04/12/2005 11:00PM

Betting into U.S. pools still faces obstacles


ETOBICOKE, Ontario - Woodbine's 2005 meeting opens Saturday, and while the return of live Thoroughbred racing is eagerly anticipated, a simulcast wagering issue could be the biggest story of the season.

Commingling, which would allow Canadian bettors to wager directly into U.S. pools, has long been seen as a highly desirable prospect, providing the opportunity to play into the significantly larger host pools.

Legislation passed in the United States last fall eliminated the 30 percent withholding tax, which had prevented the commingling of Canadian and U.S. pools. But David Willmot, chairman and chief executive officer of the Woodbine Entertainment Group, said the road to commingling remains fraught with perils.

"It's really a trilateral negotiation," said Willmot, explaining that the Canadian Pari-Mutuel Agency, the individual racetracks, and the individual states all must be satisfied by the arrangements.

Steve Mitchell, WEG's senior vice president and chief financial officer, is the company's point man in the commingling negotiations. He said the issue has been complicated by Canada's practice of net-pool pricing, which allows tracks to apply their own takeout rate when betting into another pool.

"Most U.S. states don't allow net-pool pricing," said Mitchell. "Some Canadian tracks want to differentiate on takeout."

Woodbine's separate-pool takeout on U.S. simulcast wagers always has exceeded the levels at the host tracks, so the change would mean a loss of revenue for Woodbine. But despite that and other stumbling blocks, WEG remains committed to pursuing commingling.

"It's something we want to do - have to do - for our customers," said Willmot. "But it will hurt our bottom line very much, betting into the lower takeout."

Commingling's larger pools and lower takeout should attract a higher volume of handle. But Willmot said that even a significant handle increase would leave Woodbine with an annual loss of about $4 million.

Wireless wagering to debut this year

Willmot also is excited about the prospect of wireless wagering, which is due to debut here this summer.

Wagering has been available on Woodbine's website since the winter of 2004, and while it has been deemed a success, the consensus is that it has simply attracted crossover from the telephone wagering services.

Wireless wagering, on the other hand, could provide a boost to handle. Willmot notes that the hand-held devices that would be used by wireless bettors enable them to wager from off-site, but he sees even more potential in their use ontrack.

"For our bigger bettors, we'll be able to give them a hand-held device with all the software already downloaded," said Willmot. "A person will be able to sit out in the grandstand with a hand-held device, watching the odds board. They can queue their bets, watching the horses warm up and watching the odds change. And, without any fear of being shut out, at 15 seconds to post, they're able to bang in the bets they want and delete the ones they don't."