by Don Clippinger

The division of proceeds from advance-deposit wagering certainly is an important economic concern for racing’s stakeholders, but a very significant legal principle is at issue in a recent lawsuit against the Thoroughbred Horsemen’s Group and the Florida Horsemen’s Benevolent and Protective Association, the general counsel for the National HBPA said Wednesday.

Late on April 24, Churchill Downs Inc., Calder Race Course, and Churchill Downs Technology Initiatives asserted in a federal lawsuit that the two horsemen’s organizations had violated the Sherman Antitrust Act by refusing to approve the distribution of Calder’s races to out-of-state full-card simulcasting outlets. The Florida HBPA has no agreement covering either purses or prospective income from slots at the Miami-area racetrack, which is owned by Churchill.

At issue is whether the 1890 antitrust legislation, which prohibits restraint of commerce or trade by cartels or monopolies, applies to the interstate transmission of horse races, Douglas L. McSwain, the National HBPA’s attorney, told the 23rd annual National Conference on Equine Law in Lexington.

“That will be, in my estimation, the final antitrust call on this issue,” McSwain said.

McSwain, who is special counsel to the Florida HBPA in the Churchill case, contended that the Interstate Horseracing Act of 1978 effectively took interstate simulcasts out of the purview of antitrust law. Churchill has contended that the Thoroughbred Horsemen’s Group and the Florida HBPA improperly conspired to deny transmission of the signals and asked that the new horsemen’s group be disbanded.

Exactly a year ago, McSwain argued and won a case involving similar issues, when Choctaw Racing Services charged the Kentucky HBPA with violating the Sherman act by refusing to send the Kentucky Derby Presented by Yum! Brands (G1) and Kentucky Oaks (G1) signals to its outlets in Oklahoma and Wisconsin.

After a day of negotiations and a hearing, United States District Judge Charles R. Simpson III sided with the horsemen, stating that the Interstate Horseracing Act superseded the Sherman legislation on interstate horse-racing signals. McSwain said the oral opinion was not entered as a formal decision because the Choctaw group withdrew its suit.

The Churchill suit has yet to be assigned to a U.S. district judge in Kentucky.

Don Clippinger is editorial director of Thoroughbred Times