California’s horse racing industry faces significant challenges in its efforts to introduce Historical Horse Racing (HHR) machines as a new revenue source. A recent opinion by Attorney General Rob Bonta, which declared daily fantasy sports illegal under state law, reinforced tribal sovereignty over gaming and complicated the legalization of HHR machines. Tribal leaders, who hold exclusive rights to slot machine operations under Proposition 1A, strongly oppose any attempts to bypass their gaming exclusivity, making political and legal pathways for HHR legalization increasingly difficult. Industry insiders acknowledge that only one or two of the previously considered legalization routes remain viable, with negotiations ongoing but progress slow and sensitive.

The industry’s decline is marked by shrinking purses, fewer foal crops, and an aging fan base, and while some racetracks have seen modest betting gains, these are largely due to closures elsewhere rather than growth. Despite efforts by a working group of industry leaders, the California Horse Racing Board remains cautious, emphasizing regulatory complexities. Experts and tribal representatives express skepticism about HHR’s ability to save the industry, warning that any deals must be carefully negotiated to avoid undermining tribal gaming rights. With limited legal options and strong tribal opposition, California’s horse racing sector must seek alternative solutions to sustain its future.