What's bet on Derby in Vegas, stays in Vegas

Churchill Downs Inc. and Nevada casinos remain dead-locked in a longstanding dispute over the company’s simulcast signals, but race books in the state were given authorization last week to offer fixed-odds bets on this Saturday’s Kentucky Derby, in defiance of Churchill’s demands.

Last Thursday, the Nevada Gaming Commission approved amendments to the state’s gambling rules that will allow race books to offer bets on “nationally broadcast races,” which will include this year’s Derby. The betting rules had previously only allowed for betting on races in which the books received information from “licensed disseminators,” a reference to bet-processing suppliers affiliated with the national parimutuel network.

As a result of the commission’s actions, race books are currently planning to offer fixed-odds bets on the Derby and Friday’s Kentucky Oaks, somewhat good news for the state’s handicappers. The bad news is that the fixed-odds menu will be limited and that exotic payoffs will be capped.

The dispute between Churchill Downs Inc. and the race books goes back 18 months, after a contract between the company and the Nevada Pari-Mutuel Association expired. Neither side has budged on its demands, and the race books have continued to offer signals from other racing companies without Churchill’s signals on the screens.

Last year, just before the delayed Derby, the Nevada Gaming Commission approved similar amendments, but the approvals expired after the race was run. According to the Las Vegas Review-Journal, the amendments passed last week do not expire until July 2023, “to enable interested parties to lobby the Nevada Legislature for changes in statutes involving the information dissemination issue.”

Churchill objected to the decision by the gaming commission, according to the Review-Journal, with Churchill general counsel Brad Blackwell stating in a letter that the company would “reserve all rights to pursue claims against an unauthorized user” of its race signal under a claim that the books would be allowed to “profit unfairly off the efforts and rights of others.”

Churchill did not respond to multiple requests for comment this week on the Nevada situation.

Nevada books used to pay heavily discounted rates on simulcast signals due to the size of the market in the state. However, that market has dwindled over the past 20 years, and racing companies like Churchill are increasingly attempting to get the books to pay rates equivalent to other offtrack betting companies that do not have obligations to horsemen. The books have balked, contending that their policies of offering complimentary drinks and past-performance data represent a different business model than other bet-takers.