Just about everyone in the thoroughbred business agrees upon the sport's best chance for revitalization: betting from home. But the development of "account wagering"--via phone, computer or interactive television--is proving difficult.
The fight over potential revenues has created sharp divisions within the industry. And the conflicts are threatening to alienate the sport's customers. As a result, racing is at a critical juncture.
Joe De Francis, president of Laurel and Pimlico, offers this assessment: "Account wagering is the single largest issue facing the industry. The question is whether the industry can actually [develop home betting] in a logical manner, in which case it will catapult us back into prominence. Otherwise, it's going to be a mess that sets the industry back."
Those of us who frequently bet from home are beginning to fret that this potentially wonderful development is, indeed, turning into a mess.
The politics of this issue are rather complex and so, for the benefit of casual fans, here is a brief outline of the plot to date:
Telephone betting has been pioneered principally by tracks in Pennsylvania, where it is legal to accept wagers from out-of-state customers. A Marylander could stay at home and wager on races at Laurel through a service such as Ladbroke Call-A-Bet; he could even sit in the Laurel clubhouse and bet from a cell phone. The Pennsylvania interests sought to enhance their business by developing the Racing Network, which brings live races to customers who purchase a special satellite dish. But most tracks felt that they were getting short-changed by the phone-betting services. The tracks and their horsemen are putting on the show, so why should a Pennsylvania harness track owned by a British company get most of the revenue from account wagering?
However, many industry leaders embraced the plans of Television Games Network (TVG), which offered a division of revenues that is very generous to the participating tracks.
Backed by heavyweights in the telecommunications industry, TVG promises to bring racing into the home on mainstream cable networks. TVG signed exclusive deals with most of the nation's top tracks and entered into an alliance with the National Thoroughbred Racing Association. It launched its own phone betting service last fall, promising a slice of the profits to the NTRA, which is counting on TVG to lead the sport into a bright new era.
Except in a few states where phone betting is explicitly legal, much account wagering took place in a gray area of the law. After a California-based company, You Bet--which pioneered betting via computer--began advertising aggressively for customers, California authorities cracked down and halted phone betting coming from outside the state. Texas followed suit with a similar prohibition.
"Market access is now our key issue," said NTRA spokesman Chip Tuttle. "The product is there; the technology is there. From TVG's point of view, access into states such as California and New York is the next major step."
But TVG's ambitions have created conflicts within the industry. The network has signed most major tracks to exclusive deals; they can't show their races on any competing channels, and phone bets on their races must be taken by TVG's wagering hub. This is a logical business plan. As it spends millions of dollars to produce its telecasts, TVG doesn't want customers to watch the Aqueduct races on its network and then call Philadelphia Park to bet on them. The customers, however, may have a different view of the situation.
I got my first taste of the conflicts within the business a few months ago, when I called my phone-betting service to make a serious wager on a race at Santa Anita and was told, "Sorry, we're not allowed to take Santa Anita anymore." Marylanders who wanted to bet Gulfstream's races by phone with a Pennsylvania account were told that, as of Jan. 3, Pennsylvania could no longer take bets on Florida from customers in Maryland, Kentucky and Oregon. (This is the result of the tracks' exclusive deals with TVG.) But if a Marylander wants to bet Charles Town or Philadelphia Park, he'll need another phone betting service, because these are not TVG tracks.
"Every gambler I know thinks this is absurd," remarked Maury Wolff, a gambler and racing economist. "Whenever you pick up the phone, you're afraid you don't know the new rules of engagement."
Horseplayers don't want placing a bet to be a hassle. They don't want a system that forces them to establish different accounts to play different tracks. And they don't have to accept what the U.S. racing industry offers them. There are now innumerable offshore gambling operations soliciting business with ads in the Daily Racing Form and others sports publications. They are going to make account wagering easy for their customers even if the U.S. racing industry doesn't. When money is bet with the offshore operators, tracks and horsemen get nothing.
So what are the leaders of American racing to do? There is no obvious resolution to the conflicts among the parties involved in account wagering, and so they are likely to continue fighting each other. But if they ignore what the customers want--a frequent occurrence in the sport--they're all going to be losers.