BUSINESS

Churchill Downs faces lawsuit for breach of contract

TAGs: Balmoral Park, Maywood Park, Twinspires, youbet.com

Churchill Downs has landed in some hot water as of late in attempting to run its online gambling business, this latest dust up could lead to a costly legal battle. The Illinois Harness Horsemen’s Association, Balmoral Park and Maywood Park have filed a $3.6-million lawsuit against Churchill Downs (CDI) alleging that the racetrack giant is in breach of contract in regard to its recently-acquired advance-deposit wagering provider.

Frank Angst of thoroughbredtimes.com wrote an article describing the current lawsuit. According to the article, the lawsuit claims that the transfer of customers from youbet.com and youbetillinois.com to twinspires.com constitutes a breach of contract. The report explains that the tracks worked with Youbet on a cross-marketing initiative that would have seen an agreed-upon percentage of bets and additional fees flow back to the tracks. But according to the lawsuit, CDI did not uphold their end of the bargain.

The tracks claim they have not received the negotiated fees and percentages since November, 2010 when all Youbet players were moved to Twinspires by Churchill Downs. The $3.6-million figure is a sum based on the expected return of those fees for the entirety of the four-year contract.

The lawsuit paints a less than favourable picture of Churchill Downs, and accuses Churchill of breaching confidentiality provisions by sharing customer lists with TwinSpires and other third parties, and thus violating the Illinois Trade Secrets Act.

This could uglier as time goes on. Lawsuits from other tracks could follow as Balmoral and Maywood said the agreement with Youbet.com in 2007 included “other race tracks.”

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