By T. D. Thornton
In an ongoing dispute over whether Presque Isle Downs (PID) has been steering on-track patrons to make bets through advance-deposit wager (ADW) platforms controlled by its corporate parent and then not counting those bets as on-track wagers that provide better revenue for purses, the Pennsylvania Horsemen's Benevolent and Protective Association (PAHBPA) swatted back in federal court with a Sept. 7 counterclaim to claw back at least $75,000 in disputed funds.
PID had fired the first salvo of litigation on June 24 in the form of a civil lawsuit that sought to block the PAHBPA's “unsupported allegations” from going to arbitration.
According to court documents, the horsemen and the track have been squabbling over this issue since February 2020, and went through 16 months of airing grievances via demand letters and committees without coming to a resolution. PID then took the matter to United States District Court (Eastern District of Pennsylvania) to try and block an attempt at arbitration.
Beyond the PHBPA's initial allegation that the purse account has been shorted at least $75,000 so far, any ruling in this case could be a precedent-setter that would determine how the betting revenue gets split moving forward.
PID's corporate parent is Churchill Downs, Inc., (CDI). The disputed on-track bets are allegedly getting steered to ADW platforms like TwinSpires that are controlled by another CDI-owned entity, the Churchill Downs Technology Initiatives Company (CDTIC).
Additionally, the PAHBPA had argued during the grievance process that the source market fee (derived from ADW bets made by in-state residents) that PID agreed to with CDTIC is too low in comparison to industry standards.
In its lawsuit, PID had countered that “PID does not own the majority of CDTIC. CDTIC is a separate legal entity from PID.”
The PAHBPA's Sept. 7 response and counterclaim states that “PID's purported declaratory judgment action is nothing more than an improper attempt to further delay resolution of PID's contractual breaches and cause PAHBPA to incur unnecessary legal costs and expenses.
“By way of further response, PID's ultimate parent, [CDI], through its subsidiaries, has employed similar tactics against horsemen's organizations like PAHBPA in other states. In any event, PID is not entitled to the declaratory judgment it seeks, as the underlying contractual disputes between PAHBPA and PID clearly fall within the scope of the arbitration language of the PID Live Racing Agreement…
“PID has breached and continues to breach the Live Racing Agreement, which breaches are the subject of the underlying claims PAHBPA has elected to submit to arbitration….PID has manufactured this 'controversy' over arbitrability out of whole cloth, and the complete lack of support for PID's strained positions indicates that PID's Complaint may have been filed for an improper purpose, particularly when viewed in the context in which PID commenced this action.”
The filing continues: “By way of example only, and upon information and belief, PID has purposely understaffed the wagering locations within the racetrack enclosure at Presque Isle Downs, thereby making it more difficult to place wagers within the racetrack enclosure and encouraging patrons to place wagers through PID's electronic wagering system instead.”
Back on June 24, PID's initial complaint stated that “PAHBPA's asserted allegations of breach are nothing more than a money grab without legal merit….PAHBPA's asserted allegations are an attempt to renegotiate through arbitration a long standing contractual provision, that with the benefit of hindsight and changed circumstances, they now disfavor.”