Hinsdale Fallout - Beyer/Riddell comments

[stu]

http://www.thoroughbredtimes.com/national-news/2008/December/17/Bankruptcy-could-cost-bettors-nearly-500000.aspx

Nearly a half-million dollars from hundreds of betting accounts (including Andy Beyer) is in limbo after a New Hampshire rebate shop declared bankruptcy.

[cj]

I was wondering when this would surface on the board. I heard about it a few days ago and thought it would be big news.

[rrbauer]

I don't know anything about this outfit, but the reported long delays in settlements is a major concern to me and should be to every horseplayer who is playing through an ADW bet taker. This is just one more failure of the industry; this time to insure that there is protection for its customers' money. We can't trust the trainers, can't trust the jockeys, can't trust the vets, can't trust the tote system and now we can't trust the licensed (and bonded?) bet takers to look out for our money. What's left?

[lamboguy]

i know these guys up there, they have a terrible reputation and are the scum of the earth long before this incident. this is a con job, they were told that the slot machine's were not coming to new hampshire. they sold their property, kept the business going untill they had to leave, promoted as many people as they could to put up money, and then got all they could and filed for bancrucy.
the state of new hampshire who gets a percentage of the handle for doing nothing but shaking down the race tracks say they are not resposible for the money even though they issued the license and get the percentage. this is not a simple bancrupcy, this is fraud, and as cute as these guys think they are they will wind up doing time.

for the record i lost no money and have no dealings with the hindsdale dog track. i deal with the premier turf club, and i am very comfortable with my money there, and will continue to keep it there.

also premier turf club is governed by the state of north dakota, who have the most stringent laws pertaining to this type of problem. the bottom line, what i am trying to say is that if you have your money with the premiere turf club the chance of not getting paid on your demand is 1 in 999,000,000,000.

[BombsAway Bob]

Has Hinsdale Track itself closed down? They were selling it in ADS as a Simo/Poker facility more than a dog track.

[lamboguy]

i think they sold the land to walmart or some big retail outfit. they walked into the office yesterday in concord and handed the state back their license.

but they took deposits last week. i also wonder how much money they owe ractracks for wager settlements. i trust ridell, but he did say something that i really didn't like hearing, he said that he just got settled money from a track in april last week. there is no good reason for that. they could be caught up in a cashflow problem, or they may be playing some type of ponzi scheme. i mean the race tracks themselves. desperate times make desperate people. the race tracks throughout america are over staffed, and not run to perfection.

i wonder if the players from hinsdale can go file for their "tarp money" like the banks of this country. all you got to do to get it is change the status of your business from anything to a bank. that is what the car manufactures are doing this minute. goldman sachs already did it.

[takeout]

Why don’t the payoffs from the host tracks to the ADW outlets occur instantly as soon as a race is made official? :confused:

[rrbauer]

Why don’t the payoffs from the host tracks to the ADW outlets occur instantly as soon as a race is made official? :confused:

They do....on the books. Actual money changes hands less frequently,
because we're not supposed to win back more money than we send in. Example: ADW sends in $100 bet. After takeout only $80 gets paid back and ADW has to send track $20, if $80 payout is to their client; or, $100 if not. But if an ADW has "winners" for clients then the track has to send money to ADW, not the other way around. Track drags its heels hoping that ADW players will lose next week and even out the settlement. ADW players win again. Track drags it heels again. Yada, yada.

End of meet comes. Track still owes ADW money. What is their motivation to settle quickly?

[takeout]

End of meet comes. Track still owes ADW money. What is their motivation to settle quickly?Sounds like they don’t have any. Also sounds like they need some. Isn’t there any way an ADW can make a deadbeat track quit dragging its feet? The way this industry does things never ceases to amaze.

[lamboguy]

i play with premier turf club. if i bet a race @ lets say hawthorne park, i hit the pick 4 and i win $20,000 which is possible. i call ptc up and ask for my money. they have to pay me ON DEMAND. ptc inturn calls hawthorne and hawthorne tells ptc you have to wait 6 months for the money to get credited to their account. why should the adw have to finance the host track. if the guy working at the host track gets his paycheck 10 minutes late he would have them arrested.

from my experience in life, when someone is late on paying their obligations, there is usually a problem. ridell said that in his own way yesterday. there is nothing wrong with ridell, its the host track.

ridell is probably the sharpest guy in the whole racing inustry, he is a former trainer, present clocker and part owner of an adw, and a gambler to boot. plus he gets along with management at the race tracks. he is probably the perfect guy to become the CZAR of HORSE RACING. and he is needed right now in a big way.

[Gallop58]

Re:The way this industry does things never ceases to amaze.

Just so we don't get too downbeat on racing, I would point out that the same financial loops are performed in every industry since the beginning of time. Best scenario is customer pays me today and I pay supplier in 90 days. Even with zero markup, I get to sit on the $ for 90 days earning interest. I worked at a company that did this and the actual products were often pass thru with no mark up. The best business to be in is the money business, not the product or service business....

