04/30/2009 11:00PM

TVG agreement gives relief to bettors


A conflict between two groups of account-wagering companies that has frustrated racing fans for two years appears to have ended.

On Thursday night, Television Games Network, the largest account-wagering company in the U.S., reached a one-year agreement with TrackNet Media to offer wagering on all the tracks owned by Churchill Downs and Magna Entertainment Corp., ending a two-year stalemate that had forced account-wagering customers to maintain separate accounts in order to bet the races from the country's largest racetracks. The agreement came just in time to allow TVG account holders to bet the Kentucky Oaks and Kentucky Derby cards.

That the two sides were able to reach an agreement was somewhat unexpected. Neither TVG nor TrackNet - which is owned by Churchill and Magna - had indicated recently that their relationship had begun to thaw after two years of acrimony. However, a number of factors almost certainly influenced the two sides to strike a deal.

The first is the new ownership group behind TVG. Earlier this year, Betfair, the cash-rich online bet-matching service based in Britain, purchased TVG as a way to get into the North American betting market. The acquisition brought a fresh pair of eyes to TVG's business model, which has been based since its founding a decade ago on exclusively controlling the rights to racing signals.

Gerard Cunningham, the president of Betfair U.S., called officials of TrackNet, Churchill, and Magna "great partners" in a statement provided to Daily Racing Form. "Hopefully we can continue to grow this relationship in the future for the benefit of bettors, horsemen, owners, and the racing industry."

Some industry observers believe that TVG's business model was beginning to look anachronistic. Even some of the company's most loyal supporters, including the New York Racing Association, Keeneland, and Hollywood Park, have reached agreements with the company over the past two years that granted TVG the exclusive live television rights but also allowed the tracks to seek deals with other major account-wagering companies. Under those new agreements, the tracks immediately reached deals with TrackNet, which provides signals to the account-wagering companies owned by Churchill and Magna, twinspires.com, and XpressBet, respectively.

Finally, the general state of the economy - along with declining handle figures at nearly every major racetracks in the U.S. - eased the way to a deal. Although account-wagering handle has been the one growing segment in the stagnant parimutuel market over the past five years, those numbers have begun to fall to earth as well. Even heavyweights like TVG, Churchill, and Magna - which filed for bankruptcy in March - need every dollar they can get right now.