By Dan Ross
The Arizona racing industry is now well into month two of the simulcasting stand-off between an arm of The Stronach Group (TSG) tasked with distributing the company’s signal and the Arizona Department of Gaming. In a leveraging bid, the Arizona Horsemen’s Benevolent and Protective Association (HBPA) this week voted to withdraw the Turf Paradise signal from all Stronach Group affiliates.
According to a letter from the Arizona HBPA to the Arizona Department of Gaming dated Mar. 11, such a move would involve the following TSG-affiliated entities: Santa Anita, Golden Gate Fields, Gulfstream Park Racing and Casino, Laurel Park, Tampa Bay Downs, Monmouth Park, Rosecroft Raceway, Meadowlands, X-press Bet and all other Monarch-represented tracks and Monarch-affiliated entities or outlets.
In the letter, the board asks the department to enact the ban “immediately.”
According to Bob Hutton, president of the Arizona HBPA, the board had tried to negotiate an agreement with the various stakeholders involved in the dispute–which included a February meeting with the Thoroughbred Owners of California (TOC)–but to no avail.
“It’ll probably hurt the Arizona purse account, but it’ll also include some pain for others,” said Hutton.
A spokesperson for the Arizona Department of Gaming explained that they had received the letter only that morning, and as such, were unable to comment at this time. However, an official statement will be issued within the next few days, the spokesperson added.
In a text message, Monarch’s president, Scott Daruty, wrote, “This is another example of the Arizona racing industry shooting itself in the foot. Hopefully the various members of the Arizona racing industry will eventually be able to work out their differences. Until then, Monarch will continue to look out for the best interests of the racetracks and horsemen that we represent across the country.”
The TDN reached out to Vince Franzia, Turf Paradise general manager, but didn’t hear back before deadline.
The issue surrounds a state law passed last year requiring all simulcast providers that send their races into Arizona to offer the products uniformly among all tracks and all their Off-Track Betting parlors (OTB). In January, the Arizona Racing Commission passed a motion requiring the three racetracks in the state–Turf Paradise, Arizona Downs and Rillito Park–to comply with that law.
The same day, the commission also sent a letter to Monarch to “stop sending any simulcast signals to Arizona permittees racetracks and/or their additional wagering facilities.”
Prior to the ruling, TSG’s Monarch had sent its signal to Arizona Downs–formerly Yavapai Downs–when the track reopened for live racing in 2019, but not to the track’s network of OTBs. In contrast, Monarch distributed its signal to Turf Paradise and its network of some 60 OTBs.
Monarch’s position is that sending a signal to Arizona Downs’s network of OTBs would dilute the wagering product and depress overall business. The operators of Arizona Downs say the opposite is true.
“This is a big state with a long horse racing history. For many decades it supported at least two tracks and can continue to do so,” Tom Auther, an Arizona Downs owner and partner, told the TDN in February.
Monarch also argues that the state law is unconstitutional and that it is preempted by the federal Interstate Horseracing Act. The company filed an appeal of the ruling with the ninth circuit. But that appeal won’t happen any time soon, and in the meantime, the hit to the Arizona industry has been significant.
“I think our in-state handle is down roughly 25%,” said Leroy Gessmann, president of the HBPA said.
Thus far, this works out as a loss to the state’s purse account of more than $250,000, according to the HBPA’s figures.
“It’s definitely had an effect on us,” Gessman said.
Prior to the HBPA sending its letter to the department of gaming, Franzia had told the TDN that, should the stand-off continue, Turf Paradise would be forced to cut race days.
“We will drop the final two Mondays of April,” Franzia had said. “Our closing day is set for Sunday, May 3. We’re going to drop that, too, and closing day will be Kentucky Derby Day, May 2.”
The impacts from the dispute are trickling down into all sectors. John Grayson is an Arizona-based professional gambler and racehorse owner. He said that he now goes “out of town” to watch and bet on the big races that are currently run at TSG tracks, like the recent GII Fasig-Tipton Fountain of Youth S. at Gulfstream Park.
“I wasn’t going to miss that day, so, I actually went there. But a lot of people unfortunately don’t have the time to do that,” he said. “It’s sad for gamblers in Arizona.”
Greg Avioli, TOC president and CEO, had previously told the TDN that the weekly loss to the horsemen’s purse account in California totals about $10,000.
This is happening at a time when the industry in California is being squeezed hard. The Daily Racing Form conducted an analysis of January and February handles, and found that Santa Anita’s average per-race handle is down 8.1%–this, on top of a 10.7% drop last year. This works out to a loss of about $1.5 million per race card at Santa Anita, the analysis found.