Simulcast Costs Rise for Racetracks, Off-Track Betting Sites

HAMBURG, NY - There's big anticipation for Saturday's Belmont Stakes, as California Chrome will go for the Triple Crown.

Here in WNY, for local racetracks and off-track betting sites, the big races are becoming more and more important.

"The major events take on a much, much bigger meaning for places like us," said James Mangp, the chief operating officer of Buffalo Raceway.

The raceway is expected to be packed Saturday for the Belmont Stakes. But, behind the scenes, small racetracks like this one are losing revenue because of how much it costs so wagers can see the race here.

"And really it's non-negotiable and that's the problem, there isn't any negotiating anymore, it's the rates take it or leave it," said Mango.

The ultimatum is given by the major simulcast providers -- Churchill Downs and Monarch. Mango says in April, simulcast rates at Buffalo Raceway rose 30 percent.

"Between the two of them, they probably control oh gosh, probably 70 percent of the national handle," Mango said.

Racetrack operators say the companies are recouping their money after a state law went into effect earlier this year. The law requires out-of-state operators to pay a five percent fee for every wager they take from a New York state resident. The state collects the fee money, which is then redistributed to OTB's, breeders and racetracks.

"This was a first attempt to try to help them, but certainly if we see that other problems are arising then we certainly need to take another look at it," Assemblymember Jane Corwin said.

Mango says that the five percent tax on bets with out-of-state operators hasn't helped much. And at this point, the loss in revenue the track is seeing hasn't force him to make any drastic operation cuts.

Mango says that the increase in cost for the simulcasting is a natural part of the business and that simulcast contracts are usually renewed each year.

What does he think will happen next year upon another renewal?

The cost will go up again.

Coverage of the Belmont Stakes on Channel 2 begins Saturday at 4:30.


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