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After Probe over Unlicensed Operation, Twinspires Exits New Hampshire

Five months after New Hampshire gambling regulators and the state's attorney general disclosed that they were investigating the TwinSpires advance deposit wagering (ADW) platform over concerns that the Churchill Downs, Inc. (CDI)-owned entity has operated for years without being explicitly licensed there, TwinSpires is ceasing operations in the Granite State.

Back in April, Charlie McIntyre, the executive director of the New Hampshire Lottery, which regulates all forms of gambling in the state, told WMUR-TV that “They're not regulated by us, nor do they operate on any confines of state law…. It's a concern for us, obviously, because all other gambling in the state happens through us-either we license it, or we regulate it. In this case, neither.”

At that time, McIntyre estimated the amount of lost revenue because of TwinSpires not giving the state a cut of its betting business at “hundreds of thousands of dollars.”

McIntyre continued: “They've been doing it for a number of years, and so it's a significant amount of money.”

TwinSpires customers in New Hampshire began receiving emails Sept. 29 informing them that “TwinSpires has elected to cease operation of its ADW Platform for Horse Racing in the state of New Hampshire.”

The email stated that TwinSpires will take wagers from New Hampshire residents on races conducted through Nov. 5th, the concluding day of the Breeders' Cup championships.

After that, the email stated, “Wagering will be suspended on Nov. 6th, and Players will have until Nov. 21 to withdraw funds from their account.”

A Friday afternoon query to Tonya Abeln, CDI's vice president of corporate communications, did not yield a reply prior to deadline for this story.

Nor could McIntyre be reached Friday afternoon to get the lottery commission's perspective on the TwinSpires pullout.

Back in April, CDI officials told the gaming news site casino.org that TwinSpires was “legal and compliant with the federal Interstate Horse Racing Act.”

A FAQ page provided in CDI's email to New Hampshire customers cited non-specific “regulatory changes in New Hampshire” as the gaming corporation's reason for vacating the state.

“As of right now we do not know what the future holds for TwinSpires as an ADW Platform for Horse Racing in New Hampshire but we are hopeful to serve you again soon,” the FAQ page stated.

In April, McIntyre told WMUR-TV that he had approached CDI about resolving the issue, but that “nothing has happened yet.”

New Hampshire no longer has live pari-mutuel racing of any breed. Thoroughbred racing ceased at Rockingham Park in 2002, and harness racing ceased there in 2009. The state had three greyhound tracks operating at the start of the 21st Century; two of them stopped racing before dog racing was banished in New Hampshire in 2010.

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CDI Aims to Nearly Double Colonial’s Race Dates

By 2026, the gaming corporation that owns Colonial Downs is aiming to nearly double the amount of racing at the turf-centric Virginia track, potentially expanding the current boutique-styled summer race meet from 27 to 50 dates.

That news was revealed Thursday morning by Bill Carstanjen, the chief executive officer of Churchill Downs, Inc. (CDI), who briefly mentioned the dates increase during a public quarterly earnings conference call with investment bankers.

The reason has everything to do with CDI's gaming revenue and apparently very little do with the overall scope of the region's racing.

Almost as an aside during a larger discussion about CDI's in-progress acquisition of Colonial and its network of gaming businesses, Carstanjen said that CDI is “working on plans to enhance the racing” as the result of a corporate strategy to maximize the number of historical horse racing machines (HRMs) that it can operate at various locations in the state.

“Based on Virginia law, we will be required to run one race date for every 100 HRMs that are operational in the state, up to the 5,000 HRMs we are currently authorized,” Carstanjen said.

“Colonial Downs will hold 27 race dates this year in conjunction with the approximately 2,700 HRM machines now deployed. Over the next two to four years we expect to grow to up to 50 race dates as we reach 5,000 HRMs,” Carstanjen said.

An expansion of the racing schedule by that magnitude would almost certainly create horse availability strains in a region of the country that is geographically thick with competing tracks, but has a strong recent history of cooperation so as not to cannibalize the overall mid-Atlantic Thoroughbred product.

Frank Petramalo Jr., the executive director of the Virginia Horsemen's Benevolent and Protective Association, told TDN in a phone interview that he hadn't heard Carstanjen's comments, but he knew that the Virginia law allows for that level of race dates expansion.

Even though owners and trainers generally welcome the prospect of increased race dates, Petramalo urged restraint for the sake of the overall circuit.

“What I've said to both Bill Carstanjen and to [CDI president] Bill Mudd, our goal has always been to have a rational program within mid-Atlantic racing,” Petramalo said. “We were thinking that something smaller than [50 dates at Colonial] would fit in the mid-Atlantic. I certainly could change my mind, but I told both Bills that it's important to continue a cooperative relationship between Virginia and Maryland and Delaware [and] certainly Pennsylvania.”

