The Thoroughbred Owners of California June 1 tabled action on exchange wagering for one year and endorsed a deal proposed by The Stronach Group, leading to a strong response from Betfair TVG, the organization that hoped to launch exchange betting this summer.
The TOC, whose approval is necessary for exchange wagering to begin for Thoroughbred racing in California, indicated there is no consensus on exchange wagering. It also acknowledged the proposal by The Stronach Group to have HRTV and TVG share California racing content has not been endorsed by TVG or the tracks for which it has exclusive agreements—Betfair Hollywood Park and Del Mar.
“While we are pleased to have accomplished this long-sought-after goal (of sharing content), we will continue to seek alternative revenue sources and have not slammed the door closed on the concept of exchange wagering,” TOC president Lou Raffetto Jr. said. “We are simply putting this contentious issue on the back burner until we can analyze it further and, hopefully, build a consensus within the industry.”
In a lengthy statement, TVG called it a “bleak day” for California racing and took jabs at The Stronach Group, which owns Santa Anita Park and Golden Gate Fields. TVG doesn’t have the rights to broadcast those races.
“In return for an empty promise from a track ownership group known for broken promises, the TOC has decided to hold back on globally proven exchange wagering innovation that the California racing industry so desperately needs,” TVG said. “This decision has cost the TOC’s own horsemen and women, Del Mar, Hollywood Park, and the California racing fairs over $2.9 million in guaranteed direct revenue in 2012 alone.”
Betfair TVG had offered the TOC and racetracks an up-front payment equal to 10% of 2011 overnight purses, or $3 million, that would be paid up front. The offer was for less than five months of 2012, with no future commitments.
“This decision is a setback to members of organized labor in the state who were looking forward to taking up the new jobs exchange wagering would create,” TVG said. “It is also a rebuke to legislators in Sacramento and the members of the California Horse Racing Board who worked hard to give California racing the opportunity to lead the way in wagering innovation.
“We will work with racing interests in other states and for other breeds within California to implement exchange wagering to help their businesses grow while the TOC further considers its position on exchange wagering, the statute for which has been on the books in California already for two years.”
The Quarter Horse and Standardbred horsemen’s groups in California could pursue exchange wagering. Outside of California, only New Jersey has the legislative framework in place to move forward with the form of wagering that became popular in Great Britain, where Betfair is based.
The Stronach Group apparently has offered a “reciprocal agreement” with TVG, but the Betfair-owned advance deposit wagering provider and broadcaster indicated it had no knowledge of the proposal. Under the deal, HRTV and TVG would both show all Thoroughbred racing from California tracks.
The TOC offered no explanation as to any financial concessions that would be required by the two networks.
“The inability to showcase all race meets in California on both TVG and HRTV has long been an area of contention for the California Horse Racing Board,” TOC chairman Mike Pegram said. “Moreover, the lack of uniform distribution of the California product both in the Golden State and nationwide has been a primary concern for the TOC as it seeks to increase revenue for purses, especially in Northern California, where the horsemen race for considerably less money than in the South.
“Hopefully expanded distribution of the Golden Gate Fields races on TVG would be a shot in the arm for those racing in the North.”
“We are bemused by the TOC’s release announcing its ‘approval’ to a proposal from The Stronach Group for which TVG, Del Mar, and Hollywood Park must be party,” TVG said in response. “Astonishingly, none of TVG, Del Mar, or Hollywood Park had any prior knowledge of and have not indicated any interest in, the television rights proposal.”
TVG said ADW would benefit if Santa Anita and Golden Gate Fields racing was shown on its network, but “from what little we know about the way this deal would be structured, it benefits no one except tracks owned by The Stronach Group, their XpressBet.com ADW provider, and their HRTV network. The current complex pricing structure of TV rights means millions of dollars in wagering revenue would flow to The Stronach Group if this agreement were adopted, and it delivers nothing for Del Mar, Hollywood Park, or TVG.”
