Exclusivity Deal Between Hawthorne, TVG Terminated

Hawthorne Race Course, which opens for live racing Sept. 15, and TVG have ended their exclusive contract, which led the Illinois track to strike deals with Youbet.com and XpressBet to offer wagering on its signal.

In a release, Hawthorne said the agreement with YouBet.com and Magna Entertainment Corp.-owned XpressBet will allow players who have accounts with either company to wager on all live races. In addition, Hawthorne's races will be available through MEC-owned HorseRacing TV on DISH Network Channel 404 and through video streaming on the Youbet.com Web site.

No reason was provided for termination of the TVG contract. Just minutes before the release was issued, Hawthorne president Tim Carey indicated the track may discuss account wagering matters over the weekend.

In a statement released Sept. 15, TVG said it would no longer carry the Hawthorne product. TVG said the contract termination was mutual.

"As a result of the recent actions in Illinois, we approached Hawthorne about terminating our relationship and mutually concluded that it was in the best interest for both parties to walk away," TVG general manager David Nathanson said. "Our focus remains on delivering the highest-quality broadcast to the broadest audience from our premium lineup of tracks, including Belmont Park, Oak Tree, Keeneland, Hollywood Park, and Churchill Downs, and on working with track and horsemen partners who value the broad distribution, coverage, and revenue benefits that TVG delivers as the leading television and (account wagering) provider in the United States."

The dispute became public Sept. 6 when the Illinois Thoroughbred Horsemen's Association announced it had suspended the Arlington Park signal to TVG. Illinois THA president Joe Kasperski said horsemen were attempting to force negotiations between TVG and Youbet.com over the sub-licensing fee TVG charges Youbet.com to offer wagering on the Hawthorne signal.

The morning of Sept. 15, Hawthorne wasn't among the racetracks listed on the TVG broadcast schedule. Officials had called the situation "fluid."

Youbet.com and other account wagering companies must pay TVG sub-licensing fees for signals from tracks that have exclusive agreements with TVG. Youbet.com chief executive officer Charles Champion earlier said the company opted not to offer Hawthorne because it doesn't make economic sense given the sub-licensing fees.

The fees are believed to be about 5.5% of handle.

Youbet.com thus far has refrained from issuing a statement on the Illinois situation.

AmericaTab, the Ohio-based account wagering company with multiple affiliates including WinTicket.com, was scheduled to offer wagering on Hawthorne Sept. 15. AmericaTab also has a sub-licensing deal with TVG.

"We're happy to have Hawthorne," AmericaTab general manager Mike Weiss said. "We have a great relationship with Hawthorne."

XpressBet and TVG have been unable to come to terms on a contract to exchange content. That means TVG-exclusive tracks aren't available through XpressBet, and MEC-owned tracks aren't offered through TVG.

Industry officials have said the Illinois developments could be an indication the account wagering environment is in store for changes, particularly when it comes to exclusive contracts. Churchill Downs Inc., which owns Arlington, indicated earlier this year it's reviewing its contracts with TVG, the first of which expire in March 2007.

CDI is one of the major content providers for TVG, along with the New York Racing Association.