[boomman]

i play with premier turf club. if i bet a race @ lets say hawthorne park, i hit the pick 4 and i win $20,000 which is possible. i call ptc up and ask for my money. they have to pay me ON DEMAND. ptc inturn calls hawthorne and hawthorne tells ptc you have to wait 6 months for the money to get credited to their account. why should the adw have to finance the host track. if the guy working at the host track gets his paycheck 10 minutes late he would have them arrested.

from my experience in life, when someone is late on paying their obligations, there is usually a problem. ridell said that in his own way yesterday. there is nothing wrong with ridell, its the host track.

ridell is probably the sharpest guy in the whole racing inustry, he is a former trainer, present clocker and part owner of an adw, and a gambler to boot. plus he gets along with management at the race tracks. he is probably the perfect guy to become the CZAR of HORSE RACING. and he is needed right now in a big way.


Joe Riddell is everything you mentioned and would certainly get my vote!!!!:ThmbUp:

Boomer

[Tom Barrister]

End of meet comes. Track still owes ADW money. What is their motivation to settle quickly?

The threat of legal action might be one motivation, since they're obligated to pay.

[startngate]

The threat of legal action might be one motivation, since they're obligated to pay.Unfortunately the first time a guest site sues a host site for payment will be the last time they get signal ... and the hosts know that.

[rrbauer]

The threat of legal action might be one motivation, since they're obligated to pay.

I have a better idea when it comes to threats. No attornies needed!

[karlskorner]

What I don't understand did Beyer, Bird and others leave the money there to "support the industry" as the article stated or was it the promise of bigger and better REBATES ?

[TEJAS KIDD]

If the account holders aren't getting paid, then I wonder how/if people with winning tickets and/or credit vouchers are getting paid

[cj]

What I don't understand did Beyer, Bird and others leave the money there to "support the industry" as the article stated or was it the promise of bigger and better REBATES ?

Are you really this dense? Obviously they left the money in their accounts so they would have money to bet. Not everyone bets $40, real or imagined (or seven years later changed to $40 minimum), per race.

[TEJAS KIDD]

There were times when I held over 6 figures in my ADW accounts. I never thought in my wildest dreams that it wasnt secure and could be wiped out by the adw's bankruptcy. This is setting a terrible precedent for racetrack operators. They can use our money to pay their bills? Starting to wish I learned how to play poker.

[wonatthewire1]

I wonder if any of the depositors had ever visited Hinsdale?

I stopped there a few years ago when going up to my father's in NH and it was disgusting and falling apart. I left after a few races. There would be no possible way that I would have ever left even a quarter there.

As always, buyer beware!

[vikingrob]

If the state does not require cash bonds to secure ADW customers' funds, then the state's regulations are, IMO, defective. Until New Hampshire imposes such a requirement, then there is no good reason to use any New Hampshire-based ADW operation, especially in this economy.

[stu]

If the state does not require cash bonds to secure ADW customers' funds, then the state's regulations are, IMO, defective. Until New Hampshire imposes such a requirement, then there is no good reason to use any New Hampshire-based ADW operation, especially in this economy.


Just curious,

What states require the cash bonds and which don't?

[startngate]

Since Oregon is the major licensing jurisdiction .....

(6) To ensure that the funds of an applicant's account holders will be properly held and maintained by the applicant:

(a) The applicant must provide evidence to the commission that the applicant has established an account with an FDIC insured bank in which all funds of its account holders will be deposited (the Bank Account):

(A) No hub shall use the funds deposited in the Bank Account for any purpose except to facilitate the wagering activities and other instructions or agreements of account holders. The funds of an account holder held in the Bank Account shall remain the property of the account holder for all purposes until wagered by the account holder or otherwise withdrawn or used in accordance with the account holder's instruction or agreement;

(B) The hub shall maintain a record of each deposit, withdrawal or other use of funds held in the Bank Account for each account holder (the Customer Record);

(C) Any account holder, who claims that any credit or debit to his or her Customer Record is incorrect or who claims that any deposit, withdrawal or use of the account holder's funds is incorrect, may file a claim with the commission. The commission shall investigate all claims and provide the hub with an opportunity to respond to such claim. The hub may submit any information, documentation or other evidence supporting its position with respect to the claim. If the commission determines that the Customer Record is incorrect or that any deposit, withdrawal or use of an account holder's funds was incorrect, the hub shall have 10 days to correct same as instructed by the commission. Such correction may require the hub to correct the Customer Record for the account holder, to deposit additional funds into the Bank Account for the account holder, to remit funds directly to the account holder, or any combination thereof.

(b) The applicant must provide a $50,000 irrevocable bond, letter of credit, or other security instrument to the commission, in a form acceptable to the commission, which designates the commission as the beneficiary thereof (the Security Instrument). The Security Instrument shall permit the commission to make draws to cover such amounts as the commission finds is necessary. For example, if a hub fails to deposit funds into the Bank Account for an account holder or to remit funds directly to the account holder, as described in subsection 6(a)(C) above, within 10 days of the commission's decision, the commission may draw down on or take other appropriate action against the Security Instrument to ensure the account holder is immediately made whole.So they do ... sort of.

