Santa Anita, Golden Gate to 'Limit' ADWs

Thoroughbred Owners of California is requiring "geolocation" deal to grant approval.

Santa Anita Park and Golden Gate Fields are planning to limit the amount of advance deposit wagering operations that are permitted to take bets on races at the two racetracks, Scott Daruty said at a California Horse Racing Board meeting Dec. 15.

Ongoing financial relationships between racetracks, advance deposit wagering platforms, and horsemen were again the centerpiece of the CHRB meeting at Los Alamitos Race Course.

Daruty, who often speaks at CHRB meetings representing various entities aligned with The Stronach Group (which owns both Santa Anita and Golden Gate), said the racetracks have already reached agreements with TVG and Xpressbet (another entity of The Stronach Group), and would likely reach a deal with TwinSpires and NYRA Bets. Those left out could include BetAmerica and Watch and Wager.

"We came to the conclusion that we're not sure we're doing the right thing at Santa Anita by sticking our neck out and taking heat from horsemen and regulators on one side, and ADWs on the other side for not giving them the kind of deals they want," Daruty told the CHRB. "We really looked at our approach—and others in the industry can do what they want—but we feel the right thing may be to limit the number of ADWs that have been contracted with Santa Anita in the past."

Both TVG and Xpressbet, according to Daruty, have signed agreements with Santa Anita and Golden Gate, along with the Thoroughbred Owners of California, to implement geolocation technology for mobile ADW wagers. A desire of the TOC for nearly three years, geolocation allows for an increase in the track's percentage of takeout for on-track wagers when they are made through a mobile ADW application.

Although Daruty stated a willingness not to permit ADWs like BetAmerica and Watch and Wager, the decision of ADW approval ultimately falls on the TOC for California bettors wagering on California racetracks.

"The law provides the TOC with a couple approvals, shall we say, for ADW agreements ...  For ADW wagering on California races, by California customers, the TOC has to approve any ADW taking those bets," said Greg Avioli, president and chief executive officer of the TOC. "Because three years of good-faith, honest negotiations got us nowhere with getting the ADWs to comply with our very reasonable request ... we exercised our right and let people know that this year, starting with Santa Anita and Golden Gate, we were not planning on approving any ADW to take bets from California residents on California-hosted races unless they agreed to this (geolocation) proposal."

John Ford, the chief executive officer of BetAmerica, made his case for the board to intervene, based on the fact that he felt the agreement made was "anticompetitive."

"What I heard from (Daruty) is rather unprecedented and surprising ... This is nothing but anticompetitive," said Ford, who explained during a CHRB committee meeting a day prior that BetAmerica would lose money under the proposed on-track ADW wagering deal because of other fees the company pays into the industry. "I don't think this is what this sport had in mind when it granted the waiver to allow Stronach to be able to own two racetracks in California. ... Reducing the number of ADWs that are licensed in California ... is not in the best interest of racing in California."

Ford was joined by TwinSpires president Brad Blackwell in questioning the motivations surrounding the agreement between parties often intertwined in the business.

"We can't invite ourselves to meetings," Blackwell said. "When something shows up on (a CHRB agenda), we know it's an item and we have showed up to express concern—to express the issues. Our problem is receiving an agreement that has already been agreed upon by our competitors in a negotiated manor—some of which are related parties—and now those terms are being dictated to us under the threat of cutting content. I would think the board would discourage this type of behavior."

CHRB executive director Rick Baedeker made sure to note that the matter was not for the regulatory agency to decide.

"While the board has expressed an interest in the geolocation issue, at this point, it is not responsible for the geolocation issue," Baekeker said. "That has been a matter of negotiation between the parties. ... Everybody is trying to negotiate publicly today, but to set the record straight, right now it's not a rule."

The CHRB ultimately voted 4-0 to approve the racing application for both Santa Anita and Golden Gate's upcoming meets, which begin Dec. 26.