MRC: ADWs Face Shutdown in Maryland

By Tom LaMarra and Ryan Conley

A trio of large domestic advance deposit wagering companies is facing a shut-off of operations in Maryland unless a new agreement for revenue sharing is reached, the Maryland Racing Commission said recently.

The MRC, which is the regulatory authority for racing in the state, said in its March 17 commission meeting that TwinSpires.com, XpressBet.com, and Youbet.com have been operating without a revenue-sharing agreement for Laurel Park and Pimlico Race Course since the first of the year, and face a March 31 deadline for reaching a new agreement.

Alan Foreman, general counsel for the Maryland Thoroughbred Horsemen’s Association, said the Maryland THA last fall notified the Maryland Jockey Club it would insist on negotiations with TwinSpires.com, XpressBet.com, and Youbet.com on advance deposit wagering revenue splits. The Maryland Racing Commission, he said, has jurisdiction over ADW providers, and that in absence of a contract with horsemen, an ADW must pay the equivalent of revenue derived from on-track bets.

“It’s a far more onerous takeout,” Foreman said.

Both Laurel and Pimlico are currently owned by Magna Entertainment Corp., which also owns XpressBet and is partners with Churchill Downs Inc. in the content venture TrackNet Media Group. MEC and CDI, which owns TwinSpires, are also partners in HRTV, which has less of a broadcast penetration than rival TVG.

Foreman said Joe De Francis, a former MEC official who ran the Maryland racetracks, told horsemen at the outset the deal with TrackNet Media Group would be a good thing for horsemen and purse revenue. He said the Maryland racing signal isn’t visible on HRTV, and that TrackNet Media is “seeking to increase the costs for horsemen.”

“We’re not prepared to take a (financial) hit here when Magna is part of TrackNet,” Foreman said. “Churchill Downs has no vested interest in Maryland racing, but it’s trying to control our revenue stream.”

When reached for comment, a CDI official stressed the company has had a Maryland agreement in place for two years. CDI and MEC formed TrackNet in March 2007 and have reciprocated agreements between the companies.

“We have a contract in place as required by Maryland statutes, and it has been in place since 2007,” said CDI spokesman Kevin Flanery. “We’ve continued to operate under that agreement since 2007. We’re happy to talk with Maryland horsemen, Maryland tracks, and the Maryland commission … to make sure that we continue to provide good service to the wagering public of Maryland.”

XpressBet president Ron Luniewski said he had no comment on the situation, while attempts to reach officials Youbet weren’t immediately successful.

All parties must agree on ADW fees, Foreman said. The MRC has mandated ADW agreements must be in place by March 31, and it has ordered Youbet.com to pay $1 million in back revenue to Maryland horsemen.

 

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