Hollywood Park hopes revenue fight is near end

"I think it [a settlement] is imminent," said Jack Liebau, president of Hollywood Park.

At issue is the loss of revenue at the Inglewood track from television and Internet betting sites. There are currently four so-called advance deposit wagering companies (ADW) -- television cable site TVG and Internet sites Xpressbet.com, TwinSpires.com and Youbet.com.

For about eight years, these sites have returned between 5% and 7% of the revenue bet with them to the host race tracks all over the country.

These fees, which vary from track to track and with local and state laws, are based on the right to use the products of the track -- the racing and the signals that broadcast that racing. As racing attendance and betting handles at tracks declined in the last few years, ADW became one of the few growing revenue sources in the sport.

But as various contracts at tracks around the country began to run out, racing groups began to question the amount the ADW companies was returning, especially because their investment in the product, as well as their overhead, was smaller than that of the horsemen and the tracks.

The ADW contracts were not with the tracks, but with the various horsemen's groups in each state that had been given the right, by the Federal Interstate Horse Racing Act, to control the broadcast signals of the tracks using their horses to do business.

In California, that group is the Thoroughbred Owners of California (TOC) and its paid executive director and spokesman is Drew Couto, a horse owner from North County San Diego.

When Hollywood Park's current meeting began Oct. 29, the TOC contracts with the ADW companies had run out and, much to the dismay of Liebau, TOC did not allow Hollywood Park's signal to go to the ADW's. That meant no bettors outside of the state of California could bet on Hollywood Park races via TVG or on the three Internet sites, and Hollywood Park would lose that extra revenue.

Liebau was furious and called the ADW conflict "a cesspool."

Couto was steadfast. He and the TOC felt it was time to make the ADW companies return a larger share of their revenues to the tracks, which would then trickle down to owners in the form of larger purses on races.