Breeders' Cup Urges Policy on Rebate Shops

Breeders' Cup, faced with a potential decline in handle for this year's World Thoroughbred Championships given the absence of secondary pari-mutuel operators from its pools, is calling for the industry to expedite a policy on rebate shops.

Last year, SPMOs, as they are called, produced about $7 million in handle on the Breeders' Cup, held at Lone Star Park. New York earlier this year pulled the plug on SPMOs, and that ban remains in place. The World Thoroughbred Championships will be held Oct. 29 at Belmont Park.

"Our concern from the Breeders' Cup side is what were the standards and policies applied to eliminate these sites?" said Ken Kirchner, senior vice president of product development for the National Thoroughbred Racing Association. "We agree wholeheartedly with the need for full disclosure as far as ownership of SPMOs and information regarding their players, and we want tote security at the highest level possible. Our complaint has been we're not seeing a written policy from the New York State Racing and Wagering Board on what criteria was used for disallowing these sites."

The sites, many of which operate off shore, were denied access to New York Racing Association pools after a federal investigation into illegal wagering and race-fixing. Other racing associations followed suit, though some have reinstated their relationships with some SPMOs.

"Magna Entertainment Corp. and Churchill Downs Inc. are accepting bets from the same outlets that are banned in New York," Kirchner said. "Whether it's establishment of a National Office of Wagering Security or whatever, we need to come to grips with a consistent policy on SPMOs."

In 2004, total Breeders' Cup day handle was a record $120.89 million. Lone Star, however, because it's located in the Central Time Zone, was able to card 12 races. Belmont this year will have only 10 races.

Kirchner said the extra two races accounted for $6 million handle. Coupled with the loss of handle from SPMOs, Breeders' Cup will start the day about $13 million in the hole, he said.

When asked if he believed some rebate shop customers may migrate to racetracks or other betting services, Kirchner said: "Hopefully, with full fields and great betting value, we'll make up the difference. We hope they'll say the value of Breeders' Cup day is more important that what their rebate was."

Kirchner said he spoke to one Florida bettor who said he hasn't bet on New York racing since the cutoff of SPMOs. He reiterated the industry needs a policy to deal with the loss of such handle.

"Several (rebate) sites have submitted extensive documentation to the Thoroughbred Racing and Protective Bureau for review, but the review will not be complete in time for those sites to be included (in Breeders' Cup pools)," Kirchner said.

Kirchner said Breeders' Cup hopes to pick up some handle from Canadians, which this year will wager directly into Breeders' Cup pools. Canada produced $4.9 million in separate-pool handle last year; Kirchner said that figure could rise about 20%.