11/30/2011 4:17PM

Gulfstream, Tampa Bay signals focus of dispute

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A stalemate in negotiations over the simulcast rates paid by Canadian parimutuel outlets is jeopardizing the Canadian importation of signals from Florida’s Gulfstream Park and Tampa Bay Downs, which both open on Dec. 3, according to officials involved in the negotiations.

Woodbine Entertainment Group, which controls the import of simulcast signals for all pari-mutuel outlets in Canada, including account-wagering operations, has been unable to reach a deal on the signals controlled by Monarch Content Management, the simulcasting services company set up last year to market the signals from tracks owned by the Stronach Group and other tracks, including Tampa Bay Downs. The stalemate revolves around an increase in the rates paid by the Canadian outlets, according to Scott Daruty, the president of Monarch.

Monarch is demanding that the Canadian outlets pay a higher rate for the signals than under previous contracts, but the increase would “only bring the Canadian sites in line with every other outlet in North America,” Daruty said.

Officials of Woodbine did not return phone calls on Wednesday afternoon. An agreement would likely need to be reached by Friday for the signals to be available on Dec. 3 because of the requirement that simulcast contracts be approved by Canadian regulators.

Over the past five years, rates for simulcast signals that go to account-wagering companies and offtrack sites have been pushed steadily upwards by selling conglomerates like Monarch and Churchill Downs, to reflect the higher share of revenue those outlets retain on wagering compared with live racetracks, which have to share revenue with horsemen. Daruty said that Woodbine has been paying a flat rate for the signals, regardless of where the signal is being bet, and that the increase would compensate for the growing share of wagering made by Woodbine’s account-wagering customers.

“In Canada, Woodbine operates all the [account-wagering businesses] and it’s still buying signals at the rate for live tracks,” Daruty said. “We just don’t think that’s enough.”

Gulfstream Park, which is owned by the Stronach Group, is one of the most popular simulcast signals in the United States during the winter. The track is opening its meet one month earlier than usual this year.

Over the past decade, the signal from Tampa Bay Downs has steadily attracted more and more wagering dollars in the simulcast market, largely because of full fields and an abundance of grass racing, to the point where the track has become a major player on the national stage.

According to several officials, Canadian outlets provided approximately 10 percent of the simulcast handle for both tracks over the last several years.

If negotiations are unsuccessful, a prolonged stalemate could affect the Canadian importation of other racetracks whose signals are controlled by Monarch, including Santa Anita, which opens on Dec. 26.

Kent Stirling, the president of the Florida Horsemen’s Benevolent and Protective Association, said that he believed Monarch was justified in asking for a higher rate, and he said he believed the impact of a blackout in Canada would be negligible.

“Canada is a big market, but we’ve got a lot of big markets,” Stirling said.