Horsemen Urged to Stay the Course

Players involved in the fractious negotiations with Churchill Downs over revenue sharing on the evening of May 13 exhorted a gathering of more than 150 horsemen to stay the course in the standoff and support their efforts.

Panelists speaking at the Executive Inn East in Louisville, Ky., updated horsemen on the impasse in negotiations during the three-hour meeting, which included passionate input from attendees such as prominent owner/breeder Ken Ramsey and trainer Kenny McPeek, among others.

Rick Hiles, president of the Kentucky Horsemen’s Benevolent & Protective Association, which organized the affair, painted a picture of the Churchill Downs mindset, saying the track wants to “destroy the horsemen” with actions such as the recently announced 20% purse cut.

“They say, ‘we will cut purses until they bleed to death; they will give up’,” Hiles said. “They are saying that horsemen have no rights. They should take what we give them. Be quiet and be happy.”

The Kentucky HBPA and Kentucky Thoroughbred Association are directly involved in the negotiations, using the national Thoroughbred Horsemen’s Group as a broker. Horsemen basically want a third of takeout to go to purses from wagers made through advance deposit wagering companies, and Churchill is offering substantially less.

“We are saying, we are not going to recommend to our members that they grant approvals unless you pay us a fair share,” said Bob Reeves, president of the THG, which has 18 horsemen’s groups in its membership.

THG and its affiliates are focusing its ADW signal cutoff to such large players in the industry as Twinspires.com and XpressBet.com, which are owned by Churchill Downs Inc. and Magna Entertainment Corp., respectively, as well as TVG and Youbet.com, among a few others. Signals are not withheld for now from what are called regional ADWs that primarily service customers within their respective states, nor to large-volume offshore rebate shops such as Elite Turf Club and Racing & Gaming Services.

Bill Casner, chairman of the Thoroughbred Owners and Breeders Association, said his group supports the THG, because it brings a “skill-set” to the negotiating table that evens the odds.

“The racetracks … this is their biggest fear, because they have a competitive edge in the negotiating room,” he said. “They would like nothing more than to have than a group that they could intimidate, to threaten to withhold stalls. But when you bring in your team, it becomes a fair process.

“The one thing I would leave you with is that you are doing the right thing,” he continued. “The future of our purses comes down to how these issues are resolved. I don’t know how long it’s going to take. It’s a war of wills. The resolve I see is demonstrated by the number of people that are here tonight. But at the end of the day, I commend you for holding the line, and I would encourage you to continue to hold the line.”

Speaking from the audience, Ramsey brought a thunderous round of applause when he suggested he and other horse owners could stage a boycott of their own by not entering horses at Churchill.

“We as owners control our own destiny,” said Ramsey. “No one tells me what to do with my horses. We decide when and if we want to race. We hold the trump card. Have Churchill Downs treat us as partners, and not slaves that they can push around.

“We don’t have to enter any horses,” he continued. “If there is no racing at Churchill Downs, their stock (prices) will drop further, and if their stock drops, that’s when they get together and do something about it.”

Panelists cautioned that because of anti-trust laws, horsemen’s groups could not recommend such action, but said they were considering legal tactics of their own.

“I think we have certain options that we are weighing at this point,” said Douglas McSwain, an equine attorney and counsel for the National HBPA. “And some of those could result in having to take legal action.”

Also speaking from the crowd, McPeek offered that a non-profit ADW could be established to benefit horsemen, and that some of those in attendance, such as owner Jack Wolf, who has a background as a hedge fund manager, could help make it happen.

“If we own half the signal, then maybe we need to do something about it,” McPeek said.

Casner said TOBA at one time considered establishing an ADW platform, but said the start-up costs made that prospect prohibitive.

“And it would take a period of time to make that work,” he said. “What you have available (in negotiating) is something more powerful that starting our own ADW. We have said yes, this is the way to make change. The horsemen have the power. This will make it happen a heck of lot quicker that starting our own ADW.”

Hiles said the purse cut by Churchill Downs may end up being a non-event by the end of the meet, because if there is an overage, the track is contractually obligated to back-pay purse winners retroactively.
 
“They just pulled a number out of the air,” he said of the 20% cut, adding a decrease of less than 10% may instead have been in order. “The purse cut, they can do it now. But by the end of the year, there will be a day of reckoning. They will have to pay us back at the end of the meet.”

The standoff has resulted in the horsemen withholding approval for track signals to go to certain ADWs from several states including Calder Race Course, Lone Star Park, Presque Isle Downs, River Downs, and Thistledown. It is believed that similar action is in the works by horsemen to bar the signal for the Louisiana Downs meet, which is scheduled to start May 17.