Hollywood's ADW Dispute Unresolved
by Jack Shinar
Date Posted: 10/30/2008 9:27:08 PM
Last Updated: 11/1/2008 1:02:52 PM

Out-of-state account wagering bettors remained locked out of Hollywood Park races as a contract dispute between the Thoroughbred Owners of California and the four advance deposit wagering companies showed no sign of resolution Oct. 30, the second day of the fall meet.

Richard Shapiro, chairman of the California Horse Racing Board, said discussions are in progress, but he could not venture a guess as to when the stalemate might be ended.

"I have been talking to everyone and there have been meetings back and forth," Shapiro said. "Hopefully, we will get to some resolution as soon as possible. There is nothing on the table."

The TOC has an agreement with Hollywood Park for in-state wagering on ADW platforms. But many bettors outside the state do not have an Internet or phone option as all four licensed account wagering providers -- TVG, Twinspires.com, XpressBet and Youbet.com -- are prevented from taking action.

Since these are private agreements, the CHRB cannot compel the differing sides to settle, according to Shapiro.

The TOC, which represents the state's horsemen in purse negotiations and controls the interstate signal by federal law, is demanding a bigger share of the ADW takeout from the companies. In response to an anticipated drop in revenue, Hollywood Park announced Oct. 29 that a 6.25% decrease in purses for overnight races for the 40-day stand would go into effect Nov. 2.

Drew Couto, president of the TOC, did not return a phone call seeking an update on the situation.

John Hindman, general counsel for TVG, the largest of the four ADW companies, defended TVG's non-stop ad campaign aimed at forcing the TOC to back off its position. TVG owns the television rights to Hollywood and has continued to air the track's races during the dispute.

Hindman said that TVG gave TOC exactly what it wanted when it ended its exclusivity agreement with Hollywood Park one year ago to begin an experiment in allowing all licensed ADWs to accept betting on all tracks in the state.

"All we're trying to do is move forward under the same scenario that they said was such a tremendous success" one year ago, he said.

Hindman also took exception to comments from Couto accusing TVG of misleading its customers with an ad campaign designed to pressure the TOC to back off its position. He contended that TVG is returning 67% of its share of the takeout to the racing industry in the form of purses and track commissions.

During the spring/summer meet at Hollywood Park, that amounted to $5 million of the nearly $7.5 million TVG received, Hindman said. By comparison, the TOC pricing model, as suggested by the national Thoroughbred Horsmen's Group, would require only a 60% return, he said.

"By simple mathematics, that means Hollywood Park would have received $500,000 less during the spring/summer meet at Hollywood Park had the contract TOC is proposing been in effect," Hindman said.

"Unfortunately, because of the TOC's action, there is nowhere for our (out-of-state) customers to go," he added. "We deeply regret it, but there's nothing we can do."

Hollywood Park president Jack Liebau, who in an Oct. 29 statement said such signal curtailment would be "harmful to everyone in the industry," told The Blood-Horse Oct. 30 that the the track's ADW-related handle had been cut in half.

"I'm hopeful, but not overly optimisitic," he said of a potential solution to the issues. "But I can tell you one thing from the calls I have been getting, the fans are mad. What I am afraid of is all of these bettors outside of California are going to start betting other tracks."

Liebau, who also serves as chairman of Youbet, referenced an announcement on the Web site of XpressBet that asked its customers to try other tracks. "Don’t waste your time searching the Internet for another legal advance deposit wagering company to play those (California) tracks. They don’t have them either," the announcement said. "Why not try your handicapping hand at a place like Hawthorne or Woodbine or Charles Town. You might find out you like it better than anything in California."

In addition to the TVG, Twinspires.com, XpressBet and Youbet, certain other national domestic ADWs are prevented from taking the Hollywood signal. But most regional ADWs have the Hollywood signal, such as the New York Off-Track Betting Corp., as do many off-shore wagering outlets, including rebate shops. Those also have access to other tracks curtailed by THG-affiliated negotiations, including Calder Race Course and Churchill Downs, among others.

(Ryan Conley contributed to this article)



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