Monday, January 30, 2006
U.S. horsemen question betting commissions

At its 2006 Winter Convention, the National Horsemen's Benevolent and Protective Association, the umbrella organisation representing owners and trainers of race horses in the United States, questioned the growing trend of trade in simulcast and associated off-track betting, which result in lower purse (prize money for race winners).

In a resolution, adopted by the HBPA executive on 24 January, the horsemen would launch a legal analysis in view of possible remedies against their loss of control over simulcast and the connected betting revenues.

The problem seems to lie in the trade in the simulcast to off-track, account wagering betting operators. The race courses sell their image rights to a single party and the existing contracts do not seem to prevent the new rights holder to resell this simulcast, or at least, when they do so, to receive adequate compensation for it.

Another problem seems to lie in the possible substitution of on-track handle, which generates around 9% of commissions back to purses, to off-track handle (based on live, simulcast images), which returns only 3% to purse.

In other countries, percentage returns to purse are usually the same for on-track and off-track bets. This is only different when bets are placed in another pool (almost always another country), when a percentage of around 3 points to the host track is usually agreed. In that case, the bets are not considered competitive as they are placed outside the jurisdiction of the local bettor.

In the United States, around 1 billion US$ is returned from betting to purses. This represents around 6.5% of total handle. He said even a 1% increase in the revenue split would add $150 million a year to purses.