05/13/2008 11:00PM

Horsemen urge unity in Churchill dispute


LOUISVILLE, Ky. - In a meeting Tuesday night to discuss the ongoing dispute with Churchill Downs regarding revenue splits from Internet and phone wagering, a coalition of Kentucky horsemen's groups encouraged owners and trainers to remain committed to obtaining a greater share of the revenue.

The urging came the day before Churchill Downs dropped purses 20 percent, citing an anticipated downturn in handle as a result of horsemen blocking the Churchill signal and wagering from several national account-wagering services and Calder Race Course.

Federal law gives horsemen the power to withhold approval for interstate betting, providing them with a key negotiating mechanism with racetracks.

Horsemen at Churchill, along with those at Calder, Presque Isle Downs, Lone Star, and Louisiana Downs, have assigned their account-wagering rights to the Thoroughbred Horsemen's Group, which is negotiating with the tracks on their behalf.

Rick Hiles, president of the Kentucky Horsemen's Benevolent and Protective Association, said, "There is no justification for a 20 percent cut," citing the track's purse account as being down less than 1 percent from its numbers of last year, when wagering was not blocked by horsemen.

Kevin Flanery, senior vice president at Churchill Downs, denied the cut was retaliatory. He said the track made the 20 percent drop in purses based on forecasts, not on handle numbers from the first two weeks of the meet, during which time the advance-deposit outlets were allowed to offer wagering on the Kentucky Derby, Kentucky Oaks, and Woodford Reserve Turf Classic because Churchill holds the exclusive rights to the signals of those races.

Horsemen want one-third of revenue, or approximately 6.75 percent of handle, from account wagering. Hiles said Churchill - which has its own account-wagering company, twinspires.com, and is partners with Magna Entertainment Corp. in a simulcast-marketing company, TrackNet, and a television network, HorseRacing TV - is offering horsemen 3.5 percent of the handle, compared with the current 3.25 percent.

Hiles said purse revenue had dropped since Churchill Downs purchased AmericaTab last year and launched twinspires.com while showing Churchill Downs races on HRTV. When Television Games Network provided television coverage and wagering on Churchill Downs races, horsemen received more purse revenue, in part because TVG paid host-market fees from wagers placed throughout Kentucky.

Twinspires.com is compensating with host fees for bets placed within 25 miles of Churchill Downs, Hiles said.

Flanery disputed that twinspires.com is shortchanging horsemen in host fees.

He said horsemen are making a mistake by blocking wagering from advance-deposit sites, one of the few growth segments of the industry.

"Our goal is not the existing pie," he said. "Our goal is the growth of the pie and to share in that growth."

Horsemen in attendance appeared united in their desire to obtain what they feel is an equitable share of the wagering revenue, although some differed as to how to meet that goal.

Ken Ramsey, a 12-time leading owner at Churchill Downs, advocated horsemen boycotting racing at Churchill Downs unless the purse cut is reduced to 10 percent or less. Churchill Downs, he said, needs to know that "these Kentucky boys have gotta little backbone."

David Richardson of the Kentucky Thoroughbred Association said that would be counterproductive, a sentiment echoed by Bert Klein, one of many prominent owners and trainers in attendance.

"If I ran Churchill and you all got together and boycotted, the first thing I'd do is shut our doors and lock you out," Klein said.

Doug McSwain, an attorney representing the horsemen, told those in attendance that a strike is precluded under the purse contract that horsemen have with the track, and that it could violate antitrust laws.

He said there are better options, including negotiation and possible legal action against Churchill Downs.

"An extra cut, with no basis and without any sense of due care is nothing but punishment," he said.

He said he was reluctant to explain potential legal action in detail, not wishing to alert the track of the horsemen's options.

Churchill Downs has already filed its own lawsuit against the Thoroughbred Horsemen's Group, alleging that the organization's actions are in violation of antitrust laws. Late on Wednesday, Churchill said that it had amended that lawsuit to include the KHBPA and KTA as plaintiffs as well.