Florida HBPA Using THG in Negotiations

The Thoroughbred Horsemen's Group is involved in negotiations in South Florida.

by Jim Freer

The Florida Horsemen’s Benevolent and Protective Association has given the new national Thoroughbred Horsemen’s Group authority to negotiate terms with advance deposit wagering companies for betting on races at South Florida Thoroughbred racetracks.

In announcing that arrangement April 11, the Florida HBPA also set a firm position on its negotiations with Calder Race Course in Miami Gardens, Fla., and parent Churchill Downs Inc. on contracts for the Calder meet that begins April 21.

“There will be no contracts with Calder for racing and simulcasting until separate agreements on slot machines and on ADWs through the THG are in place,” Florida HBPA president Sam Gordon said.

In a statement given to Calder director of communications Michele Blanco, CDI executive vice president Steve Sexton said: “Churchill Downs has been in talks with representatives from the Thoroughbred Horsemen’s Group. We have no issue in working with them. We realize that the Florida HPBA is expressing its concerns to them.”

CDI is “eager to resume talks” with the Florida HPBA, Blanco said. “There is a meeting planned for (April 14 at Calder), and Steve (Sexton) plans to be there,” she said.

Miami-Dade County voters approved a ballot issue Jan. 29  that permits Calder to have a casino with as many as 2,000 Class III Las Vegas-style slot machines. CDI officials have said Calder will not have a casino until 2009 at the earliest. Thus, they have said CDI does not see the urgency to have a slots contract signed this year.

Meanwhile, reports are again circulating that Gulfstream Park’s long-range strategy could include adding racing in December--a month that has long been an important part of Calder’s season. But Gulfstream “does not have a plan to extend our racing season” following a recent agreement to continue cross-track simulcasts between Gulfstream and Calder, Gulfstream president and general manager Bill Murphy said.

South Florida is dealing with contentious inter-industry negotiations as track owners and horsemen attempt to retain what all consider their fair shares of overall wagering dollars, which are declining amid a slumping economy and completion from tribal casinos. The Florida HBPA’s use of the THG in negotiations is the latest tactic aimed at increasing a share of those revenues.

CDI owns TwinSpires.com and its wagering system. TrackNet Media Group is a partnership between CDI and Magna Entertainment Corp., Gulfstream ’s parent company.

On April 10, the Texas Horsemen’s Partnership announced it is the first horsemen’s group that will require ADW companies to enter into licensing agreements with the THG. The Texas horsemen are beginning that arrangement in negotiations with MEC-owned Lone Star Park, which began its meet April 10. In addition to its TrackNet Media investment, MEC also operates XpressBet.

The THG was formed in December 2007 and is comprised of 18 horsemen’s organizations with contracts at 52 racetracks in North America. Its goal is to help horsemen’s groups gain larger percentages of revenue from ADWs, which produce less for purses than on-track and simulcast wagering, Florida HBPA executive director Kent Stirling said.

The Florida HBPA’s 2007 purse contract with Calder had a provision that the contract would be null and void if voters approved slot machines for Calder. Gordon said horsemen want a Calder slots agreement with CDI this year because  horsemen have heard rumors that CDI might be considering a sale of all or part of Calder to Penn National Gaming Inc. of Wyomissing, Pa.

In an April 8 interview with The Blood-Horse, Calder president Ken Dunn said no representatives of PNGI have been at Calder. Dunn said he had heard the rumors “mostly from horsemen.” If reports are correct, he said, business people should expect that PNGI  would have sent officials to Calder for due diligence.

On April 9, CDI announced that Dunn was stepping down as Calder president and as CDI senior vice president of Florida operations. CDI announced terms of his severance agreement in a document it filed with the Securities and Exchange Commission of April 9.

On April 11, Murphy confirmed reports that Gulfstream was considering live racing for December 2008--in direct competition with Calder-- if the two tracks and Florida horsemen had not reached a cross-simulcasting agreement by late March. Gulfstream dropped its plan after the tracks and Florida HBPA on March 28 signed an agreement that extends cross-simulcasting through May 31, 2009, Murphy said.

The agreement for the first time allocates a portion of the guest track’s simulcast revenue to purses.

The South Florida tracks began cross-simulcasts in September 2007. Stirling said handle data indicates the volume of new guest-track wagering has not been enough to make up for the decline in horsemen’s purse money that has resulted from drops in on-track handle at Calder last fall and at Gulfstream this year. About 10% of on-track bets are designated for purses and owners’ awards.

Until the cross-simulcast split was changed April 5, the host track’s blended split share was about 14 cents, half of which went to horsemen. The guest track took about seven cents, giving none to horsemen. The new system gives 25% of the guest track’s split to horsemen, and retains the other splits.

Gulfstream for several years has held races from early January through mid-April. Throughout this season, Gulfstream has told Florida HBPA members and other trainers that it needs year-round cross-simulcasts to provide revenue for its facility, which is open year-round with a slots casino and restaurants, Murphy said.

Murphy said Gulfstream made it clear to all parties it would need to consider extending its season, perhaps to year-round, if it could not take simulcasts from Calder. That includes Thoroughbred signals Calder imports during its eight-month meet.

Calder was not open for simulcasts during its off-season until the Supreme Court of Florida overturned a state ruling that prohibited it to cross-simulcast with Gulfstream.

Thus, Gulfstream, with its building already open year-round, was more willing to give the Florida HBPA and Florida Thoroughbred Breeders’ and Owners’ Association a bigger share of cross-simulcast revenue.