Cloverleaf files $20M suit against MD Thoroughbred Horsemen’s Assn.

Daily Record Business Writer
July 6, 2009 8:04 PM

The bankrupt owner of Rosecroft Raceway filed a $20 million suit Monday against the Maryland Thoroughbred Horsemen’s Association, the Maryland Jockey Club and 15 other defendants, and is promising more suits to come against others in the industry.

“Somebody finally had to stand up to these people,” said Kelley Rogers, president of Cloverleaf Enterprises Inc. He added there will be “many more still to come in the days ahead,” including an antitrust action and a possible suit against the Maryland Racing Commission.

Monday’s complaint claims that defendant TrackNet Media Group LLC, co-owned by Churchill Downs Inc. and jockey club parent Magna Entertainment Corp., is interfering with Rosecroft’s simulcast agreement with tracks owned and operated by Churchill and Magna.

Rosecroft, a harness racing track in Prince George’s County, stopped live racing last year, and simulcast betting is its only form of gambling revenue.

Cloverleaf is asking for a minimum of $10 million each for one count of breach of contract and one count of tortuous interference with contract. It is also asking the court to direct the out-of-state tracks owned by Magna and Churchill to immediately resume their simulcast signal at Rosecroft.

The out-of-state tracks are under a different simulcast agreement than the Maryland thoroughbred tracks.

Alan Foreman, general counsel for the horsemen’s association, said Monday evening he was unaware of the filing and could not comment until he had read the suit.

The simulcast agreement was made in 2006 between Cloverleaf, the jockey club, the horsemen’s association and the Maryland Horse Breeders Association Inc. (also a defendant in the suit).

This spring, the racing commission voted to shut off Rosecroft’s simulcast signal of thoroughbred racing because Cloverleaf refused to pay the Maryland Jockey Club’s rights fee of $5.9 million per year. Rogers at the time called the decision “ridiculous” and “unfair” because the track’s annual handle had dropped from $110 million when the rights deal was struck in 2006 to a projected $69 million this year.

A circuit court judge ordered the signal turned back on in time for the Kentucky Derby last month. However, the signal was restored the day of the Derby with only an hour left to place bets, a circumstance Rogers says cost him millions in lost revenue.

However, the suit says, Rosecroft is still not receiving signals from 18 thoroughbred racetracks for which TrackNet Media is the authorized agent. Currently, Rosecroft’s simulcasting consists mostly of harness and quarter horse races with limited thoroughbred races.

“On information and belief, the Out of State Racetrack Defendants have shut off the simulcast service based upon instruction from the [horsemen’s association, the breeders association or the jockey club], based upon its claim that it has authority under the Interstate Horseracing Act,” the suit states.

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