Giving horseplayers a voice.

The Signal Impasse - Part II

by: Jeff Platt    11/08/2008
Players are stakeholders too.
Part II - Saturday November 8, 2008

I just got off the phone with Drew Couto, President of the TOC, Vice President of the THG. Naturally, the topic of conversation was the signal impasse. I asked him to explain his side of things. As president of H.A.N.A. I feel it's vitally important that I understand where ALL parties in this mess are coming from. And yes, it IS a mess. I promise to describe the mess itself and what I think it will take to break the stalemate later in this series. Right now I'm trying to talk to and understand the players involved.

While I strongly disagree with the TOC/THG tactic of preventing signals from going out as a negotiating ploy - Personally I think THAT should be off limits - and while I happen to think the last thing the game needs right now is ANY kind of wagering disruption at all - I did at least come away from the call with a basic understanding of the official TOC/THG point of view.

I'll try to summarize that position to the best of my ability:

Horsemen are facing tough economic times too. Simply put: They want more money.

They are refusing to allow signals to go out to ADWs. Wording in the Interstate Horseracing Act gives them the right to do that.

When I mentioned that the signal impasse was causing customers to leave the game at a time when the game can not afford to have that happen Couto told me that horse owners are leaving the game too.

He said that owners exiting the game is a primary reason behind shrinking field size. He said that unless the current ADW revenue sharing model changes field size will continue to shrink.

When the topic of conversation turned to the importance of the customer he admitted the industry really does need to do a better job of meeting customer needs and wants. He said he understands that without customers there is no racing. But he also pointed out that without horses there is no racing either.

He told me that the TOC really isn't anti-customer and asked me to point out that the idea for and half the funding behind the popular site http://www.CalRacing.Com comes from the TOC. He further stated that one of the TOC's long term goals is true open signal access - an environment where all track signals are available to all licensed ADWs - so that the customer can decide which ADW to use - instead of the industry deciding for the customer.

I pointed out that the current signal impasse had been dragging on for at least six months now. I asked him if it was time for an outside mediator to be brought in. Couto told me he didn't feel that was necessary - that the parties involved were still very much involved in the negotiating process.

Couto's background is that of an attorney. He told me very few cases ever go to trial because neither side wants that. Both sides almost always reach a settlement long before that happens. He told me a signal impasse was the last thing anyone (the horsemen, tracks, ADWs) ever wanted to see. But he holds firm in his belief that the percentages in the ADW revenue sharing model need to change to prevent more horse owners from leaving the game.

When asked about prospects for ending the signal impasse quickly he told me that negotiations are ongoing and that all sides are currently crunching the numbers from several proposals to determine which numbers work for them. He said he was realistically hopeful that all sides would reach an agreement soon.

At the end of the call I offered to do anything I could to help the parties involved come to an agreement. One thing I discovered this week is that NONE of the parties invlolved: the tracks, the ADWs, and the horsemen relish the idea of the customer turning against them. They really do have respect for H.A.N.A. and customers in numbers.

In this write up I have tried to be as objective as possible. I feel it's my responsibility as H.A.N.A.'s president to get actively involved and talk to all of the parties involved in this mess - not only to remind them of what the customer thinks - but so that I can understand exactly what is going on behind the scenes and report what I find back to H.A.N.A. members.

I hope I've managed to do that so far.

Jeff Platt

President, H.A.N.A.

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