Petramalo continued: “We have a lot of racing [in the region] and a diminishing number of horses. We think the way to success is to try to rationalize racing programs. Now I know that's an anathema to just about every state, but you can't keep running over other race meets. It just doesn't make any sense.”

After being closed for six years, Colonial reopened under new management in 2019, ushering in the HRM-fueled purse era in Virginia and carving out a reputation as an independent “comeback” track.

Petramalo said that earlier in Colonial's history, it had a contract with Maryland tracks that called for Maryland racing to shut down in June and July while Colonial ran unopposed. In turn, Colonial did not seek to expand its schedule beyond that agreed-upon time frame.

“Even after Colonial bought out that contract, we still had a cooperative relationship. We weren't running against each other,” Petramalo explained.

“Sure, we'd like to race 50 days,” Petramalo continued. “But it has to make economic sense to do that. Right now we don't really compete with Maryland because we race Monday, Tuesday, Wednesday, and they race weekends. We still have a lot of people going back and forth, and we both prosper that way.”

CDI owns four other Thoroughbred tracks nationwide–Churchill Downs, Turfway Park, Fair Grounds and Presque Isle Downs–and is in the process of receiving regulatory approvals so it can close the $2.4-billion Colonial sale. But beyond its presence at Presque Isle, the gaming corporation is a new player to the traditionally cooperative mid-Atlantic racing region.

Recent history begs the question of whether CDI can play nicely with its neighbors and horsemen.

Under CDI's stewardship this century, the gaming corporation has purchased and then closed down three major racetracks: Hollywood Park, Calder Race Course and Arlington International Racecourse. Its shutdown of Arlington last year capped a decade-long series of acrimonious relations with horsemen, and CDI is still being litigated in federal court over a $775,000 purse account dispute.

“We continue to analyze where to deploy additional HRMs in Virginia,” Carstanjen said during the July 28 call. “We are prioritizing locations based on population, disposable income, and likelihood of being able to pass a local referendum allowing for HRMs in the specified locations. We will provide updates on future earnings calls.”

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Contents of Arlington Up for Online Auction

The first items in a massive online-only auction of the contents of Arlington International Racecourse have been listed for bidding.

The sales process, which is scheduled to take place over the next few months in up to 15 separate “events” grouped by asset type, is beginning with food-service and kitchen items.

The coveted big-ticket racing-related offerings–marker poles, finish lines, signage, artworks, and even starting gates–will be among the last batches of items to be sold.

“We're going to be targeting nostalgia and memorabilia items mid-September,” said Judd Grafe, who runs the Minnesota-based Grafe Auction Company, in a Thursday phone interview.

“I don't have a date for the memorabilia yet. My team is on site. We're actually physically photographing and creating catalogues, and we will update the website weekly with times and dates of upcoming sales,” Grafe said.

Churchill Downs, Inc. (CDI), the gaming corporation that previously shuttered Hollywood Park and Calder Race Course, is in the process of completing a $197-million sale of the 326-acre Arlington property to the Chicago Bears football team. Arlington's final races under the CDI regime were last September.

When CDI issued a proposal request seeking an auctioneer back in February, it listed the likely revenue from the complete sale of the track's contents at approximately $2.5 million.

Although organizing a sale of such magnitude seems like a difficult endeavor from a “Where do you start?” perspective, Grafe's family has been in the auction business for more than 60 years and has liquidated the contents of numerous large facilities, like resort hotels and even a drag-racing auto track. But never a horse track.

“How do you eat a big apple? One bite at a time,” Grafe said. “We are literally eating our first bite and getting everybody introduced to the process.”

Still, the behind-the-scenes prep work is largely the same, regardless of the venue, Grafe said. The initial goal is to clear space by selling large, cumbersome pieces of equipment. Then they work towards memorabilia items, and eventually office equipment.

“I don't want to over-simplify it, but It's a bit like Sesame Street,” Grafe said, referring to how his team organizes assets by class, size and use.

All bidding will take place online.

A catalogued item will enter an online sales ring according to a posted schedule. If that item receives active bidding within 20 seconds, a timer will reset for 20 seconds and keep resetting until there are no active bids on the item. Then the bidding for that item will close, deeming that item sold, and the next consecutive item will enter the ring. Grafe explained there will be a way for bidders to place limits on what they might bid in case they can't remain in front of the computer screen for the duration of the auction.

In-person preview days at Arlington will also be scheduled.

“And an important note, because everybody will hope that they can come to the preview and just wander around the building: That's just not going to be possible. One, it's not safe, and two it's not secure. But people will be able to come in and look at the items that will be sold the next day,” Grafe said.

The question everyone has been asking Grafe is whether or not Arlington's iconic “Against All Odds” bronze sculpture featuring John Henry and The Bart will be among the artwork sold by CDI.

