Churchill Downs sues horse owners in California over commissions

The dispute between the Churchill Downs and horse owners is over hub fees, of which a portion is retained by the California-licensed provider.

US.- A Churchill Downs subsidiary is suing horse owners in California in an attempt to prevent them from taking the company to arbitration over the commissions it takes from wagers made on its online platform.

The new lawsuit brought by Churchill Downs claims that its two online wagering companies, TwinSpires and BetAmerica, reached an agreement with Santa Anita Park, although the exact amount is not made public in the court filings.

It says that horse owners asked for the hub fee be reduced to 4.1 per cent (the state maximum is 6.5 per cent). The complaint says that “would cost Churchill Downs Technology millions of dollars and upset almost a decade of an established course of dealing between the contracting parties.”

Churchill Downs claims that horse owners want it to return $1.2m it received last year. It said the Thoroughbred Owners of California (TOC) had requested arbitration.

It defined the TOC’s actions as a “shakedown” and argued that they could be detrimental to the future of its apps in the state.

The lawsuit reads: “Churchill Downs Technology has to abandon the millions of dollars it invested in its business in California and the rights it has under contract, or it has to proceed to a standard-less but binding arbitration.

“This violates the Due Process Clauses of the United States and California Constitutions.”

The horse owners argue they are pursuing the funds since the pandemic has taken bettors away from horseracing tracks.

Meanwhile, a bill that would allow Historical Horse Racing machines (HHR) to remain legal in Kentucky had received approval from the Senate Licensing and Occupations Committee.