IANAL, so I don't know if this would actually protect the customers should a bankruptcy occur beyond the first $50,000 which the Commission would be able to get by calling in the bond. I think the part is where it says the money in the bank account is the property of the account holders probably covers it, but again IANAL.

This assumes that the ADW's are in compliance, and I would have to believe the ORC conducts periodic audits to verify.

[highnote]

This assumes that the ADW's are in compliance, and I would have to believe the ORC conducts periodic audits to verify.


Conducting audits is fine as long as they use someone more reputable than say, an Arthur Andersen type or the guys Bernie Madoff used.
:bang:

[rrbauer]

Since Oregon is the major licensing jurisdiction .....

So they do ... sort of.

IANAL, so I don't know if this would actually protect the customers should a bankruptcy occur beyond the first $50,000 which the Commission would be able to get by calling in the bond. I think the part is where it says the money in the bank account is the property of the account holders probably covers it, but again IANAL.

This assumes that the ADW's are in compliance, and I would have to believe the ORC conducts periodic audits to verify.

If the organization takes the customers' money out and spends it on non-customer directed goods and services, then the dough ain't there no mo! Getting money out of a bankrupt firm for an individual is like getting liquid out of fruits and vegetables, namely dry lemons and turnips.

The money is history. Lesson learned?

[startngate]

Hence the words ... "sort of".

The difference I see here as opposed to the Hinsdale case is that it would appear the funds are considered to still be the account holder's as opposed to the ADW's. Again, IANAL, but I would think this might help keep the account holders from being at the back of the bus as they are at Hinsdale.

Of course, you are correct, there has to be some money left to distribute.

At one time YouBet had something along the lines of a trust account for the customer's funds. Don't know if they still do it, but that would probably be the safest thing for the account holder. And a pretty good marketing idea to promote.

[cj]

Hmmm...all these years I've been told how dangerous it is to have money in an offshore account. You may never see it, so "they" say. Guess it isn't really safe onshore either.

[highnote]

Hmmm...all these years I've been told how dangerous it is to have money in an offshore account. You may never see it, so "they" say. Guess it isn't really safe onshore either.


Ask Ernie Dahlman. Has he gotten his money from NYRA, yet?

[InsideThePylons-MW]

Hmmm...all these years I've been told how dangerous it is to have money in an offshore account. You may never see it, so "they" say. Guess it isn't really safe onshore either.

The legal licensed ADW's have been 100 times more deceitful, untruthful and pure evil compared to the supposed dangerous offshores in my experience.

[Nets]

Just wondering. For those of you with substantial amounts of money involved in betting the horses (a group I am NOT part of), what will you do? Spread the money around different ADW's and hope they don't all tank at the same time?

[BombsAway Bob]

The legal licensed ADW's have been 100 times more deceitful, untruthful and pure evil compared to the supposed dangerous offshores in my experience.
:confused: care to elaborate?

[classhandicapper]

Personally, I think this is huge blow to horseracing here.

To me, player's funds should clearly not be commingled with operating funds and have absolutely nothing to do with bankruptcy issues. Anything less, and you have to be crazy to keep serious money anywhere because the finances of these places are almost never transparent.

Seriously, the level of stupidlity rampant in this industry is mind boggling. It's like someone went around the world and collected the all dumbest people on the planet and they took over horseracing.

That was a "potential" issue at some of the poker sites in the beginning, but the bigger ones immediately set it up so that player accounts were seperate from operations etc.. and removed that risk. Then players felt more comfortable keeping large sums in action.

[Imriledup]

How can Hinsdale go bankrupt? They just flick on a few lights and accept bets and get a percentage. I don't know what kind of overhead they can possibly have to offset all the money they are making from these handful of big players who are obviously betting thousands per race and tens of thousands per day.

Unless they just didn't have enough customers and those players all got crushed at the same time and just stopped betting.....so, Hinsdale's players lost tons of money and the host tracks all needed to be reimbursed? Normally, you would think that since most of the hinsdale players are big bettors that they are at least mildly successful. If they are mildly successful, how do they owe La Downs, Laurel, etc thousands of dollars? With all these winning players, those tracks ought to owe THEM money.

Also, i see that they are saying they owe 185k to United Tote. How is THAT possible? How does the tote company get owed this kind of jack.

[rrbauer]

How can Hinsdale go bankrupt?

You can't count the ways that liabilities can grow beyond assets when you aren't taking care of the assets.

[Frank Angst]

As always, thanks for reading.

If still interested, there is a somewhat different story on all of this, looking a bit more at the regulation end of things, in the December 27 magazine.

[Enigma]

My off-shore account was closed due to USA regulations, bang goes my 7.0% rebate. I open an AWD account with a 5.0% rebate then I read that AWD's are receiving cash owed after an eight month delay, oop's I see a cash flow problem. This morning I closed my account, I will now drive 40 miles to an Indian Casino to place my wagers...okay! no rebates, however, I get paid the same day I wager and I can sleep at night.