Youbet to offer 20 new signals

NEW YORK - Youbet.com, the computer-based betting operation, announced Thursday that it has opened a new betting hub in Oregon, and will offer 20 new racetrack signals.

Youbet, which is based in Los Angeles, opened the hub in conjunction with an agreement it reached in the spring with Television Games Network, the broadcast network and interactive wagering provider. The agreement will allow Youbet to take bets on 20 tracks that were previously offered only on TVG, the 24-hour betting network owned by telecommunications giant Gemstar-TV Guide Inc.

Youbet has 15,000 subscribers but officials have said the company needs 30,000 subscribers to break even. The new track signals are some of the most popular in the country, including Churchill Downs, Saratoga, Belmont, Del Mar, Arlington, Hollywood, and Keeneland.

The expansion by Youbet closely follows TVG's decision to quietly begin accepting bets from a number of new states over the past few months, including New York where offtrack betting companies licensed by the state and racetracks have dominated account wagering. TVG has been cautious about expanding into new states. In New York, there is no specific legislation allowing such companies to take bets, but a recent amendment to the Federal Interstate Horseracing Act has changed the situation.

Lobbyists with TVG and Youbet contend that the federal amendment allows account-wagering operations to take telephone or Internet bets in any state where parimutuel wagering is legal, including New York. But the New York State Racing and Wagering Board routinely approves simulcast contracts that allow telephone wagering in New York to be conducted only by tracks and offtrack betting companies licensed by the state.

Citing those contracts and state law, the board warned New York racetracks in late July that their signals could be pulled from TVG and Youbet if the companies began taking wagers in New York. The board confirmed the warning on Wednesday.

On Thursday, board officials said that they had been discussing the matter with TVG, the New York Racing Association, and others to clarify the issue before deciding whether to act on the warning.

Stacy Walker, a board spokeswoman, said that the warning was meant to enforce the simulcast contracts the board had approved.

"Those stipulations are in all the contracts, that no out-of-state companies, including TVG, can accept wagers from New York residents," she said.

Mark Wilson, the chief executive officer of TVG, said Thursday in a prepared statement that "TVG is acting in full compliance with with all applicable federal and state laws."

Underscoring the sensitivity of the issues, NYRA chairman Barry Schwartz backed off on Thursday from a remark he made Wednesday that NYRA would ask TVG to pull the association's signal if it took bets in New York.

"I think that could be a bit much at this point," said Schwartz. "I've talked to Mark [Wilson], and I've talked to Mike [Hoblock, chairman of the racing board], and the general feeling is that we should work this out."

Schwartz said TVG would need to work out an agreement with the state's OTB companies.

"The best interests are to allow TVG to take bets but to see to it that nobody gets harmed, to make sure the OTBs and everyone else don't get hurt," Schwartz said.

Both TVG and Youbet are under pressure to improve their bottom lines after losing money for the past three years. Youbet lost $41 million in 1999 and 2000 on revenues of $10 million, while TVG lost more than $90 million in the same time span.