California ADW Rivals Near Signal Agreement

California customers of rival account deposit wagering companies TVG and XpressBet would be able to play any track in the state with their preferred carrier under an agreement being negotiated on a one-year experimental basis.

Drew Couto, president of the Thoroughbred Owners of California, said Nov. 27 that if the two sides can work out the final details, TVG customers would be able to wager on Santa Anita and Golden Gate Fields this season. Santa Anita opens its 2006-07 season on Dec. 26. In addition, XpressBet customers would be able to make bets on Del Mar, Hollywood Park and Oak Tree races later in the year.

"I'm cautiously optimistic," Couto said. "Proposals have been exchanged and now the parties are negotiating to make everybody comfortable with the arrangement.

"Obviously, we would like to have something in place by early December, for marketing purposes ... We should know within 10 days."

This would be a first since the California Horse Racing Board approved the initial ADW licenses in 2002. TVG -- and to a lesser extent, the Magna Entertainment-owned XpressBet -- has closely guarded exclusivity contracts held with individual racing associations. Magna owns Santa Anita and Golden Gate Fields. The experimental agreement would last for one year, when the current state legislation governing ADW expires.

Couto made his remarks after telling the CHRB at a commission meeting at Hollywood Park earlier in the day that the TOC has "agreements in principle" with all three ADW companies in the state for 2007, including youbet.com. The commission later approved next year's operating licenses for the companies without conditions. Action on a license for a fourth company, the Novato, Calif., based Day at the Track, was deferred until it has agreements in place with the racing associations it plans to carry. Day at the Track could be the first new ADW company approved in the state since the original licenses were issued.

The TOC and TVG have been at odds over hub fee rates – the amount the ADW company can charge for its service – and have not had a contract all year. The impasse has been problematic for some CHRB commissioners who have repeatedly expressed their displeasure with account wagering.

"For 2008, a new (ADW) bill will need to be passed," Couto explained. "I think we all recognize that the current one isn't perfect and it will need some tweaking. We don't know exactly what the effect non-exclusivity would have on rates, so instead of guessing this would give us a much clearer idea."

He said the TOC has negotiated two hub fee rate agreements with TVG, depending on whether or not there is an exchange of signals.

"I don't want to jinx this thing, so I'd prefer not to say what the rates are," Couto said. "We have the possibility (of a signal-sharing arrangement) at the moment. If it happens we will definitely answer all these questions."

In other action, the commission unanimously re-elected Richard Shapiro as chairman and John Harris as vice chairman for 2007.