Horsemen to Consider Operating Offshore Betting Hub

The National Horsemen's Benevolent and Protective Association, in an effort to thwart what it believes is a growing problem with the piracy of signals and subsequent loss of revenue, plans to discuss the possibility of operating its own offshore wagering hub.

National HBPA officials said the topic would be the focus of a strategic planning session during its executive committee meeting in late September in Las Vegas. They also called for affiliates to step up financially to create a legal defense fund.

"The future of our industry lies offshore from a horsemen's standpoint," National HBPA president John Roark said July 13 during the organization's board of directors meeting in Cleveland, Ohio. "We've saturated the market in this country, and some in this country that take signals aren't paying horsemen.

"What are we going to do about it? We're going to go after them. We need to tell them, 'You're going to be in the courthouse if you don't pay us what you owe us.' "

Last year, the National HBPA hired Stevenson & Associates to assist it with simulcasting issues. According to a National HBPA memo, up to 24 betting shops in Juarez, Mexico, have been taking bets on races from the United States, facilitated by the "potentially unauthorized" use of TV Games Network signals.

The National HBPA said in early 2003 Racing Services Inc. of North Dakota enlisted Stevenson & Associates to obtain signals from Magna Entertainment-owned tracks for a network of hubs in Juarez. Racing Services has an operation under the name EDENSA in Mexico.

The deal was consummated, but Stevenson & Associates claims another company owns 85% of EDENSA, according to the HBPA memo. A Stevenson & Associates representative visited a few betting shops and noted multiple televisions with the TVG signal, the memo said.

In the end, the Churchill Downs Simulcast Network and TVG issued cease-and-desist letters to Racing Services. A letter from a Racing Services attorney said the company believed it had an agreement with TVG, and if there was a misunderstanding, it was in good faith.

Susan Bala, president of Racing Services, couldn't be immediately reached for comment.

Roark said similar situations have developed with four or five other wagering-service providers. "We've got to stop it, and stop it now," he said.

The offshore hub concept figures to be reviewed with a fine-tooth comb. Stevenson & Associates, hired by the National HBPA under a three-year contract, has among its other clients racetracks and Racing and Gaming Services, an offshore wagering provider that offers "dividends" to big players. One HBPA official said the situation is ripe for a "built-in conflict of interest."

"We want to look at this very closely," said Bill Walmsley, president of the Arkansas HBPA. "We need to look at the legalities of it, and the plusses and minuses. It needs to be done slowly, with full disclosure, and only with the assistance of legal counsel."

In 2002, a National HBPA task force found no evidence of criminal liability on the part of former officers and the executive director of an affiliate in connection with Century Consultants, a company formed to help Choctaw Indian casinos land simulcast signals. Said Walmsley: "We're not going to make that Choctaw mistake again."

Doug McSwain, counsel for the National HBPA, said Stevenson & Associates' sole purpose, as far as the horsemen's group is concerned, is to provide information. Remi Bellocq, executive director of the National HBPA, said both sides would proceed cautiously given the potential for conflicts.

The National HBPA earlier this year issued a white paper on simulcasting. At that time, the organization said horsemen are losing revenue via signal leakage and piracy by offshore betting establishments.

Florida HBPA president Linda Mills said the organization also must address wagering outlets that take signals but don't support live racing. She suggested those outlets pay more for the product.

"As long as their bottom line grows, they're happy," Mills said. "Anyone that does not support live racing should pay more for signals."