by Ed DeRosa

Representatives of the three stakeholders of simulcast wagering—horsemen, the racetracks, and account wagering companies—took to the dais on Tuesday at the International Simulcast Conference in St. Petersburg, Florida, where they each advanced the position of their constituents.

There was not a lot of agreement among the three positions, giving little hope to bettors that they will be able to wager on the track of their choice through the account wagering company of their choice in the near future.

The Thoroughbred Horsemen’s Group formed late last year to act as agent for horsemen groups negotiating simulcast contracts. The THG typically seeks a third of the takeout from bets made through account wagering companies. The failure of tracks such as Calder Race Course, Churchill Downs, Presque Isle Downs, River Downs, and Thistledown to meet those demands has caused the horsemen organizations in those respective jurisdictions to withhold its approval for the tracks to send the signal to account wagering companies.

Churchill Downs Inc. owns Calder and Churchill and negotiates the distribution of those signals via TrackNet Media Group, a venture with fellow racetrack conglomerate Magna Entertainment Corp.

Drew Couto, the president of Thoroughbred Owners of California and vice president of the THG, said that under the TrackNet model, live racing venues retain only 42.5% of revenue from betting, a far cry from the 72% of revenue live racing retains when bets are made at traditional brick and mortar locations.

“Horsemen and live racing entities take a 40% hit on our revenue under the TrackNet model,” Cuoto said. “This is a recipe for disaster.

“From 2001 through ’07, ADW handle has grown from $68-million to $1.2-billion; that’s a rate of 30% per year, but it’s not growth, it’s just a shift because horsemen and live racing gets less money. We traded 70% of revenue for 40%.”

Couto continually referred to the tracks that operate live racing as THG’s partners, an assertion that both Chris Scherf, executive vice president of Thoroughbred Racing Associations of North America Inc., and Mike Weiss, president of Beulah Park, both hotly contested.

“I disagree with Drew’s use of the word ‘partner,’” Weiss said after Couto and Scherf had both made formal presentations. “I don’t believe the track has been your partner. We’ve been issued demands and the horsemen have held the signal hostage.”

Scherf said that the THG’s negotiation style does not support the idea of live racing venues as “partners.”

“The THG starts with wanting [a third] of the [account wagering] revenue, so if you get 8% then the horsemen get 7% and the track gets 1%; if you get 10% then the horsemen get 7% and the track gets 3%,” Scherf said. “When THG negotiates, it’s purely on the horsemen’s behalf.

“The THG began with noble intentions, but now it’s only about the money. I’m not sure it’s good for the industry.”

THG President Bob Reeves said that THG’s intentions are pure and that its goal is to see live racing survive.

“We have bent over backward to work with TrackNet and its partner Churchill Downs but have been met with nothing but resistance,” Reeves said.

Couto said that Magna Entertainment has opened negotiations with the THG separate from TrackNet.

Ed DeRosa is news editor of Thoroughbred Times