Santa Anita Betting on a New Game: Card Casinos

Laying down a bet on diversification in the fast-growing gambling business, the owners of the Santa Anita Park racetrack on Thursday announced the purchase of an option to buy a half-interest in a card club in Bell.

Santa Anita Cos.’ five-year option to buy the stake in the 45-table Bell Jackpot Casino comes as executives have taken steps to turn the low-key real estate and horse racing firm into an aggressive gambling and entertainment concern.

The deal hinges on the repeal of state law that prohibits publicly held firms such as Santa Anita from owning and operating card clubs.

The deal “is entirely consistent with our strategic program of maximizing the value of the companies’ assets by developing Santa Anita into a premier gaming and entertainment company with world-class thoroughbred horse racing at its core,” Chairman Stephen F. Keller said.

Last year, the firm unveiled a proposal to build a $100-million entertainment complex, including a 25-screen movie theater, on the track’s parking lot in Arcadia.

Santa Anita, one of horse racing’s most venerable tracks, and other racing venues across the nation have been left in the dust as other forms of gambling have exploded. The tracks, once the only legal form of gambling in most states, must now compete against a proliferation of Las Vegas-style casinos, card clubs, riverboat casinos and gambling on Native American reservations.

While the casinos have attracted a youthful market, horse tracks have a shrinking, aging clientele, according to William N. Thompson, a public administration professor at the University of Nevada at Las Vegas. The down time between races and the intricacies of playing the horses often turn off younger gamblers accustomed to the nonstop play and relative ease of table games and slot machines.

After long disdaining card clubs and casino gambling, track owners now want a piece of the action. Hollywood Park was a pioneer, leasing land next to its track for construction of the Hollywood Park Casino, a card club that opened last July. The lease arrangement does not violate the state’s ban on public-company ownership of card clubs.

A bill rescinding that prohibition was narrowly defeated in the Legislature last year but is expected to resurface, observers say.

The Bell Jackpot Casino reopened last week; its previous owner, who operated it as the Regency Club, left the country in 1992 after failing to apply for a state card club license.

Orange County real estate developer James Knapp and his son, Gregory, who have leased the property to other operators for 15 years, are now running the casino. The Knapps are part of the Brookhollow Group, an old investment and development organization.

Brian Fleming, executive vice president of Santa Anita Cos., said the firm has no plans to open a card club next to its racetrack. Instead, Fleming said, the company sees major opportunities in joint promotions for the card club and racetrack.

Further, he said, “we will continue to grow in California and continue to look at other opportunities.”