Churchill Sues Horsemen

[ponypro]

http://news.bloodhorse.com/viewstory.asp?id=44801

This is very high stakes poker now.

It doesnt surprise me that Tracknet would choose a scorched earth strategy
Their very survival is on the line and this is very consistent with the Megalomaniacal Bob Evans.

[highnote]

Now I'm no anti-trust expert but how does the following differ from the way Equibase works?

"CDI and its co-plaintiffs maintain the THG and member horsemen’s groups are violating the federal Sherman Antitrust Act in their efforts to have THG negotiate for horsemen on contracts for dividing revenues from advance deposit wagering (ADW) companies." -- (bloodhorse article linked to from above)

[Javagold]

those lying crybabies must be joking

[DeanT]

Hmmm. It is tough to pick a side. Both groups make me cringe.

[startngate]

Originally Posted by swetyejohn

Now I'm no anti-trust expert but how does the following differ from the way Equibase works?

The courts have long held a distinction between coersive monopolies and those that happen passively or on their own merit.

AFAIK Equibase didn't do anything coersive ... the DRF was financially strapped and decided it was cheaper to buy the chartcalling services from Equibase, and stopped doing it themselves.

Since they are still providing the data to outside sources, they probably won't run afoul of the govenment. If they stopped, or raised the prices to the point where the DRF, BRIS, et al couldn't stay in business then maybe.

[ponypro]

When you name individuals as "defendants" in the suit as the Churchill cowards did, you are requiring regular people to hire personal lawyers for alot of buck$. These horsemen will never ever ever forget this.
CDI is gutless and the continued bad will generated will be a monumental disaster for the entire industry. No one will ever trust CDI ever. and ever is a very long time

[NoCal Boy]

I believe it will be very difficult for a Court to issue a temporary restraining order against THG, thus requiring the horsemen to give consent. Therefore, it will take months and months to get this resolved. Also, how do you think these horsemen reps will feel when they have to retain attorneys to represent them? Regardless of outcome, do you think the horsemen will forget this action by CDI and Tracknet? The IHA is not going to be overturned here. The horsemen will still have to give its consent for a specific track, whether it be with THG or on their own.

Finally, Tracknet's own policies come into question. They charge upwards of 17% for premier signals, thereby keeping any non-Tracknet ADW out of the market. A 5-8% signal fee, plus another 7% source market fee, plus a few percent for HRTV. This was disclosed in the minutes of the Oregon Racing Commission March meeting. One could argue they are engaging in anti-competitive pricing for the 18 tracks they represent to the benefit of their own ADW's.

I still can notbelieve CDI filed suit versus THG. Win the battle (maybe???) but certainly lose the war. Will horsemen ever trust CDI anymore?

[startngate]

Pony ... it's common practice when suits are filed against corporations to include the officers or employees that the plaintiff thinks are the people that caused the problem which has lead to the suit.

It's also common for the corporation to use the same lawyers to represent them, unless the "officers" have done something illegal, or against the BOD wishes. Every employment contract I have ever signed had a clause in it that addressed it, so I'm sure they won't have to pay for their own attorneys.

NoCal ... I'm not a bit surprised by the suit. Tracks have been trying to argue for years that the IHA allows the horsemen to approve/deny simulcast agreements, but not to set prices. The issue has finally gotten big enough for someone to fire the first shot.

It will be very interesting to follow this case. Major implications for us all. Let's just hope the IHA doesn't get tossed out in the process.

[NoCal Boy]

The mere fact that the horsemen reps have to pay for attorneys will infuriate them. The money will of course come from the THG and its members, but that is horsemen money as well.

The IHA will not get tossed as this will be settled well before a trial occurs on the issue. But I do not see a TRO being granted. But who knows. They might have a sympathetic judge.

I really do not see how Churchill benefits here. Do you truly believe horsemen will act kindly towards CDI and Tracknet going forward? They will learn to live with them, but relations will be strained.

[menifee]

This is so ironic. Isn't this the same Churchill Downs, Inc. that formed Tracknet last year with Magna and would not let Youbet and TVG account holders bet the Derby? Now they are accusing the THG of anticompetitive behavior?

Is there a way to post .pdfs on this board? I will have access to the pleadings. Should make for a good read if you are interested.

The real monopoly in this industry is how the tracks and the horsemen have conspired to keep the takeout rates high for years while money from slots as poured into their coffers.

[menifee]

Originally Posted by startngate

Pony ... it's common practice when suits are filed against corporations to include the officers or employees that the plaintiff thinks are the people that caused the problem which has lead to the suit.

It's also common for the corporation to use the same lawyers to represent them, unless the "officers" have done something illegal, or against the BOD wishes. Every employment contract I have ever signed had a clause in it that addressed it, so I'm sure they won't have to pay for their own attorneys.

NoCal ... I'm not a bit surprised by the suit. Tracks have been trying to argue for years that the IHA allows the horsemen to approve/deny simulcast agreements, but not to set prices. The issue has finally gotten big enough for someone to fire the first shot.

It will be very interesting to follow this case. Major implications for us all. Let's just hope the IHA doesn't get tossed out in the process.

I am not sure how the trackmen are organized (i.e., what type of corporate entity) but their articles of incorporation or by-laws should provide for some form of indemnfication at least for the directors of the corp. The officers and employees would either have employment agreements with indemnfication provisions or the entity would agree to indemnify the employees after the lawsuit was filed. The THG may have some form of D&O insurance so they might not have to foot the bills for the attorneys.

[trigger]

Originally Posted by menifee

The real monopoly in this industry is how the tracks and the horsemen have conspired to keep the takeout rates high for years while money from slots as poured into their coffers.

One thing you can bet on is if the horsemen ever get their hands on the extra purse money via their proposed 1/3,1/3,1/3 ADW split, it will be close to impossible to ever get them to approve a future reduction in takeout...they ain't going to give it back.

[ezrabrooks]

The horseman have the right to approve distribution of signals by Statue, which would seem to weaken an anti trust claim.

[startngate]

Originally Posted by NoCal Boy

The mere fact that the horsemen reps have to pay for attorneys will infuriate them. The money will of course come from the THG and its members, but that is horsemen money as well.

The IHA will not get tossed as this will be settled well before a trial occurs on the issue. But I do not see a TRO being granted. But who knows. They might have a sympathetic judge.

I really do not see how Churchill benefits here. Do you truly believe horsemen will act kindly towards CDI and Tracknet going forward? They will learn to live with them, but relations will be strained.

I'm sure the THG was expecting to get sued at some point, so I doubt they are all that upset. In fact, they might even welcome it, since the horsemen have always believed they could set rates as part of their approval under the IHA, and would love nothing more to get a judgement in their favor.

Churchill benefits greatly with a "win" in the case. They won't care how the horsemen feel if the issue is settled in their favor. Relations are always a bit strained after suits get filed, but you are correct that they will have to learn to live with each other after the smoke clears.

TRO's are a funny thing. I have seen them granted when I thought there was no shot, and not granted when I thought they were a slam dunk. The one thing that might sway things in favor of the TRO is the timeframe to the Derby, and the impossibility of getting the suit before a judge prior to it. The financial implications to CDI of not being able to sell the entire cards are potentially huge, which the judge will have to consider.

IANAL, but they appear to at least have a "reasonable" leg to stand on for the TRO. Whether it works or not remains to be seen.

[whaynswo]

I wonder if the horsemen will drag TrackNet's anti-trust issue into this case. On one hand, it would give them leverage for their particular ADW model, but they run the risk of TrackNet being dissolved and signal fees (and revenue to horsemen) dropping as a result.