Wagering Mess Leads to River Purse Cut
by Tom LaMarra
Date Posted: 5/2/2008 11:58:26 AM
Last Updated: 5/3/2008 8:13:02 PM

River Downs
Photo: File Photo

Declines in on-track wagering, a dispute with the New York Racing Association over signal fees, and horsemen’s refusal to allow six major advance deposit wagering outlets to take its signal has led River Downs to cut purses 15%-18% effective May 8.

River Downs in Ohio is one of a growing number of racetracks that have cut purses because of a dispute between tracks, ADW providers, and horsemen over revenue splits for account wagering. Calder Race Course cut purses 30%, and Lone Star Park 10%.

River Downs also is a member of the Southern Racing Cooperative, a group of 20 tracks that isn’t importing the Belmont Park signal because it can’t strike a deal with NYRA. Thus, River Downs isn’t taking the popular Belmont signal.

The minimum purse at River Downs, which opened for live racing April 11, will drop from $5,000 to $4,400. Maiden special weight races will go for $7,600, down from $9,000. Lower purses and competition from Indiana Downs, which opened its Thoroughbred meet April 25, probably won’t help field size at the Cincinnati-area track.

“I hope something gets worked out,” River Downs general manager Jack Hanessian said May 2. “I hate doing this, but if we’re going to lose purse revenue, what am I supposed to do? It can get away from you.”

The Ohio Horsemen’s Benevolent and Protective Association yanked its approval for River Downs to send its signal to ADW providers BetPad, The Racing Channel, TVG, TwinSpires.com, Youbet.com, and XpressBet effective May 1. Hanessian said it’s too soon to predict the impact the move will have on River Downs handle.

“I have no idea,” Hanessian said. “We’ll have to wait and see.”

Dave Basler, executive director of the Ohio HBPA, said May 2 horsemen opposed a plan by River Downs to cut purses 40%. Basler said he ran numbers that show not having the River Downs signal available to the six ADWs would impact purses only 2%.

The primary issue, Basler said, is that on-track handle is down 20% from last year. Also, the Belmont simulcast traditionally generates about $3,100 a day for purses.

“Clearly, 40% isn’t justified,” Basler said, “but I believe (a 15% purse cut) is justified.”

Basler noted Turfway Park, located in Kentucky about 20 minutes from River Downs, is offering the Belmont signal. Thus, River Downs may be losing patrons who are betting other signals as well at Turfway.

“I understand it’s their decision,” Basler said of the tracks in the Southern Racing Cooperative. “But it’s not the right decision to make for the tracks and horsemen. No matter what rate they pay to NYRA, we get the same cut.”

Hanessian noted the May 1 handle numbers may not offer a true indication because roughly 40 racetracks—the Mid-Atlantic Cooperative also has no deal with NYRA—aren’t offering Belmont simulcasts. River Downs, he acknowledged, is picking up some handle because of that.

Earlier, the Ohio HBPA pulled the River Downs signal from Calder, where the Florida HBPA is in negotiations with track owner Churchill Downs Inc. on a new contract. Horsemen’s groups have the right of consent under the Interstate Horseracing Act of 1978.

“I don’t understand why we’re persecuting Ohio tracks and horsemen because of the Florida horsemen,” Hanessian said.

The horsemen’s groups are being represented in negotiations by the Thoroughbred Horsemen’s Group, which was formed late last year to improve the economic model for pari-mutuel wagering. Companies such as CDI have said they are making progress in the move to generate more pari-mutuel revenue for tracks and horsemen, but horsemen advocate a formula whereby tracks, horsemen, and ADWs would split revenue evenly.

On a positive note, Thistledown near Cleveland, Ohio, opened May 1 with solid-sized fields. The track’s 2008 meet was in jeopardy earlier this year when the Ohio HBPA and Thistledown owner Magna Entertainment Corp. couldn’t come to an agreement on racing dates for this year.



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