11/11/2008 12:00AM

Account-wagering negotiations expand

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Negotiations on the distribution of racetrack signals to account-wagering companies have expanded to include a broad number of horsemen’s groups, the top official for a company that controls the simulcast signals for the racetracks owned by Churchill Downs Inc. and Magna Entertainment Corp. said on Monday.

Scott Daruty, the chief executive of the company, TrackNet, declined to identify the horsemen’s groups with which the company was talking, but said that TrackNet is negotiating with a “broad group” of horsemen to get an agreement to distribute the Churchill and Magna signals to the account-wagering companies they control, rather than negotiating on a specific signal with a single horsemen’s group. Churchill owns Twinspires.com, and Magna owns XpressBet, two of the four national account-wagering companies in the U.S.

“This is just for TrackNet right now,” said Daruty, “but it ultimately could be something that covered all regulated and licensed [account-wagering] companies.”

Several horsemen’s groups, including those in California, Florida, Kentucky, and Louisiana, have blocked the distribution of simulcast signals to national account-wagering companies over the past year because of dissatisfaction with the amount of revenue that goes to purses. The groups have insisted that account-wagering companies first sign a revenue-sharing agreement with a national horsemen’s organization, the Thoroughbred Horsemen’s Group, before they will allow the signals to be carried by the companies. The dispute has most dramatically impacted Churchill Downs, Arlington Park, and Calder, all of which are owned by Churchill Downs Inc.

Daruty declined to say whether TrackNet was involved in negotiations with the THG directly. However, several officials said that THG representatives visited Churchill Downs on Friday.

THG officials declined to comment on Monday.

The widening of negotiations could have an impact on the impasse over the distribution of the Hollywood Park signal. The Thoroughbred Owners of California has withheld its approval for the Hollywood signal to go to account-wagering companies since the track’s meet opened Oct. 29, citing the track’s lack of agreement with the THG.

Daruty said that TrackNet is seeking the signal rights to Hollywood Park, among other tracks, as part of a “larger agreement that covers what we control.”

Jack Liebau, the president of the company that owns Hollywood Park and the chairman of Youbet.com, said on Monday that XpressBet and Twinspires offered to pay an 8.5 percent host fee for the Hollywood signal. Liebau said that the TOC has not responded to the offer, which he said was higher than that sought by the TOC through the THG’s national arrangement. TOC officials could not be reached on Monday.

Correction: An earlier version of this article mistakenly included Illinois in a list of states whose horsemen have blocked distribution of simulcast signals to account-wagering operations in 2008. Illinois horsemen have not exercised any rights to block distribution of signals this year.