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Racetracks Accuse Horsemen of Price-Fixing

LOUISVILLE (CN) - In a federal antitrust complaint, Churchill Downs claims that horsemen's groups conspired to fix the take they receive from off-track betting, and "have threatened to, and are carrying out, an unlawful group boycott of racetrack operators that do not knuckle under to their demands."

Churchill Downs sued on behalf of Calder Race Track in Florida, targeted by the allegedly illegal group boycott led by the Thoroughbred Horsemen's Group.

The federal lawsuit claims that the defendants have demanded one-third of the "takeout" from off-track, advance deposit betting.

Roughly 80 percent of the betting pool in pari-mutuel races is distributed to winning bettors; the takeout is the roughly 20 percent that's left. The takeout is shared by the racetrack, the OTB operators, the owners of the horses that finished in the money, taxes for state and local agencies, and other state taxes and fees.

Plaintiffs claim the Thoroughbred Horsemen's Group "was formed in November for the purpose of raising the prices paid to horsemen for signals."

Signals are "the sale and licensing of the right to receive simulcast signals and to accept wagers on horse racing at locations other than the host racetrack."

Defendants have told Calder Race Track that they will not permit advance-deposit ADW (advance deposit wagering) operators to accept wagers on that track's races unless the ADW operator agrees to pay a fee equal to one-third of the takeout to the horsemen through contributions to purses."

Plaintiffs claim the alleged conspirators operate at more than 40 percent of U.S. tracks, which take more than 65 percent of the pari-mutuel bets nationwide. They claim the defendants' demands were "collusively set."

Represented by Wyatt Tarrant & Combs of Louisville and Sidley Austin of Chicago, plaintiffs demand an injunction and treble damages.

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