With GMST up about 12 per cent before the close today, I couldn't help but take a closer look at its prodigal, TVG, the internet racehorse wagering site.
While it's doubtful that TVG's immediate prospects have any significant impact on GMST's bottom line, it is, as has been daddy's history,deeply involved in litigation on several fronts.
The most interesting is with UBET, another publicly-held wagering site in which it has 16 per cent interest bought a few years ago for a few thousand dollars. Between them, they handled, by an unofficial estimate, some $500M in parimutuel wagers during 2003. TVG has an option to purchase 51 per cent of UBET at $2.50, subject to revision. UBET presently is about $3.20. It would cost GMST about 34-40M to get control; without any further interest, it earns several million a year by allowing UBET to take wagers on TVG's exclusive tracks, amng them Churchill Downs and NY's major courses.
TVG and UBET agreed to arbitration not long ago and a decision is expected any day now on the warrant issue as well as UBET's allegedly skewed proxy that leaned toward a staggered board that would prevent TVG from obtaining more seats.
In any event, GMST is beginning to look like a vastly different company from the horror of Henry Yuen. The website has been redesigned and TV guide magazine redesigned as well, neither of which I admit I bother to have seen.
Race horses are another story--and while overall wagering is flat, internet betting is taking a rapidly-growing percentage of the $15B wagered annually through the parimutuels, some 80 per cent of which now is wagering off-track. Only the good Lord knows how much goes to offshore sites which number in the high hundreds and don't feed through the parimutuels. |
