05/08/2008 11:00PM

Churchill to cut purses at home and Calder


Churchill Downs plans to cut overnight purses 20 percent across the board beginning on Wednesday, the track announced Friday, citing a downturn of business because of its inability to send its signal to several national account-wagering platforms because of a dispute with horsemen.

The purse cuts are the first announced by Churchill since the limited account-wagering blackout began with the opening of the track's meet on April 30. In addition to the cuts at Churchill, Calder Race Course - which is owned by Churchill - announced late on Friday that purses for eight upcoming stakes races will be cut, including four $100,000 races that will be slashed to $36,000 and no longer qualify for black type.

Both Churchill and Calder have been affected by disputes with horsemen since opening in April. At Churchill, the dispute is limited to account-wagering rights, but at Calder, horsemen have refused to approve the export of the track's signal to any out-of-state simulcast site with the exception of the sites operated by New York state's offtrack betting corporations until the track and horsemen have negotiated a purse contract that includes splits from slot machines at a planned casino at the track.

Officials for Churchill Downs racetrack said on Friday that the cuts at that track were made based on an assessment of the revenue that would be generated for purses if the blackout stretched throughout the year, though the officials declined to provide handle or revenue figures for the meet to date.

"We looked at where we started for the year, what our experience has been so far, and how best to manage the situation in the future," said Kevin Flannery, a senior vice president of Churchill.

David Switzer, the executive director of the Kentucky Thoroughbred Association, one of two groups representing horsemen in the state, said that Churchill had "no justification" to cut purses by 20 percent, citing figures from the first seven live race days at the meet that showed the track's handle down 2.75 percent.

"That's the best they can come up with," Switzer said. "All they're doing is saying we've got to whip these guys and whip these guys and keep cutting purses because they want to win this account-wagering fight."

Since last year, Churchill has declined to make its handle figures publicly available except in quarterly and annual financial reports.

With the exception of three Grade 1 races run last weekend, the signal for Churchill's spring meet has been unavailable to customers of Twinspires.com and XpressBet, the two account-wagering platforms owned by Churchill Downs and Magna Entertainment Corp., respectively, because of the dispute with horsemen. The dispute has also affected the availability of the signals from Calder and from Magna's Lone Star Park in Texas.

Horsemen in Kentucky are being represented in their negotiations with Churchill over the account-wagering rights by the Thoroughbred Horsemen's Group, a company formed last year to seek a higher cut of the revenues from in-home betting. Officials of the Thoroughbred Horsemen's Group have said that they will not give approval to send the signal to Twinspires.com or XpressBet unless horsemen receive one-third of the revenue from the services.

Flannery confirmed that Churchill is no longer seeking to negotiate with the horsemen's group over the signal rights, and that they have instead sought to conduct negotiations with the Kentucky Horsemen's Benevolent and Protective Association, which represents the majority of trainers at Churchill. Two weeks ago, Churchill sued the Thoroughbred Horsemen's Group, alleging that the company was violating the Sherman Anit-Trust Act.

Bob Reeves, the president of the horsemen's group, said that he has not had any discussions with officials of Churchill since the meet began, and has not had talks with officials of Churchill's simulcast-marketing partnership with Magna, TrackNet, since shortly before the Derby on May 3.

Overnight purses at Calder have already been cut 30 percent. The announced cuts to stakes races include four $100,000 stakes that will now carry purses of $36,000: the Grade 3 Memorial Handicap on May 26, the Mecke Handicap on July 4, and the J J'sdream Stakes and Frank Gomez Memorial Stakes, both on July 12. Because of the cuts, winners of the races will not qualify to have black-type stakes wins on their catalog pages.

Purses for four other stakes on the July 12 card - when Calder holds its annual Summit of Speed - will also be cut. The Grade 1, $500,000 Princess Rooney Stakes and the Grade 2, $500,000 Smile Sprint Handicap will now both be run for $400,000; and the Grade 3, $300,000 Azalea Stakes and Grade 3, $300,000 Carry Back Stakes will both be run for $250,000.