10/02/2001 11:00PM

Mid-Atlantic tracks drop Keeneland

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Ten thoroughbred tracks in the mid-Atlantic region have decided that they will not take the signal from Keeneland Racecourse because the track's recent takeout reduction will put a squeeze on their revenues.

As a result, racing fans from Virginia to Pennsylvania will be unable to watch or wager on races from Keeneland, one of the most popular simulcast signals in the country. Keeneland opens its three-week fall meet on Friday and is expected to distribute over $600,000 a day in purses while carding a stakes race every day.

The mid-Atlantic tracks, which banded together earlier this year to form a purchasing group called the Mid-Atlantic Cooperative, notified Keeneland on Wednesday afternoon of their decision, citing Keeneland's move to lower its takeout to 16 percent across the board. Although lower takeouts are praised by racing fans, simulcast receiving sites favor higher takeout rates because they provide more revenue.

Martin Lieberman, the executive director of the cooperative, said the track would be willing to take the signal if Keeneland lowered the rate it charged for its signal.

"The mid-Atlantic tracks have and will support all racing industry initiatives that increase fan and public interest in the sport," Lieberman said in an interview. "But the parties will have to share the burden. Simple math says that the guest tracks and OTBs are at risk. We view it as unfair."

The ten Thoroughbred tracks in the cooperative are Monmouth, the Meadowlands, and Atlantic City in New Jersey; Laurel Park and Pimlico in Maryland; Philadelphia Park and Penn National in Pennsylvania; Delaware Park in Delaware; Colonial Downs in Virginia; and Charles Town Races in West Virginia. Off-track

sites owned and operated by the tracks will also not take the Keeneland signal, along with seven harness tracks and their OTBs in the region.

Nick Nicholson, the president of Keeneland, said the track was "disappointed" by the decision, but he also said that Keeneland was not willing to renegotiate its simulcast rate.

"We can't give a lower rate to one track and not give it to everybody else," Nicholson said. "We think we are doing the best thing for the fans. We are not going to change."

Keeneland announced last month that it would lower its takeout to 16 percent across the board, making the track's blended takeout rate the lowest in the nation.

Fans immediately praised the track's decision, but at simulcast sites, the reception was less enthusiastic.

Because simulcast receiving sites keep the remainder of the takeout after paying the sending track, a lower takeout can significantly cut into revenues. For example, if Track A and Track B both charge a simulcast site 3 percent of handle for their signal and if Track A has a blended takeout rate of 15

percent, the site gets 12 cents of revenue for each dollar wagered. If Track B, however, has a blended takeout rate of 25 percent, the site gets 22 cents of revenue on each betting dollar.