MEC, THG Talking But No Deal in Sight

Officials with MEC and the THG are talking, which some consider a posistive sign.

Officials with Magna Entertainment Corp. and the Thoroughbred Horsemen’s Group have met twice recently to discuss the ongoing conflict over revenue splits for advance deposit wagering, though the sides aren’t close to striking a deal.

The THG, which represents about 20 horsemen’s associations in negotiations with racetracks and ADW companies, hopes to get more revenue from account wagering. It advocates a formula whereby tracks, horsemen, and ADW providers would each get one-third of the blended pari-mutuel takeout rate, which averages about 21%, or 21 cents on the dollar.

The first action was taken in late April when the Texas Horsemen’s Partnership said the THG was negotiating on its behalf for the signal from MEC-owned Lone Star Park. The track and horsemen failed to agree, and Lone Star cut purses 10%.

Since then, other tracks have followed with purse cuts, including Calder Race Course, Churchill Downs, and River Downs. The conflict has impacted tracks in Delaware, Maryland, and Pennsylvania as well.

THG president Bob Reeves, a member of the Ohio Horsemen’s Benevolent and Protective Association board of directors, said the THG was formed to “work with companies with multiple racetracks,” namely Churchill Downs Inc. and MEC. The companies own and operate the ADW providers and, respectively.

“(MEC) management comes across to me as wanting to work with the THG,” Reeves said May 12. “We actually met with Frank Stronach (May 2), and had another meeting (May 8). We had a very productive meeting, and I think we are on the same page. We will continue to work together.”

The rumor mill, which has been churning with regularity since the first contact dispute involving the THG, paints the talks between MEC and THG as hardly productive. MEC vice president of racing Scott Borgemenke said the assessment depends on the perspective.

“Everybody has their own definition of productive,” Borgemenke said May 12. “We all need to be talking together. Is anybody close to a deal? No. But we hope to bring more people to the table. We’re making progress.”

Reeves said the two parties made a “to-do list.” Borgemenke said there were few specifics discussed at the meetings, but lots of “listening” took place.

CDI has a lawsuit pending against the THG in connection with its action in Florida and Kentucky. CDI alleges antitrust violations.

Doug McSwain, an equine attorney and counsel for the National HBPA, recently said the CDI suit could be the “final outcome call” on antitrust law as it relates to the pari-mutuel industry. McSwain said previous cases involving the Interstate Horseracing Act have shown “there is no free market in gambling,” meaning the Sherman Antitrust Act doesn’t apply.

Racetracks use consortiums—called cooperatives—that negotiate signal fees. The most prominent are the Mid-Atlantic Cooperative and the Southern Racing Cooperative.