Case Establishes the Precedent that Racetracks and Horsemen
Must Be Compensated for their Product
Arcadia, California – June 14, 2017 – The Stronach Group announced today that it has entered into a settlement agreement with Horse Racing Labs, LLC dba DerbyWars. The settlement agreement memorializes the recent Federal Court ruling in favor of The Stronach Group, ensures that DerbyWars will not use the content from Stronach racetracks without consent, and requires a significant monetary payment to be made by DerbyWars. The precedent established by this case is of great importance to the entire horse racing industry.
The Stronach Group filed the litigation on December 2, 2015 in the name of its wholly-owned racetracks, Santa Anita Park, Gulfstream Park, Pimlico Race Course, Laurel Park, Golden Gate Fields and Portland Meadows. In the litigation, the Stronach Group claimed that DerbyWars violated certain federal and state laws, including the Interstate Horseracing Act, by using content of the Stronach racetracks without consent. DerbyWars was using the content in connection with the operation of on-line handicapping contests in which participants paid money for the chance to win cash prizes based upon their selection of horses within the horse races comprising the contests.
On May 15, 2017, Judge S. James Otero of the United States District Court for the Central District of California ruled that the entry fees paid by participants in the DerbyWars contests constitute wagers, and as such DerbyWars was not in compliance with the Interstate Horseracing Act. Under the Interstate Horseracing Act, wagers on a horse race require the consent of the racetrack conducting the race. In practice, such consent is typically conditioned upon the payment of money to the racetrack conducting the race.
While the Court ruled that entry fees in the DerbyWars contests constitute wagers, the case was still scheduled to proceed to trial on June 27, 2017 for the purpose of determining damages. The settlement agreement announced today allows the parties to avoid trial.
“We are very pleased with the outcome of this case,” stated Scott Daruty, Executive Vice President – Content & Media for The Stronach Group. “We filed this lawsuit over eighteen months ago to establish the precedent that the racing content generated by racetracks and horsemen cannot be used for wagering purposes without consent. As with all litigation, this case has been both time consuming and expensive. Therefore, we are very gratified that the Court has confirmed our belief that cash-based handicapping contests are a form of wagering that requires consent. We intend to immediately begin working with selected licensed handicapping contest operators to establish a business model under which they can offer these contests to their customers using Stronach content while ensuring that the racetracks and horsemen putting on the show receive adequate compensation for the racing content they are creating.”
For more information please contact: Scott Daruty, Executive Vice President – Content & Media