Stan Bergstein's Daily Racing Form columns

With permission of Daily Racing Form,  Stan Bergstein’s bi-weekly columns for that publication will appear here every other week. 

December 27, 2005

Youbet's rebate cat out of bag

A new breed of big cat is prowling the parimutuel plains and prairies of North America.

It has big paws and three heads, but it is not a bigfoot.

This one is real.

With its acquisition of United Tote, Youbet.com has created a new animal for the parimutuel zoo.

Chuck Champion, refashioning Youbet.com into an entirely new creature, soon will have, under one roof, an online betting service; an off-shore-onshore rebate shop; and a tote company supplying a large number of racetracks in North America.

This accomplishment, pulled off in less than a year, represents a new entity, one that tracks and the industry will have to live with and react to in the months ahead.

Part of the industry already has reacted. Woodbine Entertainment reaffirmed that it will not allow Youbet's International Racing Group, the offshore-onshore rebate shop that now has a U.S. foothold through Oregon's hub system, to use Woodbine's major Thoroughbred and harness signals. David Willmot, the chairman and CEO of Woodbine, who speaks as clearly as anyone in world racing, explained why.

"We, as an industry," Willmot said, "cannot afford to continue to legitimize these non-racetrack rebate operations. Our long term success depends on a significant reinvestment in the racing industry, which is something that these organizations do not deliver."

Steve Mitchell, Willmot's senior vice president and CFO, said the effect on handle of barring the rebaters has been "inconsequential," and that Woodbine has been able to recoup that lost handle and more.

Champion sees it differently. He said he thinks Youbet is creating new players for the game, not simply redistributing the play of those already there.

There has been much talk in racing about this - the expense of bricks and mortar and maintenance as opposed to ethereal technology. Now, Chuck Champion's vision soon will be operative. Discussion on this topic should be lively at the upcoming Racing Congress in Las Vegas in February

Elsewhere in the jungle, Great Canadian Gaming Corporation begins a year of operating four new tracks across Canada. In Quebec, a skilled financial planner, provincial senator, and highly successful developer, Paul Masicotte, takes over the privatization of four tracks in that province, with a deeply funded program that could establish Quebec racing as a major purse provider and revitalize its breeding industry.

But as a new year dawns, with new players and games and situations to contend with in Canada and the United States, racing still faces a huge unsolved problem: the disappearance of media coverage.

This problem also will be discussed at the Congress, by a panel of some of the best media minds in racing. No one expects, or should, that the problem will be solved there, but at least the industry will have the benefit of the thinking of seven or eight of the most successful practitioners in print and broadcast media. The speakers include executive editor Charlie Leehrsen of Sports Illustrated; Bill Nack, the word artist who was a longtime SI writer; Jay Hovdey, perhaps the best writer turning out a regular racing column today; Jay Privman, national correspondent of the Daily Racing Form and a television commentator; Gary West, the intellectual racing writer of the Ft. Worth Star-Telegram; and Dave Johnson of ESPN and stage and screen, moderating. The panel, incidentally, is called Life, Death, and Resurrection, with the discussion focusing on the decline of coverage and what might be done about it.

There may be no magic buttons to push, but horse racing - having let television slip by - cannot afford to give up print media without a fight. There simply is no way to get people to go to racetracks if they can't read about racing in their local newspapers or see it on their local television stations, as in New York City. If you live there and read the Times, you would not know The Meadowlands exists nine miles from its office, and would have to read carefully to learn much of anything about Belmont or Aqueduct either, except on their biggest days.

The Boston Globe, the Times-owned newspaper that recently cut race entries and results from its pages, has shut off much of New England from that information, and its sports editor, Joe Sullivan, will try to explain why at the upcoming Congress.

Racing had better listen carefully, and make notes. If it loses this fight, it will be wandering in the wilderness, with all those hungry new cats surrounding them.