Hub Plan Delayed; Seach for Investors Continues
Updated: Monday, July 19, 2004 3:35 PM
Posted: Monday, July 19, 2004 3:32 PM
Stevenson and Associates is in the process of lining up potential investors for SimulTech, a company formed to operate an offshore wagering hub that would accept bets on United States racing from foreign countries.
Stevenson and Associates, a simulcast and wagering consultant for industry participants including racetracks and horsemen's groups, said in February the hub would be operational by the spring.
"They've sent out private placement offerings to about 10 possible investors," said Laura D'Angelo, an attorney for Stevenson and Associates. "They are in various stages of discussing investment (in SimulTech) with individuals and companies. They have a minimum amount of capital they'd like to hit."
A location for the hub hasn't been selected, she said.
One of Stevenson and Associates' clients is the National Horsemen's Benevolent and Protective Association, which endorsed the hub plan during its 2004 winter convention in New Orleans. It formed a committee to study the issue and will discuss the matter during its summer convention in July 21-25 in Portland, Ore.
"Right now, it's in the negotiating process," said Remi Bellocq, executive director of the National HBPA. "The ball is somewhat in (Stevenson and Associates') court. What's taking time is they're getting set up as a company. It's a good idea. (The delay) isn't an indication we've lost interest."
The hub would be designed to develop simulcast revenue from the Caribbean, Central America, South America, and perhaps the South Pacific. The National HBPA has said it believes tens of millions of dollars in revenue is falling through the cracks because of unregulated simulcasting and signal piracy.
The hub calls for separate pools on U.S. racing. Currently, there is a 30% withholding tax on foreign wagers in merged U.S. pools, but the National Thoroughbred Racing Association is making headway in lobbying Congress to eliminate the tax. The pari-mutuel industry generally advocates common pools to maximize handle and return to bettors.
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