Maryland's major thoroughbred racetracks, taking their first tentative steps into the world of Internet gambling, have reached agreement that will allow fans to bet on races at Pimlico Race Course or Laurel Park from their home computers.
Races and data -- including audio and video -- from the Maryland tracks will be Web cast by Youbet.com Inc., a Los Angeles-based interactive technology company. Subscribers will pay a monthly fee, now $5.95, open an account and place bets over their computers.
Handicapping information, current odds and other information will also be available on You- bet.com's closed online network via secure software. Some information carries additional charges.
Such an operation falls under the state's laws governing telephone betting, which were passed in 1984. But until recently little interest was shown in phone wagering, so the necessary regulations to set up such an enterprise have not been written. Over the past few years, the regulations have been on hold while Gov. Parris N. Glendening reviews gambling issues.
The Youbet.com operation, however, is routed through a Pittsburgh-area harness race track, The Meadows, so it is legal, said Bruce Spizler, an assistant Maryland attorney general and counsel to the Maryland Racing Commission.
Youbet says it plans to take wagers on the Preakness on May 15.
The local tracks, both owned by the Maryland Jockey Club, will take a percentage of the total wagers just as if the race signal were being sold to The Meadows as a simulcast. The revenue of simulcasts, typically 3 percent of wagers, is split evenly between the tracks and their purse account, which distributes it to horse owners, trainers and jockeys that finish fourth or better in a race.
Similar arrangements are being struck for telephone betting, routing local bets through other racetracks in Pennsylvania. Those services, linked to cable broadcasts of races, could be starting up in Maryland in coming months.
The Youbet.com deal expires at the end of the year, so the jockey club can study its impact and calculate whether it is gaining more business from computer wagering than it is losing from its tracks and off-track betting sites because of fans staying home to play, said James P. Mango, chief administrative officer of the tracks.
"Other jurisdictions have said, 'Let's make a deal,' and roll with it. Our approach is to see how it works before we strike a long-term deal," Mango said.
He said he was not sure when Maryland's races will begin appearing on the service, and he declined to specify the percentage of wagering the tracks would receive. Youbet.com's spokeswoman was unavailable yesterday.
"We really aren't looking at the venture right now as making money or not making money. We're going to analyze what kind of effect it is going to have on Maryland," Mango said. "We're trying to self-defend ourselves."
Alan Foreman, counsel to the Maryland Horsemen's Association, said he will be watching the Youbet.com experiment closely, not only because of the glimpse it offers of the future of racing but because it could pump new money into the state's purses.
"I think it will be interesting to see how much revenue we generate through Youbet," he said.
Youbet.com started carrying races last year and now Web casts from about 20 tracks and has been trying to position itself as a leader in online gambling, a business many analysts expect to grow rapidly in coming years.
For the nine months ending last September, the most recent financial data reported by the company, Youbet.com lost $11.2 million on revenues of $98,000. Investors have been intrigued, driving the company's stock as high as $22.25 a share over the past year, but sending it down to $12 a share in recent weeks.
The Maryland tracks are eager to establish telephone betting locally, so more of the money can be retained in the state.
"The regulations are very important to us to compete with other jurisdictions," Mango said.
A study commission on horse racing headed by Stuart Janney III on Friday issued recommendations, including that regulations be written soon to permit Internet and telephone wagering. The governor will look at those recommendations and decide how to proceed, but has not yet had time, said Karen Napolitano, a spokeswoman for the Department of Licensing, Labor and Regulation, which oversees the racing industry.
Meanwhile, a number of racing television shows, coupled with telephone betting, are in the formative stages and could be airing Maryland races later this year. The Racing Network, based at Philadelphia Park, will use satellite dishes and is likely to carry Maryland races, Mango said. It was supposed to be up and running now, but its debut has been delayed.
Likewise, The Television Games Network, a 24-hour cable television channel, was initially slated to begin broadcasting last fall, then this spring. Mango says he has been told it will begin in October or November.
Pub Date: 3/23/99