Horsemen Establish Wagering Operation in Nevada
by Tom LaMarra
Date Posted: 6/9/2006 11:45:28 AM
Last Updated: 6/11/2006 11:25:53 AM

The International Horsemen's Wagering Assurance Group, which intends to recapture pari-mutuel revenue and funnel it to horsemen, jockeys, and racetracks, announced it has officially opened a secondary pari-mutuel operation with a hub in Las Vegas and call center in Curacao.

The group, formed by individuals affiliated with the National Horsemen's Benevolent and Protective Association and Minnesota HBPA, said June 9 it had signed a contract with Las Vegas Dissemination Co. to serve as its telephone wagering hub. (LVDC falls under the regulation of the Nevada Gaming Control Board). Wagering through the system will begin when IHWAG has in place more contracts with racetracks for product.

"Technically, we're operational right now," said Tom Metzen Jr., a Minnesota insurance executive who has assisted the National HBPA. "We're in the process of accumulating signal contracts. We want to offer a full plate of content before we start."

IHWAG officials said having the operation fall under regulation of the Nevada Gaming Control Board "is a positive in an industry looking for transparency, integrity, and due diligence." The call center in Curacao has the "full knowledge of the governmental bodies there," officials said.

The group, formed by former National HBPA president John Roark, Metzen, and Tom Metzen Sr., president of the Minnesota HBPA, said it's receiving contracts from racetracks on a daily basis, and that its rates for signals "will mirror the best in the industry."

Metzen said the idea is to operate on a tight margin so more revenue is returned to the horse industry from wagering. It remains to be seen whether the new SPMO would offer rebates to high-volume players.

"We're working on a razor-thin margin and turning funds over to the industry," Metzen said, "but we're going to make a buck, because there are a lot of expenses invested in this project. But the lion's share of takeout should go to the source."

IHWAG has support from the National HBPA, but the full board of the organization is expected to consider an official endorsement of the SPMO at its summer convention in July in Minnesota. Metzen said IHWAG hopes to get HBPA affiliates to join the effort.

"We're working with state affiliates to become partners," Metzen said. "Our goal is to collectively work hand-in-hand with affiliates and racetracks in getting signal fees up across the board. If a takeout rate is 23%, and the signal fee is 3% or 4%, that's insane."

Metzen also said IHWAG is talking with representatives of legal offshore bookmaking operations to bring that handle into United States pools. "From all indications, the bookmakers seem willing to do it," he said.

IHWAG has no exclusive contracts, which means one company may provide the phone-wagering component and another the soon-to-be-introduced Internet component, for example. IHWAG also hired a private investigations firm to do background checks on individuals that will use the system.

Metzen said IHWAG officials plan to meet with the Jockeys' Guild to see how some revenue from SPMO wagering could be used for programs for jockeys.

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