switched from the TVG hub to the Magna hub, or visa-versa. The switch is seamless for the user and will be a major selling point as targets one of the sport's biggest states. California residents represent the largest constituent of horse racing enthusiasts and handicappers in the United States, contributing to a substantial portion of the pari-mutuel horse racing market, according to

Ron Luniewski, co-chief executive officer of, said the growth potential for the site's service is a key to the company's business plan.

"Horse racing fans in the California market represent the largest single subset of our industry," he said. "The market in this state for our online pari-mutuel wagering system brings substantial network expansion and revenue growth potential for our company, particularly with our unmatched products and racetrack content.''

The push to get California residents signed up with the system is already underway. Within an hour of getting approval from the CHRB had a banner in the center of its home page encouraging new users. "California, The wait is over!" the promotion read, complete with a quick link button for users to either sign up or start betting for money.

Before getting the license, was able to amass more than 2,500 subscribers from California. Those subscribers were allowed to retrieve information and content from the site, but couldn't place wagers.

With the license will be able to facilitate online and telephone advance-deposit wagering from California residents. (Advance-deposit wagering refers to pari-mutuel wagering whereby an account holder residing within or outside of California establishes a wagering account through a CHRB-approved, licensed betting system.) will use its TotalAccess hub in Oregon to connect bettors with the TVG content and its Pennsylvania hub for Magna tracks.

The company has reason to be optimistic. The CHRB recently reported that, from Jan, 25 through Feb. 18, the Magna and TVG handled $5,155,008 in wagers through the system; $4,142,117 of that was wagered on thoroughbred races. Nearly $3 million of the thoroughbred total was wagered through XpressBet.

The $1,153,543 wagered on thoroughbred races through the TVG system was on thoroughbred races run outside of California. TVG also handled $203,038 in harness wagers and $588,279 in quarter-horse wagers, while XpressBet handled $221,574 in harness wagers.

Executives with XpressBet and TVG also provided reports on the first few weeks of operation. Magna Vice President Edward Hannah, in response to questions from the CHRB about numerous customer complaints, explained that XpressBet has processed 5,115 new accounts, far exceeding expectations, and the system had been "overwhelmed by the success of our ADW operations."

Hannah said XpressBet has doubled its customer-service capabilities by adding hardware and hiring 31 new agents.

The approval of's application was delayed by a month due to procedural issues related to the company's posting of a required bond. A fourth applicant, Call-a-Bet, withdrew its application prior to the meeting Thursday at Cypress City Hall.