Dear TOC members,

TOC learned earlier today of the federal lawsuit filed by Churchill Downs Technology Initiatives Company (CDTIC).  On December 31, 2020 TOC notified CDTIF that TOC would purse the statutory remedy (available to both racetracks and horsemen in California) to seek arbitration of the amount of the Hub Fee retained by CDTIC from wagers from California residents for the calendar year 2021.  ADW wagering in California increased by over 40% year over year statewide in 2020 while purse generation from live tracks and OTBs dropped substantially due to COVID-19 closures and restrictions. In 2020 CDTIC received over $7 million of Hub Fees from ADW wagers by California on Thoroughbred races.   TOC’s decision to exercise its arbitration rights under California law came after CDTIF declined to reach a voluntary settlement of the matter. The specific provision in California law (Business and Professional Code 19604 et. seq.) authorizing the arbitration of Hub Fees is nothing new and, in fact, has been unchanged in California law for more than two decades.  We intend to move forward with the Hub Fee arbitration in an expedited manner and believe the attempt to disrupt the arbitration by CDTIC with this last-minute federal lawsuit has no merit.