01/31/2002 12:00AM

Magna is fine tuning its television plans


NEW YORK - Magna Entertainment is pushing ahead with plans to launch a satellite-based television service for live racing using the old Racing Network.

The launch comes at a time when telephone wagering is just getting under way in California, and Magna is trying to get racetracks to sign on to its new service, XpressBet. In the past week, a Magna official said, the company has sent letters to more than 70 racetracks outlining the terms for XpressBet. Magna hopes to sign racetracks that do not already provide their races to Television Games Network, Magna's main competitor.

Ed Hannah, Magna's general counsel, said on Thursday that the tracks that received the letters "are those that we feel are prime candidates for our account-wagering system." Hannah said that Magna also sent the letter to TVG exclusive tracks, because the company "felt there was a lot of confusion about our policies and what we are doing."

Hannah would not provide specifics about the launch of the television network. Officials close to the company said the announcement of the launch could come as early as Friday.

Magna's plan for television distribution indicates that the company intends to compete on similar terms with TVG, the 24-hour horse race broadcast and wagering network that is available over satellite and cable systems in Kentucky, Maryland, and California. TVG has signed the majority of large tracks in the country to exclusive contracts, including Churchill Downs's six tracks and the tracks of the New York Racing Association.

The Racing Network was originally intended to be a competitor to TVG, but it failed to draw a broad subscription base. The network's partners - which included Magna, Philadelphia Park, and the Ontario Jockey Club - pulled the plug last July rather than make a cash investment to keep the network afloat. Officials said the network had fewer than 10,000 subscribers at the time. Break-even numbers were 65,000 to 100,000 subscribers.

The Magna letter states that the television service, which is already available to former subscribers of the Racing Network, will include two channels of live racing. One will broadcast races from Magna's 11 Thoroughbred and harness racetracks, including Santa Anita and Gulfstream. The other will broadcast races from tracks that agree to sign over nonexclusive broadcast rights.

Under the terms of the Magna agreements, tracks will receive 25 percent of the takeout from wagers on their races through XpressBet as a "host fee." The tracks will receive an additional 35 percent of the takeout if the bettor lives within 25 miles of the track. Magna calls the additional payment a "territorial fee."

Hannah said that Fair Grounds, Mountaineer Park, and Philadelphia Park had already signed contracts with XpressBet under the new terms.

Magna launched XpressBet last Friday after receiving an account-wagering license from the California Horse Racing Board. TVG was also licensed last week, setting off a scramble to sign up California bettors.

Andrew Gaughan, Magna's vice president for new media, declined on Thursday to provide handle or account figures for XpressBet since the launch. But he said that several operational problems had been solved. Over the weekend, there were some service disruptions, including two-day waits to approve new accounts.

In other developments, officials at Los Alamitos, a TVG track, said that California's new account wagering is having a marked impact on its business.

Jeff True, director of simulcasting and marketing at Los Alamitos, said that handle through TVG on the first Sunday after the network was licensed in California was $24,000, double the handle of the preceding Sunday.

"That was without any marketing whatsoever," True said. He said that he expected handle to "hit six figures within the next six months."

Los Alamitos occupies a valuable spot on TVG - at night in the Pacific time zone, when hardly any other tracks are racing live. As a result, the Los Alamitos signal has little or no racing competition, at a time when most horseplayers are home for the night.

"We think we're in a very good spot," True said.