CDI Lawsuit Active Despite Agreement

Although deal has been made between CDI and Kentucky horsemen, there are still issues

While a signal deal has been struck between Churchill Downs Inc. and Kentucky horsemen for the Churchill Downs spring racing meet, still unresolved are claims and counter-claims in a federal antitrust lawsuit featuring many of the principal parties.

Churchill Downs Inc. and the Kentucky Horsemen’s Benevolent and Protective Association announced Dec. 31 they had reached an agreement for distribution of the Churchill Downs spring meet to go to various advance deposit wagering companies.

The agreement was a resolution, in part, to the many months of often fractious revenue-sharing negotiations between horsemen and CDI, parties which respectively endured economic challenges during 2008 resulting from significant purse reductions and handle declines.

But still on the table is a federal lawsuit filed in May by CDI and affiliates, a legal action which levels antitrust allegations against various defendants that includes the Thoroughbred Horsemen’s Group, the Kentucky HBPA, and the Kentucky Thoroughbred Association. In one filing, CDI alleges the defendants’ actions are a “price-fixing” conspiracy.

The Kentucky HBPA in July responded with a counterclaim, alleging CDI owes horsemen at least $5 million related to unpaid revenues from the racetrack company’s advance deposit wagering enterprise, and for the “retaliatory” 20% purse cut implemented during the 2008 Churchill Downs spring meet.

A CDI spokesman said Jan. 2 that the lawsuit was still active, despite what he said were offers by the company to settle all differences.

“Churchill Downs offered to either dismiss our claims and have the (Kentucky) HBPA dismiss their claims in order to resolve our disputes with the HBPA, or to keep them both active,” said CDI senior vice president Kevin Flanery. “They have elected to keep them active.”

A call by The Blood-Horse to Kentucky HBPA president Rick Hiles was not immediately returned. In addition to Hiles, other active defendants include Kentucky HBPA executive director Marty Maline; KTA president David Switzer; and THG executives Bob Reeves, Joe Santanna, Frank Petramalo Jr., and Wilson Shirley.

There has been little court filing activity by any party in the lawsuit in the last few months. Certain defendants that included the Florida Horsemen’s Benevolent and Protective Association and affiliate members were dismissed by CDI in July.

Flanery said the timing of announcing the agreement (after traditional business hours were over on New Year’s Eve) had nothing to do with a sense of urgency on either party to resolve matters before year-end.

“We all were trying to get things done,” he said. “We all hoped it would get done by the end of the year. But there wasn’t anything specific that said it had to be completed it by then. We would have loved to have gotten it done sooner.”