Meeker: Account Wagering Needs Overhaul, Expansion
Expansion of account wagering and improvements to existing platforms are a chief objective of Churchill Downs Inc., whose chief executive officer, Tom Meeker, indicated change is needed to generate more industry revenue and maintain or expand the customer base.In comments made during a March 15 conference call on the company's 2005 financial report, Meeker said exclusive contracts the company's racetracks have with the TV Games Network will begin to expire in March 2007. He offered no specifics on renewal of those contracts but said CDI is considering its options.(CDI tracks whose races are shown exclusively on TVG are Arlington Park, Calder Race Course, Churchill Downs, Ellis Park, Fair Grounds, and Hoosier Park.)"As we look to the future, several objectives are clear," Meeker said. "We must reorganize the business model in this area to ensure horsemen and racetracks obtain their fair share of revenue. Major states such as Florida and Illinois must be encouraged to allow account wagering. And we must begin to operate an account wagering system or systems in a customer-centric manner. Our customers deserve more from the industry, and absent that, may go elsewhere."Meeker also suggested account wagering platforms must have a "rebate model" to compete with offshore wagering concerns that cater to high-volume customers.Recently, industry officials have said the account wagering model in the U.S. needs major revisions because tracks and horsemen (through purses) are receiving too small a share of revenue--or none at all in the case of illegal operators. They said the pari-mutuel industry is relying too much on third-party operators.CDI was one of the founding content providers for TVG, which sprung from the Louisville-based ODS in-home account wagering service in the mid-1990s. TVG currently has exclusive rights to CDI content for production and account wagering purposes; expiration of those contracts will span about 13 months beginning a year from now."In terms of where we might be going, I can't speak specifically, but we are looking at a myriad of opportunities available to us," Meeker said. "We need a cohesive and customer-friendly account wagering platform."Problems with the current setup, Meeker said, include horseplayers having to have multiple accounts to play different tracks. "Why do we provide barriers to customers in terms of wagering on our events?" he said.Because of exclusive deals, other account wagering providers such as AmericaTAB and Youbet.com pay TVG for the rights to offer wagering on exclusive tracks such as those owned by CDI. Magna Entertainment Corp., which operates XpressBet, also charges a fee for those services to take the product from tracks it owns. Meanwhile, TVG and MEC have been unable to strike a deal to share content.Meeker said CDI would employ "baseline criteria" to develop a strategy for account wagering in the U.S., and would continue to work with partners on developing markets overseas. "U.S. racing must concentrate its efforts on international deployment (of account wagering) as a long-term growth strategy," he said.In a related area, Meeker said progress has been made on reorganization of tote systems in the U.S., and that later this year the industry could be processing wagers in a faster, more efficient, and more secure manner. CDI is among the major racetrack companies that joined forces to prepare a request for proposal that went out to various tote providers. They hope for a more integrated system that allows for interface and customer development."The transactional part of our business needs to be fixed," Meeker said. "We're not processing bets as quickly as we should."
by Tom LaMarra
Date Posted: 3/15/2006 10:16:10 AM
Last Updated: 3/16/2006 1:06:30 PM
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