Category Archives: Horse Racing
Posted on: February 6, 2021, 11:30h.
Last updated on: February 7, 2021, 01:56h.
Read MoreA Churchill Downs Inc. subsidiary filed a lawsuit in federal court this past week against horse owners in California in an attempt to keep them from taking the Louisville, Ky.-based company to arbitration over commissions the company’s online wagering service takes from bets made in the state.
Hit the Road races to victory is Saturday’s Grade III Thunder Road Stakes at Santa Anita Park in Acadia, Calif. The track has boosted purses this year due to an agreement between owners, tracks and online wagering platforms. Last week, Churchill Downs sued the Thoroughbred Owners of California because it claims the organization is trying to force it to take reduced fees and give more money to owners. (Image: Santa Anita Park)Last Tuesday, Churchill Downs Technology Initiatives filed the lawsuit in the California Central District US District Court. In the filing, it said it reached an agreement with Santa Anita Park to establish a fee rate it would collect for wagers placed this year by California bettors through either TwinSpires or BetAmerica, its two online wagering platforms.The amounts Churchill Downs will receive were redacted throughout the document. However, they are below 6.5 percent of the total handle, according to the lawsuit. The Thoroughbred Owners of California were not a party to those negotiations. However, Churchill Downs claims the horsemen want the company to get only 4.1 percent of the money wagered.Under California law, online wagering platforms must submit copies of their in-state agreements with the TOC.Churchill Claims “Shakedown” from OwnersAccording to the lawsuit, Churchill Downs claims the owners want it to “voluntarily return” more than $1.2 million it received last year. In addition, on Jan. 13, TOC formally requested arbitration and started a 60-day window. The complaint calls that process “unconscionable” and one that undermines the company’s ability to utilize the court system.Churchill Downs called the TOC’s actions a “shakedown” and said it threatens the future of the TwinSpires and BetAmerica platforms within the state. The company said the owners are giving them three options, none of which are good – accept the lower rate, terminate the Santa Anita deal, or take arbitration.“In other words, Churchill Downs Technology has to abandon the millions of dollars it invested in its business in California and the rights it has under contract, or it has to proceed to a standard-less but binding arbitration,” the complaint states. “This violates the Due Process Clauses of the United States and California Constitutions.”Online Betting Grew Due to COVIDIn a letter Wednesday alerting members to the lawsuit, the organization said the law it’s invoking to seek arbitration is not new. It’s been on the books for more than two decades, the group said. It also stated the law allows both the tracks and horsemen to seek arbitration to set the fee.The TOC said it’s pursuing the action because the COVID-19 pandemic in 2020 kept fans away from the tracks. Horsemen receive a larger share of the money bet at racetracks and off-track betting parlors. According to information from the organization, 9.5 percent of the money bet at the track goes toward purses. At OTBs, it’s 6.8 percent. For online betting, 5.4 percent goes toward the purses.Betting on thoroughbred racing throughout the United States almost exclusively takes place through pari-mutuel wagering. That means money from bettors is pooled and distributed, after the track takes out money, among the winning bettors. The TOC’s charts indicate about a 20 percent takeout, and that’s based on 2015 racing data.Elsewhere in the US, takeout is slightly less, usually between 15 to 18 percent. Money for the tracks and horsemen come from that. Horsemen and tracks generally receive a smaller share from online wagering.ADW wagering in California increased by over 40% year over year statewide in 2020 while purse generation from live tracks and OTBs dropped substantially due to COVID-19 closures and restrictions,” the letter stated.It also claimed Churchill’s platforms received more than $7 million in fees from bets placed in California.TVG, Stronach Platforms Pitch In to Boost PursesThe lawsuit comes on the heels of a “purse enhancement program” the TOC created along with Santa Anita, Del Mar Thoroughbred Club, The Stronach Group, and FanDuel’s TVG. As part of the program, the TVG and Stronach online betting platforms agreed to put up to $15 million toward purses for the 2021 and 2022 racing seasons.TwinSpires has been the nation’s largest online wagering platform for racing for years. It seemed like a curious exclusion at the time of the announcemen. With the filing of the lawsuit, its absence from the program now makes sense.In court documents, Churchill Downs said TOC CEO Greg Avioli asked all online platforms to agree to a 3 percent commission rate for the 21 and 22 campaigns.“Indeed, at such a rate, Churchill Downs Technology would be operating at a significant loss, and it would make little sense to do business in California or with California residents,” the lawsuit states.Santa Anita will use the program to increase its average daily purse by 10 percent to $533,000. Del Mar officials expect their daily purses to exceed $600,000 this year, according to the TOC. The TOC and track officials expect those increases to make the southern California meets more competitive with other racing markets that rely on casino or historical horse racing to bolster their purses.
Posted on: February 5, 2021, 09:22h.
Last updated on: February 5, 2021, 09:23h.
Pennsylvania Gov. Tom Wolf (D) wants to redirect casino tax revenue from state horsemen into a college tuition assistance fund.
Pennsylvania Governor Tom Wolf says the state should bet on kids, not horsemen, and move gaming money allocated for horse racing to college tuition assistance. Naturally, horsemen deeply oppose such an effort. (Image: AP)Wolf gave his 2021 budget address this week, and while he didn’t specifically mention reallocating tax money generated by casinos, a statement on his administration’s website did.“The governor is proposing a $199 million plan to develop the Nellie Bly Tuition Program by repurposing existing dollars that are right now flowing into the Horse Racing Development Fund,” Wolf’s 2021 Legislative Plan explains.Wolf’s Nellie Bly Tuition Program would provide financial assistance to full-time students enrolled in the state higher education system, with priority given to undergrads pursuing careers in education and health care.“In exchange, students agree to stay in Pennsylvania after graduation for the same number of years for which they receive financial assistance through the program,” Wolf’s website adds.Bet on Kids, Not HorsemenPennsylvania casinos share 54 percent of their slot machine revenue with the state in the form of taxes. Of the tax money, 11 percent is allocated for the Horse Racing Industry.Wolf doesn’t believe casinos should be bankrolling horsemen. He said so as much last year.We have to make some tough decisions sometimes in politics,” the governor told his audience at Lock Haven University a year ago this month. “Are we going to bet on horses or are we going to bet on our kids? I’m going to bet on our kids.”Pennsylvanians graduate college with the second-highest debt in the nation, Wolf argues. The average student accepts his or her diploma with around $34,000 in loans to repay.The large payments, the governor contends, shouldn’t be going towards repaying loans, but instead investing in their future by way of buying homes and furthering their careers.“There are the people who are going to become our doctors, our teachers, our professors. They’re going to design our buildings. They’re going to fly our planes,” Wolf declared.The Pennsylvania State System of Higher Education includes 14 state universities across the Commonwealth.Horsemen Say End of RacingPennsylvania’s horse racing industry naturally opposes Wolf’s wishes to redirect casino money to tuition assistance.“If approved by the legislature, this raid would result in the end of horseracing in Pennsylvania by eviscerating the primary funding source for the purses and breeder incentives that serve as the lifeblood of the industry,” Pennsylvania Equine Coalition Executive Director Pete Peterson told the Paulick Report.This scheme would destroy an industry that provides a $1.6 billion economic impact and supports an estimated 16,000 to 23,000 jobs in the agriculture, manufacturing, construction, retail, and hospitality industries here in Pennsylvania,” Peterson added.In December, the Pennsylvania Horse Racing Commission signed off a shortened 2021 racing calendar, lingering impacts of COVID-19 the reason for reduced dates. The Parx, Penn National, and Presque Isle racecourses will combined hold a total of 348 racing days this year.