NEWS
ADW companies draw ire of Md. regulators
Posted: Tuesday, March 17, 2009 5:38 PM
by John Scheinman
The Maryland Racing Commission will send a cease-and-desist letter this week to three account wagering companies warning them to halt business operations in Maryland by March 31 unless they enter into a contract agreement with a licensed Maryland racetrack as required by state regulations.
The commission said Tuesday it will send the letters to Magna Entertainment Corp.’s XpressBet, Churchill Downs Inc.’s TwinSpires.com, and Youbet.com Inc. at the urging of Alan Foreman, legal counsel for the Maryland Thoroughbred Horsemen’s Association.
Foreman said no licensed track in the state has a contract with any of the three account wagering outlets expected to receive the letter, adding that Youbet.com has not paid for the right to operate in the state since 2007 and that the company owes the Maryland Jockey Club and state horsemen about $1-million in back fees.
Representatives of Youbet.com could not be reached for comment.
“I want to ensure we're getting paid according to Maryland law,” Foreman said. “You have total authority to affect the business of account wagering [in Maryland].”
Magna also owns Maryland Jockey Club, which operates Laurel Park and Pimlico Race Course. Magna and Churchill are partners in TrackNet Media, which distributes the racing signals of member tracks. Foreman said that when Magna formed TrackNet with Churchill, it ceded control of Maryland’s signal to Churchill.
“Make no mistake, [TrackNet] is Churchill Downs,” Foreman said. “When we got to the end of 2008, [the horsemen] told Magna they wanted to renegotiate the agreements in 2009. Youbet hasn't had a contract with Maryland since 2007, and owes us [more than] $1 million—money owed [to] everybody in this room.”
Foreman said Maryland law states that the takeout for wagers made through account wagering should be distributed the same as those made at the racetrack.
Foreman noted that the Maryland signal on HorseRacing TV, which Magna and Churchill also jointly own, “isn’t even visible.”
Maryland Jockey Club President Tom Chuckas agreed Laurel Park and Pimlico do not have an agreement with Magna, TrackNet, or Youbet.com for account wagering in 2009.
“Either you have an agreement with the account wagering entity or you don't, and it's unlawful according to our regulations,” said Bruce Spizler, the state counsel for the commission.
Bill Fasy, chief operating officer at Delaware Park and the Ocean Downs harness track in Maryland, said at the meeting that an agreement between Youbet.com and his company is in place for Ocean Downs, and that it has been receiving payment for the track's signal.
In other commission news, regulators unanimously approved the Maryland Jockey Club to begin offering Super High Five wagering beginning with the Pimlico meet that opens April 18. The wager requires bettors to pick the correct order of finish of the top five runners in selected races. Takeout will be 26.75%.
John Scheinman is a Washington, D.C.-based correspondent of THOROUGHBRED TIMES
