Horse racing board ousts Montana Simulcast Partners
By Paul F. Vang
Montana Simulcast Partners, the Montana non-profit group that has brought televised horse racing and off-track pari-mutuel betting to a number of Montana bars for almost 20 years, will no longer be providing the wagering service.
This results from action taken by the Montana Board of Horse Racing to award an exclusive license to offer televised races and betting to a new group, Montana Entertainment LLC, apparently as an inducement for the company to operate horse tracks in Montana.
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Tom Tucker
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Montana Entertainment is part of Trident Media Group, Inc., of Carlsbad, Calif. According to an on-line BusinessWeek profile, Trident Media Group “operates in the telecommunications and network television service industries…The company offers its services to gaming, hospitality and retail facilities; and various broadcast, cable, and private television networks throughout North America.” Edward M. Spector is the Chairman and founder, and other family members, Evan Spector, Ilene Spector and Eric Spector are executive vice presidents.
According to Ryan Sherman, Executive Secretary of the Board of Horse Racing, the Spector firm currently operates Wyoming Downs, a horse racing facility in Evanston, Wyo., and an off-track betting network in Wyoming.
In explaining the Board’s actions, Sherman said, “We had two applications to conduct simulcast races, and we went with Montana Entertainment. I think they have some different ideas and I think the board felt they could help us move forward.”
Sherman said there was no discontent with the services provided by Montana Simulcast Partners. “I don’t think that was the case. Montana Simulcast Partners have been with us for 17 years, but the Board wanted to try a different organization.”
C. A. (Al) Carruthers, Chairman of the Board of Horse Racing commented, “I didn’t have a vote on that, as I was chairman of the meeting, but the Board members voted 4 to 1 to give an exclusive simulcast license to the Spector firm. (Ed Spector) is trying to take over the management of the Great Falls race track, and also wants to re-start horse racing in Missoula."
Carruthers continued, "(Spector) made it pretty clear that he didn’t want to come into Montana unless he also had the exclusive simulcast rights for Montana.” Carruthers added that Spector discussed with the board his plans to increase marketing, improve TV broadcasts and otherwise improve and revamp racing simulcasts.
According to Simulcast’s website, “Montana Simulcast Partners is a non-profit corporation formed by the live race meets in the state of Montana to conduct simulcast wagering on a year-around basis in the state. By state law, 3 percent of all exotic wagers and 1 percent of all wagers must be set aside each year to be distributed by the Montana Board of Horse Racing back to the industry in the form of purses and assistance to the live race track.
"MSP has been in existence since 1989 and since then over $10 million has been generated for the live horse racing industry in the state.”
Simulcast had been operating simulcast racing in nine different Montana facilities in recent months. In February, the last full month of operation, Simulcast facilities generated a total handle of $398,258.
In a brief e-mail message on March 4, Simulcast’s manager, Tom Tucker of Billings, alerted facilities of the change.
In a phone interview, Tucker went into further detail on his views about BOHR’s action.
“I’m not going to expend a lot of sour grapes, but…” he began the conversation. “They wanted the other company to come in, and that company wanted an exclusive license. The granting of licenses usually runs for calendar years, and their granting the other company an exclusive license so abruptly is unusual.
“I don’t know that they have the power to do that, but they apparently decided that they would make the change.”
Tucker said he considered a court challenge but finally decided to pass up that action.
“It’s a (BOHR) decision. We wanted to continue, but they wanted the other company.” Still, he adds, “I’m disappointed. Montana Simulcast Partners has worked hard to generate revenues. It’s a tough way to come to an end.”
In reviewing Simulcast’s operations, Tucker explained that of total bets placed at Simulcast facilities, 1 percent goes to the Board of Horse Racing for administration. Another 3.75 percent goes to the Board for distribution to Montana’s horse racing tracks. Here he makes a significant point: “As we’re non-profit, another 2.5 to 3 percent of revenues goes to the Board of Horse Racing. On average, that all amounts to around 7.5 percent of revenues. Montana Entertainment will have a real challenge to match our performance unless they somehow are able to raise the ‘handle’ and/or increase the number of simulcast sites.”
Tucker noted a March Montana Tavern Times lead story reporting that Montana video gaming revenues declined 5 percent in the last quarter of 2008 and said that Simulcast’s revenues in 2008 were $6 million, but was anticipating a decline to $5 million in 2009.
Other players in the horse racing business are also experiencing challenges. As an example, Tucker mentioned Magna Entertainment Corporation, which operates a number of race tracks in the U.S., including Santa Anita in California and Pimlico in Baltimore, Md., site of the Preakness. Magna filed for Chapter 11 bankruptcy protection on March 5.
Tucker has other business interests, owning a company that offers software development and web page design services to the horse and greyhound racing industry. He says that two employees left the company last fall and hadn’t been replaced, so didn’t anticipate further employee turnover.
His final words in his March 4 e-mail message to simulcast sites were, “I want to thank all of you for some great years and all your hard work to support the live racing industry in Montana. Good luck in 2009.”
Trident Media Group didn’t return a phone call requesting comment on the change.
Source: The Montana Tavern Times, April 2009, published monthly by Continental Communications, 125 W Granite, Suite 102, Butte MT. 59701