ADWs will Argue for Oregon Licenses

ADWs will Argue for Oregon Licenses
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Two advance deposit wagering companies operating through the hub system in Oregon recently had their annual license renewals tabled by the state's racing commission, but will be able to rectify the situation at an upcoming July 17 meeting.

Youbet.com, which has been licensed in Oregon since 2001, and Amwest Entertainment, which received a conditional license in March, each failed to receive a majority vote from commissioners during the June 19 meeting where their application renewals were considered.

ORC executive director Randy Evers said that circumstances played a role in each of the decisions, as only four of five commissioners were present to vote for part of the meeting, resulting in 2-2 deadlocks.

“Youbet.com needs to work out a source-market agreement with Portland Meadows, and it’s my understanding they are both working on that,” Evers said, noting state law requirements for hub licensing.

Officials with Youbet.com did not respond to a query from The Blood-Horse, and Portland Meadows general manager Will Alempijevic declined to comment, citing ongoing negotiations. Youbet.com continues to operate under a conditional licensing agreement, pending the July meeting.

Amwest Entertainment, which is preparing to shortly launch its ADW operation, raised a different concern to commissioners when the subject of cash rebates was discussed in relation to the Kentucky-based company. Rebates of some kind are offered by many ADWs, including player-reward points that can be redeemed for merchandise. But some outlets, including the entity proposed by Amwest’s business model, offer cash rebates, most typically as a percentage of total money wagered by a bettor.

Evers said some of the commissioners new to the ORC board have concerns about cash rebates, which are also offered by various off-shore outlets, including some that don’t feed wagers back into pari-mutuel pools.

Amwest Entertainment president Nelson Clemmens told commissioners the company was offering cash rebates in an effort to attract players now utilizing off-shore accounts.

“This goes to the very core of why I first established Amwest: to establish an onshore rather than off-shore that would also benefit the horsemen,” said Clemmens in an interview with The Blood-Horse. “I feel rebates will provide growth for the industry, and put us on a more competitive level, if it is managed and monitored properly. We trust in July we will receive our approval.”

The ORC in 2005 approved a license for a cash rebate shop, International Racing Group, which was closed down by parent company Youbet.com earlier this year after the fallout from an ongoing federal investigation. Evers, who didn’t join the ORC until 2007, said he believes the IRG approval was a test case for the commission, whose overall board makeup has since changed.

“When IRG came in, my understanding is that (the commissioners) were fully aware they were a rebate shop: let IRG in, let’s see how it goes, and then revisit the situation,” he said. “Since then, we have had a lot of changes, including the whole blowup with IRG.”

If Youbet.com and Amwest Entertainment are unsuccessful in obtaining approval at the July meeting, each company would receive a notice of denial from the ORC, and would have the right to appeal the decision to an Oregon administrative court.

Through the first quarter of the year, Youbet.com since 2001 has handled more than $1.5 billion in wagers through the Oregon hub, according to ORC data. The state reaps a quarter-cent from each dollar processed through the state. Counting Youbet.com and Amwest Entertainment, Evers said there are nine ADWs currently licensed with the state, including TVG, XpressBet.com and the parent entity of Twinspires.com, Churchill Downs Technology Initiatives Co.

The latter company, which is owned by Churchill Downs Inc., had one of three annual hub licenses approved at the June meeting. The other two were approved for The Racing Channel, which has been licensed in Oregon since 2001, and Racing 2 Day, which is scheduled to launch sometime this year.

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