A merger of two major racing enterprises may solve the industry’s problem of generating a larger payment for its simulcast product.
On Monday, Churchill Downs Inc. (CHDN) and Magna Entertainment Corp. (MECA) announced they were merging their products to, among other reasons, "enhance wagering integrity and security to address horse racing signal piracy and ensure content creators are compensated."
The two companies control all the major racing simulcasts except those generated by the New York Racing Association. Among the signals that they will be selling jointly are two Triple Crown races, the Kentucky Derby and the Preakness, as well as the signals from Churchill Downs, Santa Anita, Gulfstream Park, Calder, Laurel and a dozen other tracks.
Churchill president and CEO Robert Evans said the new alliance would result from the purchase by Churchill of a 50% interest in Magna’s HRTV network. Up until three weeks ago, Churchill’s signals were telecast by HRTV’s more successful rival TVG. A falling out developed when TVG announced an affiliation with a European company that Churchill felt competed with its own European distribution plans.
Insiders believe, however, that the problem stemmed from TVG’s insistence on a contract that included exclusivity. TVG, a subsidiary of Gemstar-TV Guide, credited these exclusive contracts with its ability to arrange cable contracts that gave it access to 20 million American homes.
Evans, the Kentucky businessman who succeeded Tom Meeker as Churchill’s president less than a year go, has made a number of changes, including the sale of Ellis Park in Kentucky, and Hoosier Park in Indiana. The company also has divested itself of Hollywood Park in California.
At industry gatherings during the past few months, tracks with attractive simulcast signals have bemoaned their ability to extract more revenue from casinos and smaller venues that use their signals for off-track wagering. The charge of 3% of wagering revenue, established by the Nevada Gaming Control Board when GamingToday’s late publisher, Chuck Di Rocco, began simulcasting racing signals to state race books more than two decades ago, has barely increased. Meanwhile, tracks that send out the live signal say costs have risen for them and the horsemen whose share in the off-track wagering pie has barely moved.
The new merger of racing giants, says Evans, "will benefit the horsemen and racetracks that together create racing content through new industry growth."
Under pressure from the Singapore government, Star Cruises Ltd. plans to sell its 25% interest in Resorts World at Sentosa Island to its partner, Genting International for a price to be agreed upon at a later date.
Singapore officials said they told Genting and Star that they had to prove they can run a clean gambling venue in order to receive a gambling license. The reference was to Macau gambling mogul Stanley Ho and his relationship to Star Cruises.
Ho and Star are involved in building a new tourist attraction called Macau Tower. Genting said it had agreed to sell its 25% stake in the project to Star Cruises, completing its effort to dissociate the company from any Ho affiliation.
THE INSIDER: Nevada Gold & Casinos Inc. (UWN) has accepted a cash buyout of $8.1 million for its 69% interest in River Rock Entertainment Authority.
The Seminole Tribe of Florida has completed its $965 million purchase of Hard Rock cafes, hotels and associated businesses from the U.K.’s Rank Group Plc.
Boyd Gaming Corp. (BYD) has closed on the acquisition of Dania Jai Alai and 47 acres of land in Dania Beach, Fla. The company plans to begin construction later this year with a grand opening of the new casino at the end of 2008.
Bally Technologies Inc. (BYI) has been contracted to install its complete casino management, bonusing and coinless solutions at six gaming locations in Panama.
Centaur Inc. has received approval from the Indiana Horse Racing Commission to acquire Hoosier Park in Anderson from Churchill Downs Inc.