NTRA Expected to Get Defection Letter Friday

More than two weeks before the Nov. 10 deadline to renew contracts, most racetracks in the six Mid-Atlantic states are prepared to sever their ties with the National Throughbred Racing Association after this year. The status of the seven tracks owned by Magna Entertainment wasn't known.

A Mid-Atlantic representative is said to have told NTRA officials by telephone Wednesday morning that racetracks in the region planned to leave the organization en masse. Official word isn't expected until Friday, when a letter is to be released to the NTRA and the media.

If reports prove accurate, up to 20 racetracks -- half of them in the Mid-Atlantic region -- could leave the NTRA fold.

Just two weeks ago, Maryland Jockey Club president Joe De Francis said negotiations between himself and NTRA commissioner Tim Smith in regard to the Mid-Atlantic tracks' concerns were progressing. But issues aside from governance and operation of an industry totalizator function have been raised.

In a statement released Wednesday evening, the NTRA said Penn National Gaming president Bill Bork, an NTRA board member who represents the Mid-Atlantic tracks, told the NTRA late Tuesday that the Mid-Atlantic tracks, as well as others, had decided to leave the organization.

"Mr. Bork indicated the two main factors for this were the recently announced agreement between the TV Games Network and the Breeders' Cup, and certain differences in connection with pending legislation," the statement said.

The NTRA board met by telephone Wednesday and said it plans to pursue discussions with the Mid-Atlantic tracks "to resolve the two new issues raised by Mr. Bork and to continue dialogue between the NTRA and the independent advisory committee." In September, the NTRA board formed a subcommittee to work with De Francis on the issues.

De Francis, who has served as spokesman for the Mid-Atlantic racetracks for most of this year, and who heads the advisory committee, couldn't be reached for comment. Bork declined to comment until the letter is released.

On Thursday, is still wasn't certain if the letter would state resignation, or just an intention to resign by the Nov. 10 deadline.

The Mid-Atlantic racing associations have taken issue with the new partnership between the TV Games Network and Breeders' Cup by which TVG earned exclusive interactive wagering rights to the Breeders' Cup championship races. In addition, they contend the NTRA pushed aside their request to include language that would protect states' rights and provide for regulatory oversight in federal legislation designed to protect pari-mutuel account wagering.

An NTRA official said Thursday the concerns weren't brushed aside.

An amendment sponsored by New Jersey Sen. Robert Torricelli wasn't incorporated in the Internet Gambling Prohibition Act that passed the Senate last year. But in a compromise on behalf of the Mid-Atlantic tracks, language was included that said an account-wagering provider may have to get approval from a regulatory agency in the state in which a wager originates.

The Torricelli amendment, as it is called, came about when TVG attempted to access New Jersey, where the tracks plan to offer their own account-wagering system should legislation pass.

Mid-Atlantic officials claim language they favor was watered down in an omnibus spending bill under consideration in Washington, D.C. The industry has attempted to get provisions protecting the pari-mutuel industry included in the bill because the Internet Gambling Prohibition Act got hung up in the House of Representatives.

TVG, an interactive television and wagering network, has long been a bone of contention with the Mid-Atlantic tracks because companies such as Greenwood Racing, Ladbroke Racing, and Penn National Gaming offer their own telephone account betting services. Some racetrack companies, including Magna, believe the NTRA shouldn't compete with its members either directly or through partnerships with other entities.

TVG's hook has been its pledge to return money to racetracks and horsemen via source-market fees. On that note, a press conference scheduled for Thursday at Keeneland in Kentucky was postponed and not rescheduled as of Wednesday. TVG was to present a check for more than $1 million in source-market fees to Kentucky horsemen.

The NTRA, in its original business plan, projected that interactive wagering revenue generated by its partnership with TVG would account for $10 million of its annual budget by this time. That hasn't materialized.

Reports differ as to whether some or all of the Mid-Atlantic tracks will bolt, but they all belong to a cooperative by which they stick together under a "one for all, and all for one" policy to negotiate better deals on things such as simulcasting rates. About 20 Thoroughbred and Standardbred tracks in Delaware, Maryland, New Jersey, Pennsylvania, Virginia, and West Virginia account for about 20% of total annual handle in the United States, and therefore carry some clout.

The only Thoroughbred track in the six-state region that isn't expected to be part of the mass defection is West Virginia's Mountaineer Park, located on the Ohio border and far removed from the other tracks.

The NTRA hasn't received word from other potential defectors -- Magna or Fair Grounds, whose owner, Bryan Krantz, is an NTRA board member. The racetracks considering defection -- Hawthorne Race Course near Chicago, Ill., and Oaklawn Park in Arkansas are said to be on the list -- are expected to make their intentions known by Friday, though one official reiterated that things could change before the Nov. 10 deadline.

Two of Magna's tracks -- Gulfstream Park and Santa Anita Park -- host major races for 3-year-olds and older horses that are regularly broadcast on national television. How that coverage would be impacted if the tracks defect is unknown.

The case of Santa Anita is complicated by the fact that Oak Tree Racing Association, a founding member and strong supporter of the NTRA, holds its fall meet at the Arcadia, Calif., racetrack. It could conceivably request to move its meet to another NTRA-member racetrack in California.

In addition, the Breeders' Cup adopted a policy whereby only NTRA-member tracks can host the annual championship. Gulfstream and Santa Anita are host tracks.

Smith met with Magna officials in Las Vegas, Nev., last week in an effort to convince them to remain in the fold. Magna officials couldn't be reached for comment Wednesday.

Any mass defection of racetracks would put horsemen's associations in an awkward spot. Though racetracks benefit directly from the NTRA's cooperative advertising program, horsemen hope a projected bump in purses materializes at tracks at which they race.

The NTRA earlier this month announced it had equalized dues paid by racetracks and their partner horsemen's associations. This summer, the National HBPA claimed the previous formula wasn't equitable given the immediate return to member racetracks.

The big question is whether it would be worth it for horsemen to remain members if their racetrack partners drop out. With few exceptions, horsemen's associations have been solid NTRA supporters.

Alan Foreman, an NTRA board member and chief executive officer of the Thoroughbred Horsemen's Association, said Thursday the THA remains strongly committed to the NTRA. The THA represents horsemen at Delaware Park, Laurel Park and Pimlico Race Course in Maryland, and Monmouth Park and The Meadowlands in New Jersey. All of those tracks are expected to sign the defection letter, though the two New Jersey tracks are said to be awaiting the go-ahead from the New Jersey Sports and Exposition Authority's executive committee.

"We're trying to move the industry forward," Foreman said, "and will continue to be a strong supporter of the NTRA with or without the racetracks. We're trying to do what's in the best interest of racing."