02/21/2008 12:00AM

Deals create roadblocks for bettors


HALLANDALE BEACH, Fla. - I am a fairly resourceful gambler. I have traveled through blizzards to make a wager. I have sought betting outlets in places as remote as the Australian outback. But when I prepared to play Gulfstream Park this winter, I was daunted.

The telephone-wagering service I prefer to use was no longer taking bets on Gulfstream, as a result of a rift that has split the entire U.S. horse business. Youbet.com wasn't handling Gulfstream either, so I could no longer view head-on replays of the races - a crucial part of my handicapping - at that website. Nor could I watch the Gulfstream races live on television. I had subscribed to DirecTV because it shows the most-watched racing channel, the TVG Network, but Gulfstream was available only through the Dish Network. (It's probably easier and cheaper to change one's spouse than to change one's satellite-television provider.) So I decided to spend the winter concentrating on Tampa Bay Downs instead of the track I have followed for most of the last 30 years.

Most of America's horseplayers are encountering similar annoyances, inconveniences, and disruptions of their wagering routines. Horseplayers never expect much of the racing industry, which is usually indifferent to the needs and desires of the betting public. But even the most hardened bettors have been angered and bewildered by the sport's latest effort to alienate customers. To them, it appears that the industry's leaders got together behind closed doors and agreed on this strategy: "Let's make it as inconvenient as possible for our fans to place a bet."

Until the spring of 2007, U.S. horse racing had an efficient and customer-friendly system for distributing its product. Bettors could deposit funds with one of many account-wagering services and wager on almost all major tracks either by phone or with the click of a mouse. The sport had television exposure unprecedented in its history, with the TVG Network beaming races into millions of homes via DirecTV and local cable systems.

Last spring, the betting world changed overnight. Customers of Youbet.com and other wagering services were told they could no longer bet on tracks such as Churchill Downs, Pimlico, and Gulfstream. In order to do so, they had to open an account with another service, such as the Churchill-owned Twinspires.com, which didn't offer a full menu of tracks, either. Some prominent tracks disappeared from TVG and were available only on a less-seen network, Horse Racing TV.

Even industry insiders were discombobulated by the changes. When Richard Shapiro turned on TVG one day and couldn't find the programming he expected, he declared: "This is stupid. . . . It's ridiculous. . . . It's absurd." Shapiro happens to be chairman of the California Horse Racing Board, and he felt as exasperated as any horseplayer.

In fact, the developments in the industry have not been totally absurd; there is an economic rationale behind them. I attempted to explain the details in a dense column last year, and it is safe to say that few bettors cared about the details. They just want to know if they'll ever be able to use a single account that lets them wager on the tracks they want.

Here is the short version of what has happened: A decade ago, TVG brought round-the-clock racing coverage into American homes and signed up tracks to deals that gave TVG exclusive rights to take bets by phone or computer. (It could sublicense those rights, as it did to Youbet.) The nation's two biggest owners of racetracks, Churchill Downs and Magna Entertainment, eventually objected to TVG's power. Understandably, they wanted to control and get the maximum revenue from their own products. They formed a joint venture called TrackNet that marketed the signals from all of their tracks, and they told telephone and online betting operations to choose between them and the TVG tracks. Churchill and Magna took their signals off TVG and put them on their own Horse Racing TV.

Maury Wolff, economist and gambler, explains it this way: "It's a rational business structure for the tracks to control everything and set their own prices. In Canada, Woodbine owns everything - the track, the betting site, the TV network. Tracks in the U.S. had been reluctant to foot the bill [for a betting site and a TV network] until they realized that this is where the money is."

This transition to the tracks' control of their own product is creating the current chaos.

Since the Churchill-Magna consortium triggered this upheaval, most horseplayers view them as villains, but Scott Daruty, president of TrackNet, insisted that this is a misperception.

"I know that horseplayers are exasperated," he said, "but TrackNet and our affiliated companies are exasperated, too."

He said that TrackNet's goal is for everybody to have "broad, nonexclusive content." All tracks would be available to all Internet and phone-betting providers, and those providers would pay fees that keep the racing industry healthy. He predicted, "2008 will be the year that this problem gets solved."

At the very least, it will be the year when some changes are made. The New York Racing Association has ended its exclusive arrangement with TVG and made its signal available to all providers, which may encourage other tracks to follow suit. In California, the state's horse racing board, led by Shapiro, pressured the account-wagering service into an eight-month agreement under which they would all be nonexclusive. There is also some hope that Horse Racing TV could get its signal on DirecTV, which would give the TrackNet tracks a much larger viewing audience.

But this progress has been much too slow. With its fan base dwindling, with its national wagering totals in decline, the sport can't continue to throw up obstructions in the way of the fans who love the game and want to bet.

(c) 2008, The Washington Post