Colonial Downs Signal Blocked to Outlets
by Ryan Conley
Date Posted: 6/3/2008 12:01:07 PM
Last Updated: 6/4/2008 7:58:47 PM

The Colonial Downs simulcast signal for the upcoming summer meet is being withheld from several wagering outlets.
Photo: Coady Photography

The Colonial Downs signal will be barred to at least three wagering outlets for its upcoming live meet. The Virginia racetrack joins the list of tracks whose betting options have been curtailed by disputes with horsemen's groups over revenue sharing.

The Virginia Horsemen’s Benevolent and Protective Association has withheld its consent for the Colonial Downs signal to go to advance deposit wagering outlets TwinSpires.com and XpressBet.com, as well as to Calder Race Course, which is battling with Florida horsemen over a variety of issues.

The 45-day live meet at Colonial Downs is scheduled to begin June 9 and runs through Aug. 6. Among the ADWs that have the track’s signal are national entities TVG, Youbet.com, and Premier Turf Club, as well as other regional-type outlets.

A leader of the Virginia HBPA said the Colonial Downs situation involves a different set of circumstances compared with other signal negotiations, which mostly involve debates over revenue gleaned from ADW’s online and telephone wagering. In addition to Colonial Downs and Calder, tracks currently under restriction for signal distribution of some kind include Churchill Downs, Lone Star Park, Louisiana Downs, Presque Isle Downs & Casino, River Downs, and Thistledown.

“Virginia is in a somewhat unique situation,” said Frank Petramalo Jr., executive director of the Virginia HBPA. “It is one of the few states that have in place account wagering provisions in its state regulations. One of the keys in those regulations is that it defines as a source-market area the entire state of Virginia.”

Source-market fees, which are targeted to certain residents of the state where the track is based, are in addition to the traditional host fees paid by all outlets taking the signal. It is believed TrackNet Media Group, which represents TwinSpires and XpressBet, traditionally offers a source-market fee area defined as about a 25-mile radius around a racetrack, but has included the entire state of Virginia in past agreements.

An official with TrackNet Media, which is the joint content venture of Churchill Downs Inc. and Magna Entertainment Corp., said he was just recently informed of the signal blockage. TrackNet Media president Scott Daruty claims agreements were signed earlier this year with Colonial Downs and Virginia horsemen regarding source market fees.

"Our communication has been with the Colonial Downs racetrack management," Daruty said. "So I don’t fully understand what the Virginaia HBPA’s issue is."

CDI and affiliates have filed an antitrust lawsuit in reaction to the signal dispute with Kentucky and Florida horsemen, and have enacted double-digit purse cuts at Churchill Downs and Calder. Petralmalo is named in the lawsuit, which includes as defendants the Thoroughbred Horsemen’s Group, which is comprised of about 18 horsemen’s groups across the nation, including the Virginia HBPA.

The THG, of which Petramalo is secretary and general counsel, is representing many horsemen’s groups in negotiations over ADW signals with tracks, though not the Virginia HBPA. Many THG-affiliated groups are seeking a one-third sharing model of takeout revenue.

Petramalo said the lawsuit had some bearing on the withholding of consent. "Remember, Twinspires has picked a fight with us, and saw fit to file a lawsuit against us," he said, emphasizing the Virginia HBPA's affiliation with THG . "Churchill instead of talking decided to run off to court, which is their right.

“From our standpoint, the economic package that the Virginia HBPA has with TVG and Youbet closely approximates the proposals that THG has made to TrackNet,” continued Petramalo, who declined to reveal terms of the agreements.

It is believed Youbet.com would have also been excluded from the signal unless it agreed to pay a host fee of at least 5%. Without confirming that figure, Petramalo said an agreement was reached with Youbet.com in the last day or so.

Joining the actions of several other tracks, the Colonial Downs simulcast signal to Calder has been blocked because Florida horsemen have not been able to reach an agreement with CDI on purses. The Calder dispute also includes debates on revenue sharing for ADWs and potential future slot machine installation at the Florida track.

“Our basic principle is that we don’t consent to signals to tracks that don’t have a purse contract with horsemen’s organization,” Petramalo said.

Officials with Colonial Downs did not immediately respond to a request for comment.



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