On Feb. 2, 2021, Churchill Downs Technology Initiatives Company (CDTIC), a subsidiary of Churchill Downs, Inc. that operates advance deposit wagering companies TwinSpires and BetAmerica, filed a lawsuit against the Thoroughbred Owners of California for invoking state statute in an effort to bring a dispute over simulcast hub fees into binding arbitration.
According to the Thoroughbred Daily News, that lawsuit has been dropped. A “notice of voluntary dismissal” was filed Monday in the United States District Court (Central District, California, Western Division), which indicated that the parties reached an agreement on March 5.
The notice did not indicate specifics about that agreement, and neither TOC's Greg Avioli nor Scott Edelman, the CDTIC's attorney, responded to queries from the TDN.
The dispute centered around a hub agreement reached on Dec. 22, 2020, between Santa Anita Park and CDI's two online wagering companies, TwinSpires and BetAmerica. The agreement specified the percentage the ADW companies would receive on each dollar wagered by California residents using their platforms. By California statute, the maximum an ADW company may receive to facilitate a wager is 6.5%. The agreed-upon percentage in the agreement between the ADW companies and Santa Anita is redacted in the court filings. According to the lawsuit, TOC asked that the hub fee be reduced to 4.1%, which the complaint said “would cost Churchill Downs Technology millions of dollars and upset almost a decade of an established course of dealing between the contracting parties.”
Two months earlier, on Oct. 28, the suit alleged, TOC president and CEO Greg Avioli asked Churchill Downs Inc. executive Mike Ziegler to “voluntarily return the equivalent of 1% of the total” wagered on the company's ADW platforms in 2020. “TOC threatened that if Churchill Downs Technology did not comply with its 'voluntary' request, it would demand arbitration pursuant to section 19604,” the complaint alleges, calling the effort a to retain additional revenue a “shakedown.”
Read more at the Thoroughbred Daily News.
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