California ADW Test Ends; THG Talks Set

California ADW Test Ends; THG Talks Set
Photo: Benoit
Drew Couto, president of the Thoroughbred Owners of California
A fan-friendly experiment to share racetracks among California's advance deposit wagering companies has ended with the start of the Del Mar meet July 16.

But Drew Couto, president of the Thoroughbred Owners of California, remained optimistic that horsemen would eventually prevail in their effort to open access to wagering content. He said that all but one of the ADW companies have signed letters of intent to meet with national representative Thoroughbred Horsemen's Group to negotiate several issues that could become significant obstacles to future agreements for the interstate transmission of California's racing signals.

Couto said he expected to also receive a letter from TrackNet Media Group, the last of the companies, authorizing "non-binding discussions" with the THG, which represents 18 horsemen's organizations around the country. Couto is executive vice president of the THG, which was formed to develop a new business model for distribution of simulcast and ADW wagering revenue that is more beneficial to race tracks and horsemen.

After a number of meetings this month, industry representatives were unable to come to an agreement on a shared wagering content arrangement in California that would have allowed the 8 1/2-month-old experiment to continue for the remainder of the year. As a result, TVG, along with its sub-licensee, will continue to exercise the exclusive contract with Del Mar for wagering and broadcasting of Del Mar's popular summer meet, which runs until Sept. 3.

"We wanted to continue the experiment in California but were unable to come to an agreement with TrackNet Media (representing Churchill Downs Inc. and Magna Entertainment Corp.) that would have allowed us to share content," said John Hindman, TVG's general counsel. "It will be business as usual with TVG from Del Mar."

ADW companies XpressBet and were also involved in the talks.

Since the beginning of last autumn's Hollywood Park stand, ADW bettors in California have been able to wager on all races in the state from a single platform. The arrangement proved financially successful for the tracks, horsemen, and the account wagering providers, according to figures provided by the California Horse Racing Board last month. It has also been enthusiastically received by fans, who have made home or computer betting the only growing segment of handle in the state.

TVG, though, owns exclusive rights to the remaining meets -- which also include Fairplex Park and Oak Tree at Santa Anita -- and wanted comparable content from its rivals to compensate for relinquishing its hold.

Hindman said his wagering and television network  is willing to participate in talks with THG.

"The TOC has indicated an interest in having them (THG) participate, and we're happy to include them if it will help solve the ongoing issues affecting our customers," he said.

Access to the ADW companies has been a problem, said Bob Reeves, president of the THG, who applauded the effort by California owners.

"In order to get the ADW companies to sit down at the table, the TOC has said it is willing to authorize the use of its Del Mar signal for the current meet," Reeves said.

Last month, the TOC's board of directors authorized the THG to act as its "broker" in negotiations with the account wagering companies. The TOC, the majority representative of owners in the state, has control of the exported racing signal under provisions of the federal Interstate Horseracing Act.

Reeves said the THG is primarily interested in opening access to wagering content among all tracks, broader distribution of race content and a "consistent financial model" that standardizes issues such as interstate rates for imported signals -- the amount paid by ADW companies to horsemen and tracks -- and source market fees.

He has suggested that account wagering revenue be distributed more equitably, with racetracks, horsemen, and the providers dividing fair shares rather than the companies taking the majority of revenue.

"All we're saying is that the current account wagering model is not working for us," Reeves said.

No time table for discussions has been set, but Reeves said he would like to have something done by the time the Del Mar season ends.

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