Murdoch stands to profit from Davis reversal

August 20, 2001 9:06 PM
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Legislation signed by Gov. Gray Davis allowing online and phone betting on California horse races could mean millions of dollars for billionaire newspaper mogul Rupert Murdoch, according to a San Francisco Chronicle report.

Television Games Network (TVG) is the only company that offers viewers a chance to watch horse races around the country and place bets by telephone. The ruling would put the firm in a unique position with the new law.

TVG is a subsidiary of Gemstar-TV Guide International Inc., a company owned largely by Murdoch’s huge News Corp. Ltd. The network had little involvement in the legislation that opened California’s market.

However, Churchill Downs employed lobbyists, including one of Davis’ key fundraisers to help pass the new law because racetracks will get a cut of the online horse race betting. TVG has an exclusive contract with Churchill Downs to broadcast its races.

Garry South, Davis’ chief political strategist, said there was no connection between the governor’s approval of the legislation and a rumored $150,000 contribution to the governor two years ago from Fox Inc. Fox is another Murdoch holding.

Davis vetoed a similar bill last year that would have allowed online and telephone gambling on horse races, saying it represented an expansion of gambling.

TVG has exclusive rights to televise races at Del Mar and Hollywood Park in California, as well as 40 other tracks nationwide, including Churchill Downs in Lexington, Ky., and Belmont Park in Elmont, N.Y.