NEWS
Churchill ADW dispute lingers
Posted: Wednesday, May 07, 2008 10:43 AM
by Frank Angst
In a Wednesday morning conference call, Churchill Downs Inc. President Bob Evans told analysts and investors the company’s disagreement with horsemen on advance-deposit-wagering revenue could linger into 2009.
“We must be prepared,” Evans said. “These disputes could continue into next year.”
Kentucky horsemen have refused to allow Churchill Downs to export its signal to most ADW outlets because the Louisville track and horsemen have failed to reach an agreement on ADW revenue distribution. Because ADW accounts for about 10% of Churchill Downs handle, Evans said the track plans to cut purses next week.
Florida horsemen have blocked Churchill-owned Calder Race Course from sending its signal to most ADW outlets as well as racetrack simulcast outlets. Horsemen there also are negotiating an agreement on revenue from slot machines once the Miami track expands gaming. Calder already has announced a 30% purse cut, and Evans said another purse cut is likely.
With the expected loss in handle at both tracks, Evans said Churchill also plans cuts to operations.
Kentucky horsemen and their negotiating agent, the Thoroughbred Horsemen’s Group, want an increased percentage of ADW revenue for the Churchill Downs signal. The THG, which also is negotiating in several other states, including Florida and Texas, wants horsemen to receive 33% of ADW revenue.
“There is one fundamental flaw with their plan,” Evans said. “It makes our TwinSpires.com business unprofitable.”
Churchill Downs launched its own ADW, TwinSpires.com, in 2007. The National Horsemen’s Benevolent and Protective Association said when racetracks own ADW companies, they have an interest in promoting the ADW business, which can harm on-track handle where horsemen receive a more favorable split.
On April 24, Churchill filed a lawsuit against the THG and the Florida HBPA in the United States District Court for the Western District of Kentucky alleging that the THG, the Florida HBPA, and various other state Horsemen associations violated federal antitrust laws in connection with the interstate distribution of simulcast signals containing race content to off-track betting systems, including ADW companies.
Frank Angst is a senior staff writer of Thoroughbred Times
