Off Track Betting News - July 9th, 2008

[Shame About Ray]

Betus Offtrack Betting - Horsemen, 2 Tracks, War Isn’t Over

Two tracks ended their fight with horsemen’s groups assuring Calder an increase in simulcast revenue and allowing Ellis Park to race after it threatened to close.



Obviously, the tracks gave in because they faced financial disaster. But the war between both sides is far from over.

First, Ellis Park was on the verge of becoming the first casualty in its dispute when track owner Ron Geary announced the track wouldn’t open the 44-day meeting on July 4 because he couldn’t afford to sign an advanced-deposit wagering (ADW) contract with the Kentucky Horsemen’s Benevolent and Protective Association.

The consequences: no racing signal allowed to tracks outside Kentucky and vice versa.

Citing a lack of available revenues, Geary said he lost $2.7 million operating Ellis last year. Then the KHBPA offered him financial assistance, but wouldn’t give in on its ADW position.

On Saturday a deal was announced: Geary agreed to pay nearly one-third of the blended takeout, about 19 ½ percent, toward purses. That amounts to about 3 ½ percent more than last year. The meet opens Friday.

Advantage KHBPA.

Then on Monday, Florida’s HBPA and Churchill Downs Inc. reached an agreement of their own concerning Calder Race Course.

The FHBPA wanted contracts signed for this year’s purses and for future slot machine revenues before the South Florida track could send its signal out of state or receive any from tracks outside the Sunshine State.

“The FHBPA leadership has insisted on signing a purse contract only if we sign a slots contract first,” Michele Blanco, Calder’s director of communications, told me.

“Because Calder and (our parent company) Churchill Downs Inc. have decided to not implement slots in 2008, we feel it’s premature to sign a slots contract,” she said. “Without the purse contract, the horsemen have the right to withhold sending our racing signal out of state. Currently, the only out-of-state entity receiving the Calder signal is the New York City OTB (off-track betting outlets).”

The dispute cost Calder dearly since the meeting opened April 21. For the first 37 days of racing, the average daily handle from all sources was down 72 percent, according to the Jockey Club Information Systems.

Average daily handle through June 22 was $769,000 compared to $2.7 million for the same period last year.

Under terms of the agreement that begins Thursday, Florida horsemen are guaranteed $14.375 million for purses in the first three full years of the slots operation and 6.75 percent of revenue for the remaining 10 years, Calder announced.

The dispute forced Calder to reduce purses for all stakes that will be raised down the road. However, the four graded Summit of Speed events were slashed $300,000 to $1.3 million. The Summit, scheduled for Saturday, is one of the best betting days.

The all-sources handle for the card exceeded $9 million four of the last five years, including a record $10.8 million in ’04. An assumed blended takeout of 21 percent that year left about $2.3 million for horsemen and the track to divide.

The deal, however, doesn’t resolve the quarrel over exporting the signal to ADW sites.

Advantage FHBPA

Calder remains one of nine tracks that have their signals blocked by affiliate HPBA organizations, mostly for not signing ADW contracts.

The battle over ADWs stems in part from lack of a long-term strategy on the part of horsemen and the tracks, the Thoroughbred Racing Associations (TRA) of North America said last week.

“…Some horsemen’s groups believe their share (of revenue) can be increased beyond prevailing market rates by forcing tracks to agree to a minimum pricing structure set forth by a new, third party organization,” said Chris Scherf, TRA executive vice president. “Tracks have been unwilling to pursue this approach because of legitimate business and legal concerns.

“Before additional damage is done to the racing industry, horsemen and racetracks must see the difference between short-term gains and long-term strategy to be developed jointly. One side dictating to the other clearly will not work.

“I strongly suggest horsemen’s groups end the strategy currently being employed by some. Instead, it would be in everyone’s best interest for individual horsemen’s groups to evaluate each simulcast agreement on its own merits and not unreasonably withhold consent, while at the same time working with the racetracks for the future improvement of the pari-mutuel business model.”

The Thoroughbred Horsemen’s Group, formed last December, is negotiating ADW contracts for some horsemen’s organizations. The issue has led to reducing purses at tracks in several states.

And since agreements aren’t forever, the war is far from over.

Bet on horses today at Betus Racebook - Click Here!!!