McAlpine Challenges Industry, TVG to Embrace Free Enterprise

Magna Entertainment president Jim McAlpine challenged horse racing's leaders Thursday to make industrywide deregulation a top priority and to embrace the fully competitive marketplace such a change would produce.

McAlpine, also chief executive officer for the Ontario-based racing conglomerate, made his appeals during the ongoing University of Arizona Symposium on Racing in Tucson, Ariz.

"Today, MEC's true competition isn't Churchill Downs or NYRA (New York Racing Association), it is Vegas and Disney and anyone else trying to reach into customers' pockets and grab a piece of their entertainment dollar," McAlpine said.

While racing fights to maintain barriers to competition, Las Vegas casinos have spent billions of dollars reinventing themselves as entertainment destinations and lured away many of racing's customers. Racing, McAlpine said, can only compete now by embracing free enterprise.

"A racetrack should open when it wants and sell what it wants for the price it wants," he said. "This is the only model that allows the customers to decide who succeeds and who fails. And since the customers pay the bills, they should have a big say in who stays in business."

McAlpine urged the National Thoroughbred Racing Association to spend less toward advertising and getting races on television and more on educating legislators and achieving legislative reform.

"Twenty five million dollars per year would do a lot more to bring about a better legislative framework then it will to bring pari-mutuel wagering and horse racing to television screens in 100 million homes in America," he said, refering to how much the NTRA has budgeted for marketing.

McAlpine said the free enterprise model also should be extended to Internet and telephone account wagering.

Magna Entertainment is ready to launch its own online and telephone account wagering service as soon as it receives a license from the state of California. McAlpine said he had hoped by the time California had approved account wagering, that Magna could have worked out deal to share racing content with the TV Games Network. TVG has exclusive distribution contracts with many of the country's top racetracks outside the Magna family. McAlpine said his company began negotiating with TVG last January and made its pitch again as recently as two days ago to share racing equally with non-exclusivity contracts, but TVG has shown no interest.

Because California's adoption and implementation of account wagering took a fast track this year, McAlpine said Magna pursued its own account wagering service first and figured to negotiate with other tracks for additional content along the way.

McAlpine said while television images are important for the long-term success of any account wagering system, it is not critical in the beginning.

"I had hoped to be farther along in negotiating so I could say more," he said. "I can guarantee we will have pictures."

Magna bought into The Racing Network when it acquired The Meadows harness track and the Call-A-Bet account wagering service from Ladbrokes. The Racing Network has since stopped operating in the United States, but "remnants" of the company's satellite television network could still be used, McAlpine said.

"Our objective is to get as much content in front of as many customers using multiple distribution channels," he said. "We believe the best environment for horsemen and racetrack owners is to have competitive alternatives for producers to get their racing product to market. A single slaughterhouse or a single grain elevator operator wouldn't help farmers get the best price for their product. A single television outlet won't help our producers get the best price and distribution either."

(On Friday, TVG president and CEO Mark Wilson responded to McApline's statements. See TVG's Wilson Responds to Comments by Magna's McAlpine)