07/06/2008 11:00PM

Ellis owner gives in to get a deal done

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LOUISVILLE, Ky. - The resolution to the account-wagering issue that will allow Ellis Park to run its 2008 race meet is for this year only, but the deal is one that horsemen and owner Ron Geary are hoping can be refined into a model for years to come.

Rick Hiles, president of the Kentucky division of the Horsemen's Benevolent and Protective Association, said the deal, in which Geary has agreed to pay nearly one-third of the takeout toward purses, essentially is a partnership that eventually will seek to reduce the share taken by account-wagering companies and "give an equitable share to all three parties involved in the equation."

Following several tense and tumultuous days, an agreement was struck Saturday afternoon, the day after Ellis originally was scheduled to open. Ellis, located in Henderson, Ky., will begin its meet Friday with a 10-race card that starts at 12:40 p.m. Central.

The blended take in Kentucky racing is nearly 20 percent. The deal with Ellis gives roughly 6 percent of gross takeout on account wagers to the horsemen, or nearly the one-third they have demanded since the issue came to the forefront in April at Churchill Downs, which closed its 52-day spring meet Sunday. Wagering on Churchill races through major networks such as XpressBet and Twinspires was not taken throughout the meet because the track and horsemen could not reach agreement on handle splits.

Geary said there are 10 account-wagering companies, including XpressBet, Twinspires, and TVG, that will take Ellis races. Individual contracts with all of those companies already had been finalized prior to last week. Geary said that in some cases he will not receive from those companies the 6 percent that he now has agreed to give horsemen this year, so he is basically conceding the track's share of account-wagering revenue in those cases.

With Ellis races scheduled to be shown on both racing networks, TVG and HRTV, Geary is hoping the exposure will help to fuel a favorable cycle of bigger fields, bigger handle, bigger purses, and a better racing product, thereby increasing his profits from other wagering sources and minimizing his overall losses. Geary said he probably will lose money on Ellis again this year. According to court papers filed last week, Geary said he lost $2.7 million on Ellis last year.

Hiles said the ideal model is one that would give one-third of takeout apiece to horsemen, tracks, and the account-wagering companies. However, Churchill has insisted it cannot make its own site, Twinspires, profitable under such a model.

In the case of Ellis, Geary said that he would get about 12 percent from the account-wagering companies under Hiles's scenario, about twice as much as he now receives, and Ellis would divide that 12 percent equally with the horsemen.

"It's not the horsemen versus the racetracks, as a lot of people perceived this Ellis situation to be," said Hiles. "It's a matter of us getting the account-wagering companies to come down on what they say they need to have."

In the Churchill case, negotiations for horsemen have been handled by the Thoroughbred Horsemen's Group, while Churchill is being represented through its simulcast-marketing partnership, TrackNet Media. Negotiations in the Ellis case involved only Geary and the HBPA.

Meanwhile, with the first five days of the 44-day meet lost, Ellis racing secretary Dan Bork said extra days or races could be added before the meet ends Sept. 1. For now, racing will be conducted on a five-day-a-week basis (Wednesdays through Sundays) as originally planned.

Geary, the Louisville businessman who bought Ellis from Churchill in September 2006, announced the closing of Ellis on July 3, the day before the meet was to open. The abrupt closing was in response to horsemen withholding their permission for Ellis to send its signal to account-wagering outlets. The previous day, a U.S. District Court judge in Owensboro, Ky., denied a request for an injunction that would have allowed Ellis to offer account wagering on its races.

Geary had said a purse cut might be necessary if he gave in to the horsemen's demand for their share of account wagering at Ellis, but Bork said no such cut is planned. Bork has estimated a per-day purse structure of about $150,000.

Geary estimated that about 5 percent of total handle on Ellis races in 2007 came from account wagering, but that in 2008 the figure could be as high as 10 to 15 percent. Account wagering is the only real growth segment of an otherwise stagnant wagering market in horse racing.

The Saturday announcement ended a grueling few days that rocked the Kentucky racing industry, as well as Henderson and its surrounding communities. Ellis, built in 1922, has operated a race meet every year since 1925.

The meet highlight, the Grade 3 Gardenia Stakes, is scheduled for Aug. 16. The first of 11 stakes comes Saturday with the $50,000 Audubon Stakes for 3-year-old fillies on turf.

Ellis was scheduled to resume its imported-simulcast operations Wednesday after having suspended them since July 3.