Out-of-state simulcasting for the opening five days of the new meet appears to be down signficantly and it comes as no surprise here that the signal from Colonial Downs is being blacked out at all simulcast locations and account-wagering companies affiliated with a simulcast-marketing partnership owned by Churchill Downs Inc. and Magna Entertainment Corp.

The dispute harkens back to our attempt to have all ADW companies (no taking more than $40 million a year in wagers from Virginia residents) make a fair contribution to the VHBPA’s purse account and the Virginia Breeders Fund.

Scott Daruty, the president of TrackNet, said Thursday that the blackout has been precipitated by our new law that is set to go into effect on July 1. That law will require account-wagering companies to pay Virginia racetracks and horsemen 10 percent, the Commonwealth .5 percent and the Breeders Fund 1 percent of every bet by a Virginia resident. This represents an increase over what is currently being paid – obvious enough, as the Breeders Fund currently is getting 0 percent.

TrackNet negotiates simulcasting contracts on behalf of two major account-wagering companies, and XpressBet, along with all of the tracks and betting networks owned and operated by Churchill and Magna, including those in California, Kentucky, Florida, and Illinois.
Ian Stewart, the president of Colonial Downs, said that the blackout has affected the track’s meet, but that the track’s signal is still available on two other account-wagering companies, and Television Games Network, mitigating the effect.

Colonial Downs owns and operates its own account-wagering company, which takes bets from Virginia residents.

Daruty said that TrackNet is seeking to bypass the law with an agreement that “works for everybody.”

What works for everybody is to fairly compensate the horsemen and breeders in small “import” states like Virginia. The ADW companies’ costs of doing business here are minimal and their reluctance to pay the new rates is simply an attempt to maintain or increase the company’s profits at our expense. These same companies have conducted over $100 million in ADW wagering without paying the Breeders Fund so much as a nickel so they will get no sympathy from here regarding a higher cost of doing business.

However, don’t be fooled, part of this equation is the horsemen in Kentucky, Florida, California and New York wanting a higher payment for the races they produce. Horsemen in these “export states” need to be wary of the plight of their fellow owner, breeders and trainers in “import states” like Virginia realizing that the higher costs get passed down the line from the ADW company to folks like us.

In all likelihood, this one ends up in court.