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A horse player can quickly scan the entries, odds and watch the next race on a single screen using software from You Bet!, which plans to offer the service to thousands of U.S. customers beginning this summer.
Online betting on horses hits home
Little fanfare as ‘high-tequine' wagering becomes a reality
By Mike Brunker
MSNBC
April 29, 1998 — The journey has been eventful, but the “high-tequine” era has arrived quietly in homes around the United States and elsewhere. Two U.S. companies already are offering wagering on horse racing via personal computer and their biggest rival plans to roll out its ambitious cable-TV-based betting system by year's end.
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Excerpts from Television Games Network marketing video show the user interface and programming samples
“WE ARE GOING into our national marketing campaign surrounding the Triple Crown and plan to have thousands of people [signed up] by summer,” said Ron Luniewski, president of You Bet! of Los Angeles, which currently has some 400 bettors in 31 states stress-testing its online information-delivery and wagering system.
Also up and running is IWN Inc. which created the software for the sports-betting and horse-wagering Internet site of New Zealand TAB. Currently in its testing phase with more than 200 customers, the service is expected to be officially launched with great fanfare shortly before soccer's World Cup begins June 10.
Hot on their heels is the Television Games Network (TVG), which plans to begin rolling out an all-racing cable-TV channel featuring interactive betting later this year in Kentucky and possibly one or two other states.
A fourth U.S. company, Vantage Group, was left at the gate when the New York Racing Association put on hold its plans to offer Internet wagering until legal questions surrounding the practice are answered.
DEBUT HAS BEEN LOW KEY
Unlike online gambling of the offshore variety, horse racing's entrance into the home has received little attention from lawmakers or gambling foes. The reasons: A clear exemption for horse racing in the federal law that bans interstate wagering and widespread support in states where it contributes to the tax base.
The exemption in the federal Wire Act only applies to states where betting is legal, but some horse-racing phone-betting services interpret that as including all of the 42 states that allow some form of pari-mutuel wagering, be it on horses, dogs or jai alai.
Numerous state attorneys general have said the practice is illegal, but so far no state has challenged the phone services, which are authorized by — and in some cases operated by — state agencies that regulate racing.
You Bet! and IWN have taken advantage of this situation by striking partnerships with existing phone services in states where “account wagering” — a system in which bettors first deposit a bankroll, then wager against it — is legal.
“We don't do the bets,”said Rob North, business development manager for IWN. “We only build systems for licensed gaming operators where it's legal.”
DIFFERENT STRATEGIES EMPLOYED
Each of the top three companies is employing a different strategy in hopes of standing in the winner's circle after the race for supremacy has been run.
The You Bet! system, which operates on a closed network rather than on the Internet, is designed to give the horse player almost all the information available at the track. The Windows-compatible software gives users the ability to peruse such information as current odds, past performances and racing programs for the racetracks that have signed agreements with the company — currently Oaklawn, Hot Springs, Ark.; the Fairgrounds, New Orleans; Sportsman's Park, Chicago; Hialeah, near Miami; Golden Gate Fields, in Northern California; Detroit Race Course and the Meadows harness racing track, in Pittsburgh. After placing a wager using an on-screen menu, users can listen to the race call or watch live streaming video of the race.
After watching its deal with the New York Racing Association collapse last year, You Bet! signed on a new partner: Ladbroke USA, the U.S. arm of the British bookmaking firm, which operates racetracks in California, Pennsylvania and Michigan and operates the Call-A-Bet phone betting service.
You Bet! and Ladbroke took their first wager via personal computer in December before beginning the limited-release test in February.
TEST PRONOUNCED A SUCCESS
“The limited release … is going better than expected,” said Luniewski, the company's president and chief operating officer. “To date, we've not had any significant problems with the system. We've not even had one small problem as it relates to the most important part of the system … the financial integrity or the information flow.”
The companies plan to offer the service to wired-in horse players beginning June 1 in all but the eight states that do not have pari-mutuel wagering. The cost has not yet been set, but it will include both a monthly fee and a connect-time charge, said Katherine Wilkins, You Bet! executive vice president for marketing.
