'Big Four' Post Mixed Oregon ADW Numbers
by Ryan Conley
Date Posted: 3/18/2009 2:39:09 PM
Last Updated: 3/19/2009 9:10:52 PM
Anne M. Eberhardt
Even though TVG, TwinsSpires.com, and XpressBet.com enjoyed handle growth in 2008, total wagers processed by advance deposit wagering entities through hubs in Oregon decreased for the first time this decade, though the numbers are skewed by actions related to another member of the “Big Four,” Youbet.com.
ADW handle generated through Oregon declined 16.9% to $1,308,416,446 in 2008, according to data collected by the Oregon Racing Commission. ADWs, which primarily focus on wagers made through Internet and telephone platforms, are considered industry-wide as the leading source of handle growth.
Affecting Oregon’s bottom-line numbers was two factors related to Youbet: an apparent decision by the company to process the bulk of its wagers outside of the state in the last half of 2008, and the shuttering of former offshore entity International Racing Group earlier in the year.
Youbet processed about $186 million of its wagers outside of Oregon in the last six months of 2008, based on handle data supplied by the California ADW in its recently-released annual report. Oregon also lost about $231 million in year-over-year handle generated by IRG, which was closed by Youbet in February 2008 amid a federal investigation into its operation.
Combined handle lost by Oregon due to Youbet’s initiatives totaled about $338 million, which would have easily covered the approximate $265-million shortfall the state realized in a year-over-year comparison. Oregon reaps a quarter-cent in tax revenue from every dollar processed through its hubs.
While Youbet’s total handle for 2008 fell about 9.5% to approximately $438,260,000 (excluding IRG data), TVG, TwinSpires.com and XpressBet realized annual increases -- particularly in the case of the latter two, which are affiliated with the TrackNet Media Group consortium of their respective parent companies, Churchill Downs Inc. and Magna Entertainment Corp.
XpressBet saw the biggest percentage growth among the Big Four, with a 16.3% increase to $206,033,757. While touting the company’s customer service and technology feature-functionality, XpressBet president Ron Luniewski called 2008 a “leveling” of the ADW market due to efforts by TrackNet in changing traditional business models.
“(Last year) was probably the most level year in the market,” he said. “Based on the overall growth of the market, which is slowing down, we are very happy.”
An XpressBet analysis pegs 2008 combined handle growth among the Big Four at 2.4%, which followed overall comparable growth of 27.9% in 2005, 14.1% in 2006, and 5.9% in 2007.
“We think the numbers speak for themselves,” Luniewski said.
TVG’s handle increased 5% to $502,997,739, tops among the 10 entities that processed wagers through Oregon hubs in 2008, though the pioneering broadcast ADW realized its second straight quarterly decline at the end of the year. TVG’s 5% drop in the fourth quarter came on the heels of a 6.2% decline realized in the third quarter, yielding the first quarter-over-quarter declines in the company’s history, according to Oregon data.
TwinSpires’s handle was $241,031,076, which represents about 11.9% growth when compared to 2007 data that includes whole-year wagers with AmericaTab, which CDI acquired in mid-2007.
While owned by MEC, XpressBet was not included in the Chap. 11 bankruptcy recently filed by the horse racing company, and is among the assets parent company MI Developments is seeking to acquire in a $195-million bid through a court auction.
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