Operator News
US – Churchill Downs slams Pennsylvania Horsemen’s Association’s claims as a ‘money grab’
By Phil - 28 June 2021
Presque Isle Downs and Casino (PID) is taking the Pennsylvania Horsemen’s Benevolent and Protective Association (PAHBPA) to court over a continuing dispute regarding the revenue sharing of advance-deposit wagers (ADW).
The Horseman’s Association claims that over the last few years, Presque Isle Downs, owned by Churchill Downs, has been pushing on-track customers to make bets through mobile platforms like TwinSpires, which are owned by Churchill Downs Technology Initiatives Company (CDTIC), taking revenue away from the association and out of the state.
It said in earlier law suit: “Presque Isle Downs has breached and is currently breaching the Live Racing Agreement as a result of patrons located at PID placing wagers through PID’s ‘racing vendor’ and corporate affiliate CDTIC as opposed to in the racetrack enclosure at Presque Isle Downs. Presque Isle Downs has perpetuated these breaches through messages and other marketing encouraging patrons to place wagers through PID’s corporate affiliate CDTIC instead of in the racetrack enclosure, which, incidentally, also violates the Pennsylvania Horse Racing Industry Reform Act.”
However Churchill Downs has now filed its own federal lawsuit looking to stop association’s ‘unsupported allegations’ from going to court.
It said: “There is no claim to submit to arbitration under the narrow arbitration clause agreed to by the parties in the Live Racing Agreement. PAHBPA’s asserted allegations of breach are nothing more than a money grab without legal merit. Rather than raising questions as to PID’s compliance with the terms of the Live Racing Agreement, PAHBPA’s asserted allegations are an attempt to renegotiate through arbitration a long standing contractual provision, that with the benefit of hindsight and changed circumstances, they now disfavor. In essence, PAHBPA alleges that the source market fee received by PID from the collateral agreement is too low.”
The complaint added: “PAHBPA’s asserted allegations take issue with PID’s collateral agreement, but the Horsemen never negotiated into the Live Racing Agreement any consent or veto rights concerning the source market fee flowing to PID from the collateral agreement. Further, the Live Racing Agreement does not set a required rate or amount for source market fees that PID must receive from a vendor. Prior to the collateral agreement, PAHBPA received no money whatsoever from a source market fee under the Live Racing Agreement. In contrast, what PAHBPA did negotiate into the Live Racing Agreement was that if PID received a source market fee from a vendor, then PAHBPA would get a fixed percentage of that source market fee. PID has paid to PAHBPA that contractually negotiated percentage of the source market fee it receives from the collateral agreement.”
“PID does not own the majority of CDTIC. CDTIC is a separate legal entity from PID,” it added.