In the case of IWN, the patchwork of state laws regulating gambling in the United States and the general resistance to online gambling prompted it to look overseas for its first deals.
The Internet-based system the Southern California company built for New Zealand TAB, a quasi-government agency created in 1950 to handle off-track betting on horse racing, has been operating since mid-November, with more than 200 customers signed on at last report and an average weekly handle of more than $11,000.
Bettors using the IWN system receive a wager confirmation after placing their wagers.
The site, which offers similar data and replay capabilities as the You Bet! software, is open to bettors in most countries who want to wager on New Zealand and Australian races and sporting events, North said. But New Zealand TAB will not accept wagers from the United States “until such time that accepting betting from US based residents is without question legal,” a representative said.
IWN also has signed a contract with New South Wales TAB in Australia, which was the first entity to accept a wager over the Internet. New South Wales TAB has a more “aggressive agenda for gaming,” according to North, including the simulcast of Australian racing to the United States and other nations. It also has reached a deal with Pocono Downs harness racetrack in Pennsylvania, but no start-up date has been set for that service pending resolution of numerous outstanding issues, North said.
POPULIST APPROACH
The company's software is “platform independent,” North said, but the decision was made to concentrate on the Internet initially “because that's where the people are.”
“In the case of a closed network, you have to force someone to log off the Internet, call a separate number and come back on just for the purpose of gambling,” North said. “Why should they have to do that?”
TVG is the new kid on the interactive block — and possibly the industry's 800-pound gorilla if it can expand what initially will be a limited marketplace. Its creators describe the music- and graphics-intensive television network as “ESPN meets CNN meets MTV” with wagering thrown in for good measure.
The service was created by the Colorado firm On Demand Services (ODS), which since 1995 has offered a TV-based watch-and-wager system in the Louisville, Ky., area.
Last year, TVG announced it had reached “strategic partnerships” with nine premier U.S. racetracks — Arlington Park (since closed); Churchill Downs, Louisville, Ky.; Gulfstream Park, Hallandale, Fla.; Hollywood Park, Inglewood, Calif.; Lone Star Park, Grand Prairie, Texas; Pimlico racetrack, Baltimore, Md.; Laurel Park, Laurel, Md.; Santa Anita Park, Santa Anita, Calif.; and Turfway Park, Florence, Ky.
ALL-RACING NETWORK PLANNED
Late this year, TVG plans to unveil its all-racing network featuring racing from its partner racetracks presented within the boundaries of a 10-hour show called “Raceday Rush.” That show will be preceded and followed by other racing-related programs, with the programming day anchored by a late-night game show/shopping/entertainment conglomeration oddly titled “All Night@Game Mall.”
The anchors of “Raceday Rush” will provide basic handicapping analysis for coming races, but TVG also has reached an agreement with the Axcis Information Network to provide past performances, speed figures and other information favored by serious fans.
Subscribers will wager using an in-screen graphic interface, but the system also can be augmented by phone or PC if necessary, said Thomas Aranson, TVG's vice president for business.
“It's kind of a mixed-platform approach,” he said. “The centerpiece of the system is a television with a special set-top box that allows you to access the wagering mechanisms.”
TVG is taking a more cautious approach to potential legal pitfalls than its rivals, and will operate only in states where account wagering is legal and where it has reached agreements with regulators. Its initial rollout will include an expansion in Kentucky and possibly entry into one or two other states, Aranson said.
GO-SLOW APPROACH
The go-slow approach is necessary because TVG will not use an intermediary to accept wagers, and could be legally liable if it were found to have violated state gambling laws. It also will have to invest in infrastructure in the areas it serves.
The network will be made available to cable operators around the country, though it is not certain how many will carry it in states where their customers will not be able to bet on the races. But Aranson said network executives will attempt to sell cable operators on the immediate entertainment value of the broadcasts, while reminding them of the potential long-term rewards if account wagering is legalized.
“It's … our belief that this entertainment package has to be put in front of the widest population possible to attract new people to the sport,” he said. “So wherever we can … we intend to show the television programming and then only enable the wagering at such time as it is legal and fully regulated.”
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