TrackNet Media Putting the Squeeze on ADW's

- The impasse between Youbet and the Churchill/Magna owned TrackNet Media has now spilled into public. Seems that TrackNet is insisting that Youbet give up its TVG exclusive tracks in order to be able to carry the Derby, and Churchill/Magna tracks going forward. American TAB has already agreed to those terms.

“We had to make a decision,” AmericaTAB general manager Mike Weiss said....“We had negotiations with TVG, but they weren’t successful. We also negotiated with TrackNet Media and had to decide which way to go.” [Bloodhorse]

But Youbet is refusing to go along, and issued a blistering statement.

"Instead of the broader, more inclusive distribution formula the industry has been promised, TrackNet presented us with an unreasonable either-or scenario,” said Champion. “To carry this year’s Kentucky Derby and its other content, TrackNet wants us to forego races from, among others, Aqueduct, Belmont, Saratoga, Del Mar, Keeneland, Oak Tree at Santa Anita, Saratoga Harness, Turfway Park, Turf Paradise, and Los Alamitos. It ought to be obvious to everyone with a major investment in horse racing that we should not have to choose one content group over another when we are prepared to pay fair prices for both.

“Under these circumstances, we think the industry needs to assess the ramifications of the two most dominant content providers in our business coming together to dictate content alignment and economics by forcing choices on us and others that are sure to limit competition, thwart innovation, frustrate customers and stifle growth.” [Bloodhorse]

Youbet is reacting to TrackNet's stated goal to facilitate the broad distribution of horse racing content through trusted and reliable distribution platforms that share TrackNet’s philosophy that non-exclusivity of wagering content is vital to the future growth of domestic account wagering. [Churchill Downs press release] TrackNet Media, responding in a statement to Youbet's, declared that the abovementioned goal is exactly what they are trying to achieve here. Noting that they are in discussions with TVG to facilitate cross-licensing of their signals, TrackNet stated:

Youbet is the only large national ADW provider with a sublicense agreement in place allowing it to accept wagers on the TVG exclusive content on a going-forward basis. Youbet now seeks the right to accept wagers on TrackNet Media content as well – leaving Youbet as the only national provider able to offer its customers all major U.S. racing content. Such an arrangement would put all of Youbet’s competitors, including TVG, AmericaTAB, XpressBet and the yet-to-launch TwinSpires account-wagering service at a disadvantage, and it would unfairly penalize customers of those ADW platforms who want access to a broad range of content.

Well gee, isn't it nice of TrackNet to be SO freaking concerned about what's fair for Youbet's competitors! Excuse me for the skepticism, but this old-line liberal is naturally inclined towards the belief that bottom-line oriented public companies such as Magna and Churchill are concerned with just that, first and foremost, and that any stated altruism is to be viewed with doubt. Perhaps I'm wrong in this case, and maybe in the end we will indeed have a wide choice of wagering platforms with no restrictions on content. But in any event, the two companies are obviously using their combined clout and the hammer of the Kentucky Derby to shape the ADW industry into what their idea of what the landscape should be. I find the idea of this single entity being able to exercise this kind of control to be disconcerting.

And that's now. What happens if Empire gets the New York franchise? Their proposal states that New York's racing signal will then be turned over to TrackNet Media, and they would then have Saratoga and the entire Triple Crown series under their control. This is why Assemblyman Gary Pretlow raised possible anti-trust issues regarding Empire in the franchise hearings. Perhaps it's not only those of us in New York who are concerned about Empire's takeout increases and their highly questionable integrity who should be worried about them being awarded the racing franchise.

- Please bear with me for a couple more days, as I finish up the Keeneland meet for the Special; and I'll then be back with my usual copious posting.