“I don't know. I have yet to be told about the Arlington bronzes. I believe the ownership is deciding whether they should be moved to a different [CDI] location or if they should be offered. As soon as ownership lets us know, we'll create a catalogue and tell the world,” Grafe said.

Grafe admitted that Chicago's once-grand Thoroughbred showcase has a bit of a spooky vibe considering how the building is full of history but now sits empty.

“As a professional who works with large facilities–we've done shopping malls and the Minnesota Vikings stadium when it was rebuilt–I'm relatively familiar with walking through empty buildings. It's always a little eerie,” Grafe said.

Grafe explained how the presence of auctioneers cataloguing a beloved civic entity can sometimes arouse feelings of sadness in the people who once enjoyed that venue in its heyday, and his team tries to respect those public sentiments.

“Part of what we do as auctioneers is a natural function of society, a part of any life cycle, whether it's personal or business,” Grafe said. “With any large property, the community always has a level of history when those properties get transformed into something new.

“So for us, it's cool to respect and memorialize the history and the past at Arlington, and we hope people look for the good in this event. That's what we do as professionals. It's an honor to be here, and an honor to represent the history,” Grafe said.

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Baffert Sues CDI, Carstanjen & Rankin Over Suspension

Trainer Bob Baffert has filed a lawsuit in U.S. District Court for the Western District of Kentucky against Churchill Downs Inc. (CDI), CDI CEO Bill Carstanjen and CDI Board Chair Alex Rankin. Baffert is seeking a preliminary or permanent injunction that will enjoin Churchill from barring him. At present, Baffert cannot compete in the 2022 or 2023 runnings of the GI Kentucky Derby or any other races at Churchill or Churchill-owned tracks.

He is also fighting a separate action from the Kentucky Horse Racing Commission, which suspended him for 90 days after Medina Spirit (Protonico) tested positive for betamethasone in last year's Derby.

“The notion that Churchill Downs, which is not even tasked with regulating horse racing in Kentucky, could unilaterally ban a trainer by an edict coupled in a press release without having the facts or any semblance of due process should arouse outrage in any fair-minded person,” said Baffert's attorney Clark Brewster.

Shortly after the lawsuit was filed, Churchill issued a scathing statement, declaring that its fight against Baffert was about protecting the integrity of racing.

“The lawsuit filed by Bob Baffert is disappointing, but certainly not surprising,” the statement read. “His claims are meritless and consistent with his pattern of failed drug tests, denials, excuses and attempts to blame others and identify loopholes in order to avoid taking responsibility for his actions. These actions have harmed the reputations of the Kentucky Derby, Churchill Downs and the entire Thoroughbred racing industry. Churchill Downs will fight this baseless lawsuit and defend our company's rights. What's at stake here is the integrity of our races, the safety of horses and the trust of the millions of fans and bettors who join us every year on the first Saturday in May.”

The Baffert side did not mince words, either. The lawsuit charges that “CDI has, with malicious intent, caused significant damage to Baffert's ability to conduct his customary business on a national scale. From context, it is apparent that CDI's targeted sanctions have the singular aim of destroying Baffert's career.”

The crux of Baffert's case against Churchill is twofold, that the ban deprives him of his right to due process and that only the state racing commission is permitted to issue a ban against trainers.

“Despite the prevalence of actual reckless and dangerous conduct by others trainers and owners (which have sometimes culminated in Racing Commission suspensions), CDI has arbitrarily and capriciously singled out Baffert for this baseless sanction in violation of Baffert's procedural and substantive due process rights under the Fourteenth Amendment to the United States Constitution,” the suit reads.

A federal court ruled that the New York Racing Association violated Baffert's due process rights when issuing a suspension of its own against the trainer. That forced NYRA to hold a hearing into the Baffert matter, the results of which have yet to be determined. However, NYRA is a quasi-state organization and the courts generally treat such an entity differently than they do a privately held company like Churchill. In most cases, private tracks can ban individuals and do so without due process.

On the issue of whether or not Churchill can ban an individual, Baffert's legal team is arguing that such a suspension can only be handed down by a racing commission.

“Baffert expressly agreed to cooperate with the Racing Commission's regulatory process when he entered horses at Churchill Downs and to submit to any penalties imposed after a final order issued by that body. Baffert's culpability, if

any, will be determined in that forum,” the suit reads.

The lawsuit also seeks to force Churchill to award points for the Kentucky Oaks and Derby in the event a Baffert-horse places in a prep race. Churchill has declared that all Baffert-trainees are not eligible to earn any points in the preps, still another factor that might keep Baffert's horses out of those races.

But even if Baffert can win this round in court that does not mean he will be eligible to compete in the Derby. In order to do so, he will also have to find a way through the courts to get a stay of the Kentucky Horse Racing Commission's ban, which is set to begin Mar. 8.

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