06/10/2009 11:00PM

Colonial signal in fee dispute

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The signal from Colonial Downs in Virginia is being blacked out at all simulcast locations and account-wagering companies affiliated with a simulcast-marketing partnership owned by Churchill Downs Inc. and Magna Entertainment Corp. because of a dispute over account-wagering license fees.

Scott Daruty, the president of TrackNet, said Thursday that the blackout has been precipitated by a law that is set to go into effect on July 1. The law will require account-wagering companies to pay Virginia racetracks and horsemen 11.5 percent of every bet by a Virginia resident.

TrackNet negotiates simulcasting contracts on behalf of two major account-wagering companies, Twinspires.com and XpressBet, along with all of the tracks and betting networks owned and operated by Churchill and Magna, including those in California, Kentucky, Florida, and Illinois.

Colonial Downs started its 40-day Thoroughbred meet June 5.

Ian Stewart, the president of Colonial Downs, said that the blackout has affected the track's meet, but that the track's signal is still available on two other account-wagering companies, Youbet.com and Television Games Network, mitigating the effect.

Colonial Downs owns and operates its own account-wagering company, which takes bets from Virginia residents. The law would have little to no impact on that operation because Colonial would be paying itself.

Daruty said that TrackNet is seeking to bypass the law with an agreement that "works for everybody."