Thoroughbred Sports Network Sues Youbet for Royalties

Youbet.com, the online horse racing and wagering service, is being sued by a Kentucky racing information company for allegedly failing to pay an estimated $80,000 in royalties.

Thoroughbred Sports Network filed a lawsuit in Fayette County Circuit Court in January claiming that Youbet.com had failed to pay royalties since June 2001. The company, meanwhile, said it has continued providing Youbet.com with handicapping information as required by a five-year contract dated Sept. 26, 1997.

Since the contract began, Youbet.com paid royalties to the Thoroughbred Sports Network according to the number of computer downloads requested by its members. They payments had been about $10,000 a month.

Youbet.com has acknowledged the contract, but has said in court records that the Thoroughbred Sports Network breached the agreement by providing the same handicapping information to a competitor and at a lower cost.

"TSN has entered into direct competition with YouBet via its interest in WinTicket.com," stated Youbet.com in its response to the suit. "TSN also appears to have violated the pricing provisions of the agreement by setting prices that are not commercially reasonable and competitive, particularly in light of the pricing it charges its own affiliate company, WinTicket.com."

The Thoroughbred Sports Network is a member of a limited liability company called AmericaTab, which owns WinTicket.com. The other members are OhioTab, a telephone account wagering partnership that includes Beulah Park and River Downs, and Bloodstock Research Information Services.

Tim Cone, the attorney for the Thoroughbred Sports Network, said the contract does include any provision for exclusivity and even if it did, said his client is not a competitor.

"TSN has not gone into competition with Youbet. It is an affiliate," he said. Besides, the competition issue is irrelevant at this point because Youbet.com has not "raised it to the level of a counterclaim," according to Cone.

"If they do decide to file a claim, we will vigorously deny any breaches," Cone said.

Attorneys for Youbet.com could not be reached for comment.

The Thoroughbred Sports Network asked for a summary judgment March 15 in a hearing before Circuit Court Judge Sheila Isaac. The judge denied the request and the case is proceeding to trial.