The announcement by
Gemstar TVGuide Inc. (GMST) that it had incurred massive losses during the
fiscal years 2000 and 2001 not only caused the stock to drop some 20% in one day
of trading but it also caused concern about one of its divisions, Television
Games Network (TVG).
For the past four
years, TVG has been attempting to establish itself as the premiere online
wagering system for the thoroughbred racing industry. Two year ago, the company
was acquired by Gemstar, the well-financed media company that immediately
announced that it was prepared to spend $100 million to grow the company.
Since its founding,
TVG has failed to turn a profit although Mark Wilson, the company’s CEO, said
recently that “we have just finished off our best quarter ever, our revenues
continue to rise rapidly and our expenses are under control.”
company’s revenues, certainly, has been the recent introduction of home
betting in California. Still, it hasn’t been easy. TVG’s chief competitor,
Magna Entertainment Corp. (MEIC), operates Santa Anita Park and was unsuccessful
in negotiating an agreement with TVG to permit the races to be simulcast over
the TVG system.
But soon, the action
in southern California will swing over to Hollywood Park, a track owned by
Churchill Downs Inc. (CHDN).Â Churchill
has an exclusive contract with TVG.