One of the country’s top advanced deposit wagering providers and a group representing 17 MidAtlantic racetracks remain at odds over terms of a new contract, leading to disruption of simulcast wagering at the tracks and their off-track betting and satellite facilities.
As a result of the dispute between TrackNet Media Group and the MidAtlantic Cooperative, bettors at the 17 tracks are being denied the ability to watch and wager on the Santa Anita meet that began Dec. 26 and the Gulfstream Park meet that starts this weekend -- two tracks that offer the highest level of winter racing.
A joint venture of Churchill Downs Inc. and Magna Entertainment Corp., TrackNet operates as a facilitator for simulcasting and wagering, charging tracks a fee to disseminate their races to other locations.
In a press release dated Dec. 28, the MidAtlantic Cooperative charged that TrackNet Media was proposing unprecedented rate increases that were inconsistent with those charged by similar ADW providers.
Negotiations began in August with submission of TrackNet’s proposed new contract to the cooperative.
“At that time, TrackNet presented its proposal which included an unprecedented increase in host fees – rates higher than paid by other racetracks and simulcast outlets with significantly less volume than the MidAtlantic Cooperative, as well as a limited term and several non-economic conditions that went beyond MidAtlantic’s authority as a purchasing co-op,” the release stated.
The MidAtlantic Cooperative release said it responded to the TrackNet proposal by presenting “a detailed proposal to TrackNet Media that included tiered increases in simulcast rates over a multi-year period, allowing for desired increases while providing longer term cost stability for co-op member tracks and avoiding the possibility of further interruptions.”
Scott Daruty, TrackNet’s president, said his company did not receive MidAtlantic Cooperative’s formal written response to its August contract proposal until early December. The counter-offer from the group representing the racetracks called for a contract length that TrackNet considered well out of the norm for the industry and for fees that were not acceptable to the provider, according to Daruty. He said he didn’t “think it is appropriate to engage in negotiations through the media” but discussed the dispute in response to the track cooperatives’ press release.
Also, except in only a few instances, TrackNet had not raised its rates to the MidAtlantic tracks in five years, Daruty said.
“We made a proposal that in my opinion was well thought out and based on a formula of what other tracks were charging us for their signals,” Daruty said.
He added that the proposed contract took into consideration that the 17 MidAtlantic tracks “are big customers. We made a very fair and appropriate proposal. We told them at the outset these are well thought out numbers. These are our asking rates and there is no room for movement on that. They came back with incremental rate increases for a few tracks in years one through three.”
Daruty said the non-economic issues in the proposed contract involved the ability of the ADW company to have some flexibility in case the status of one or more of the MidAtlantic Cooperative members changed. For example, TrackNet charges a higher rate for customers who are not racetracks, such as racebooks and Indian tribes. Should a customer cease to conduct live racing and become an OTB or simulcast only facility, TrackNet would want to charge the higher rate.
While bettors at the MidAtlantic Cooperative tracks wait for the signals to be restored so they have access to tracks such as Gulfstream Park and Santa Anita, TrackNet and the racetracks’ representative will seek to resolve the dispute.
“The MidAtlantic Cooperative remains committed to working with TrackNet Media to arrive at an agreement that benefits all parties involved and intends to pursue all options available to it,” the release said.
“We are always willing to talk,” Daruty said.