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MSP Letter to Thoroughbred Owners of California

November 19, 2004     E-mail this page to a friend!

This letter was sent to The Racing Journal, as well as the Thoroughbred Owners of California.

My name is Bill Nooney. I am President of Montana Simulcast Partners as well as a Thoroughbred owner and breeder. I would like to request that the Thoroughbred Owners of California reconsider the simulcast signal rates they have asked Del Mar, Hollywood Park and Santa Anita to charge Montana Simulcast Partners. Allow me to explain what our organization is all about.

Montana Simulcast Partners is a non-profit corporation licensed to conduct simulcasting in the state of Montana. In fact, we are the only organization currently doing that in this state. The organization is made up of 6 directors, each one representing a live race meet in Montana. By state law, we set aside 4 percent of all exotic wagers and 1 percent of all wagers to go directly into the purse structure to support live racing. MSP makes every effort to keep expenses to a minimum and over the past 8 years have been able to average an additional 4 percent of the handle to horsemen and track operations. For example, in 2003, we wagered $8,218,593 in simulcasting. (Not very high in California standards but live racing in Montana in 2003 had a total handle of $2,166,516. In Montana, it is legal to have video gaming in an establishment that has a liquor license. Each business is limited to 20 machines and a maximum of $2.00 wager (not much of a casino). Video gaming in 2003 was a $400,000,000 competitor for those leisure dollars. MSP feels we are doing well to compete on such an uneven playing field.) Of the $8 million-plus dollars handled in 2003, we were able to contribute back to the live racing industry in Montana a total of $739,673 (9% of handle). This is the only thing keeping live racing in Montana.

As you can see, the on-track handle is not enough to keep people raising horses and racing in Montana. Simulcasting is the only method we have to keep these tracks open and have high enough purses to keep people racing in Montana. Many of our local horsemen and breeders have raced horses in California as well as all over the country. I, myself, last year had a horse claimed from me at Golden Gate Fields that later won a $48,000 allowance race at Hollywood Park. I also had four horses this year at Emerald Downs and one of them is currently on his way to Mike Harrington at Golden Gate. You might remember Medaglia d’Oro, bred by Al & Joyce Bell of Great Falls, Montana. Other Montana owners include Mike Art, Mike Haggerty, Bill Feeley, and Lloyd DeBruycker to name just a few. Montana has a long tradition of horse racing lovers, but with the rising costs, our industry in Montana is certainly on the brink of going away.

Since our largest town is just over 90,000 strong, we need to have simulcasting sites in smaller communities. That is why we range in site numbers from 10 to12. We contact local business people, offer them 4 percent of their handle to have the simulcasting in their establishment (they gross approximately 35% off the video gaming machines). In 2003, the average site handle was just under $3,000 a day which means the sites do it because they support local racing and the industry and it's something unique to their area of town. That is why you see many of our site names with the word “Casino”. Almost every bar and restaurant in Montana has the name “Casino” associated with it. many of our sites also sponsor races at their local race meets.

Bottom line is that with the increase in the simulcasting fee to 5% and 5.5% and the tracks charging $300 per site per month for a decoder, we have two choices. One, we could close down approximately half of the sites but that would definitely lower our handle but raise the bottom line in keeping the network operational; or two, we have to drop some of the California signals and look elsewhere. In 2003, of the $8 million-plus in handle, $3,291,218 went to California tracks or 47% of the handle wagered on horses. Our patrons enjoy the California tracks but MSP needs to continue to exist if Montana racing is to survive.

We would ask that you look at our situation and help in any manner possible to get the simulcast signal rate back down to 3.75 or even 4 percent. The manager of our network, Tom Tucker, has talked with Mr. Andy Kure, Director of Simulcasting for MEC and he was told that MEC will not budge on decoder prices; they must remain at $300 per site no matter how small the handle but that he would look at the signal fee charges and talk with TOC. What we use to do in Montana was to be considered part of the Turf Paradise network. That allowed us to use their decoder but receive all the signals that they offered the sites in their network. We wagered into the host track pools and paid our fees just like all the simulcast facilities. Some of the host tracks have told us they believe that violates their state law and we need a decoder for that track at each site. It’s interesting to note that a decoder for a single track can cost up to $300 per month but people can subscribe to dish satellite services for $30 a month, stay home and get 8 track s at the same time. We are looking at ways of trying to combine all of our sites into a single entity and have the video distributed directly to each site building from a central location. If feasible and the host track agrees, we may be able to offer more signals to our patrons.

We already paid the 2004 simulcast signal fees for the Del Mar meet and realize that we can’t continue on.

On a personal note, as a horse owner and breeder for over twenty years, there is one thing I don’t understand. Why would major tracks want to shut down the small local tracks? When local racing is gone, the betting base is reduced, along with the number of horses being raised and raced. You are reducing owners and reducing horses due to people going out of business. People find other things to do. We need to broaden the betting base by involvement and increase the number of horses being raised for racing. This won’t happen if the local people are eliminated at the smaller levels.

Thanks for your time and any assistance you can give us.

Bill Nooney, President of Montana Simulcast Partners