TOC: Some NTRA Money Should Go to Purses
by Eric Mitchell
Date Posted: 2/12/2002 9:42:15 AM

The Thoroughbred Owners of California is using a deal with Magna Entertainment as leverage in an attempt to garner a greater share of pari-mutuel takeout from account wagers made through the TV Games Network.

TOC president John Van de Kamp said he believes at least half the money TVG would take from California wagers and pay to the National Thoroughbred Racing Association should instead go toward California purses. On a blended takeout of 20%, TVG gives 0.5% to the racing industry's national organization.

"We already give $1.8 million annually to the NTRA," Van de Kamp said. "This is our money. That half a percent is reducing the share that goes to horsemen."

Greg Avioli, NTRA deputy commissioner and chief operating officer, said he had not talked with TOC officials and is not sure whether the NTRA's contract with TVG and its contract with TOC are related issues.

"I have to sit down with John and go through the issues," Avioli said. "We have separate contacts, but we want be sure that TOC is comfortable with the outcome."

As of Feb. 11, TOC did not have a deal pending with either Hollywood Park or Del Mar, two of TVG's exclusive member racetracks in California.

TVG was licensed by the state to conduct account wagering because it has an agreement with the Quarter Horse horsemen's group. The network takes wagers on Los Alamitos Race Course. For the first 12 days of legal advanced deposit wagering, TVG reported handling $598,271 from California account holders, or 48.4% of the total advanced deposit wagering handle of $1,235,588.

TVG president Mark Wilson said he is not concerned Hollywood Park may start its meet April 24 without an agreement with TOC. As for changing the NTRA's share of revenue, Wilson said that is a decision for the NTRA board of directors.

In late January, TOC struck a deal with Magna's XpressBet account wagering service that will contribute almost 22% more than simulcast bets placed by Californians on out-of-state races, and may triple what is now paid on California races carried by other states.

"It certainly protects us against cannibalization," Van de Kamp said. "It has a lot of potential upside--of course it all depends on the handle."

TOC will receive a minimum of 2.9% of host fees and could receive as high as 5.6% of the takeout depending on whether XpressBet pays a territorial fee, which is equivalent to a source-market fee.

XpressBet pays a host fee equal to 5% of the handle, and a territorial fee equal to 7% of the handle if an account holder lives within 25 miles of a racetrack. TOC also has reached an agreement with Youbet.com, an Internet pari-mutuel wagering service, with percentages that "are relatively close to what we have with Magna," Van de Kamp said.

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