04/07/2017 11:35AM

Horsemen halt TwinSpires from accepting bets at California tracks

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Thoroughbred horsemen in California have withdrawn their consent for TwinSpires.com to accept bets on races at state racetracks from California customers, citing their dissatisfaction with the company’s compliance with monitoring account wagers made on-track in the state.

The Thoroughbred Owners of California announced the decision Thursday afternoon at a meeting of the California Horse Racing Board at Golden Gate Fields. That would seem to indicate that California customers of TwinSpires, which is owned by Churchill Downs Inc., would be unable to use their accounts to bet on California races Friday unless an agreement between the two parties is worked out.

Greg Avioli, the chief executive of the TOC, said Friday morning that the organization intended to block TwinSpires from accepting the bets covered by the withdrawal as of Thursday afternoon. However, he said, TwinSpires continued to allow its California customers to bet on state races after the permission was withdrawn yesterday, and, as a result, it has filed a complaint with the CHRB

“We notified [TwinSpires] again last night that we had withdrawn our permission, so we have sent a letter to the CHRB,” Avioli said. “We think they have violated state and federal law.” State and federal racing statutes provide horsemen with the right to approve betting on simulcast wagers.

The dispute centers on a directive issued by the TOC in December requiring account-wagering companies to pinpoint the location of a customer when the customer places a bet, using geo-location technologies on the customer’s smartphone. The directive was designed to trigger higher revenue splits for tracks and horsemen when an account-wagering customer made a bet while physically located on a track’s grounds.

A TOC statement issued Thursday said TwinSpires had not completely complied with the directive, despite extensions granted by the TOC through mid-March. The statement also noted that TwinSpires’s major competitors had complied fully with the directive, though those companies also needed extensions to the original timeline.

“The last thing we want to do is inconvenience the customer, which is why we have worked diligently with the [account-wagering] providers and have granted multiple extensions for compliance,” the statement said.

TwinSpires released a statement late Thursday night that characterized the dispute as involving a “technical change” requested by the TOC. The statement said that it expected to implement the change within the next “24-48” hours. 

TwinSpires refused to comment Friday morning beyond the released statement, which also said that the company believes it is still in compliance with the TOC’s demands despite the organization’s complaint.

“Bottom line, TwinSpires is complying with our geo-location agreement with TOC and we expect TOC to comply with their contractual obligations as well,” the statement said.

Avioli said that TwinSpires had used similar language in its response to TOC about its decision to continue to allow California customers to wager on state races yesterday. However, he said, the company’s justification was “irrelevant” because of the wide latitude granted to horsemen over simulcasting under the federal Interstate Horse Racing Act.

“Whether they believe they are compliant is irrelevant,” Avioli said. “They no longer have permission to take those wagers.” 

Mike Marten, a spokesman for the CHRB, said Friday afternoon that the commission was reviewing the TOC complaint.

“The CHRB legal staff is in the process of determining the proper course of action,” Marten said. 

Many horseplayers prefer to use their wagering accounts to make bets on-track because it allows them to avoid mutuel lines and to take advantage of account-wagering companies’ handle-based player rewards. However, on-track bets placed through the windows typically provide more revenue to horsemen than wagers placed through account-wagering companies, leading to disputes between the companies and horsemen about the proper distribution of revenue from the account-wagering bets placed on the track grounds.

Some tracks, such as Keeneland and Gulfstream, have attempted to mitigate the problem by funnelling on-track customers to track-branded mobile apps that have all the same capabilities as account-wagering operations, including a variety of deposit and withdrawal options. Those apps treat wagers as on-track bets for revenue purposes.

Most prominently, TwinSpires has used geo-location technology at the flagship track of its parent company, Churchill Downs in Louisville, Ky., to protect horsemen’s share of on-track betting and guard against the perception that the parent company is attempting to push customers toward a method of wagering that benefits the company at the expense of horsemen. The track attracts massive crowds on Kentucky Derby Day and Kentucky Oaks Day, and handle on those two days generates an enormous amount of the purses that are distributed during the track’s three annual meets.

The parent company of Santa Anita and Golden Gate, The Stronach Group, is also in a similar situation as Churchill Downs Inc. in regards to its mutual interests in the account-wagering market. In addition to its racetrack holdings, which also includes Gulfstream Park and Maryland’s two Thorougbbred tracks, The Stronach Group owns XpressBet, a major account-wagering company.