Track firm pays $3.8 million for 30% of AmTote

THE BALTIMORE SUN

Magna Entertainment Corp., the Canadian concern that owns 14 North American horse racetracks, including Pimlico and Laurel, bought a slice of racing history yesterday - a 30 percent stake in AmTote International Inc. of Hunt Valley.

Magna paid $3.82 million for its piece of AmTote, a company more than 60 years old that single-handedly changed the face of racing by installing the first electronic system to process bets during the Great Depression.

John C. Corckran Jr., president of AmTote, declined to comment for the story, but said in a statement that the deal with Magna will help the firm "develop a wealth of new ideas for the entire pari-mutuel industry."

Corckran and family members and associates will continue to hold 70 percent of the company, the release said. Magna, however, may increase its investment in the future, the companies said.

Jim McAlpine, president and chief executive of Magna, did not return phone calls.

Magna, which is based in Aurora, Ontario, is a sprawling publicly traded corporation with 5,100 employees. It is owned by Magna International Inc., a global automotive parts supplier.

In addition to owning racetracks across the country, Magna Entertainment operates XpressBet, a national Internet and telephone account wagering system, and HorseRacing TV, a horse racing cable network.

The company is swallowing the racing industry, many in the business believe.

In November, Magna completed its acquisition of Pimlico Race Course and Laurel Park, a month after it sewed up a deal to buy control of Lone Star Park in Grand Prairie, Texas.

"Magna is buying racetracks like you and I go out and buy a six-pack or a pair of shoes," said Chick Lang, a former general manager of Pimlico Race Course and an industry consultant. "Magna is very aggressive."

Lang wasn't surprised by Magna's purchase because the company wants to control everything from the starting gate to the machines that record photo finishes, services racetrack owners still pay for, he said.

"The theory is, 'Why are we paying? We should own this all of ourselves,' " Lang said. "If they had all of this under control ... they could save a hell of a lot of money."

AmTote, on the other hand, is closely held and much smaller with 400 employees.

But the firm has always been known as an innovator in the rough and tumble racing business.

The company's roots go back to 1927 when Harry Straus left a Maryland racetrack disgruntled after betting in the last race of the day on a long shot with 12 to 1 odds. The horse won, but the payoff was meager - 4 to 1. Many others fans were angry, too, and felt that they had been cheated.

"For many, it was a typical day in the Roaring Twenties - a decade of rampant corruption, unscrupulous gambling operations and quintessential greed," according to a short history of AmTote on the company's Web site. "Against this unseemly backdrop, Straus knew he would do something to restore honor to the Sport of Kings."

He went to work and with a group of engineers and formed American Totalisator Co. In 1930, Straus installed part of his new system at Pimlico - a towering black scoreboard that electronically displayed the odds, order of finish and payoffs.

Three years later, Strauss installed the country's first complete system at Arlington Park in Illinois that not only had the scoreboard, but machines that issued tickets and bet-registering equipment.

Pimlico became a testing ground for AmTote, Lang said. "They would tell you on the telephone that they had something new and they would want to show you," Lang said. "They would come to Pimlico and send their top engineers and skilled people ... when they came in with the new machines."

The firm's reputation grew throughout the industry. Today it has 800 customers worldwide, according to its Web site.

Tote companies came under fire last year to improve their security after last year's Breeders' Cup betting scandal in which a computer programmer, employed by Autotote Systems Inc. of Newark, Del., digitally changed the bets of a pair of associates after the races had been run. The scheme resulted in more than $3 million in payouts.

Copyright © 2020, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
68°