Search Results for: texas

RACETRACKS ARE NOT THE ONLY COMPANIES DISCRIMINATED AGAINST IN TEXAS

Earlier this year (February 9 and 13), Horse Racing Business ran two posts on the unfavorable state government-imposed environment for racetracks in Texas (click here for reference.)   For example, Texas prohibits wagering via the Internet/telephone and pari-mutuel wagering on historical races.

Given Texas’ well-deserved reputation for fostering business and entrepreneurship, I thought the forgoing bans were uncharacteristic for the Lone Star state.  I changed my mind when I read about Wal-Mart’s current lawsuit against the Texas Alcoholic Beverage Commission.

Texas has a 1995 law that restricts hard alcohol (excludes beer and wine) sales to stand-alone stores owned by private companies holding state-issued liquor licenses.  Further, under a 1977 Texas law, a private company cannot own more than five store permits, with the huge exception that the principal owner can buy additional permits from a “first-degree” blood relative.  In other words, closely related family members can own an unlimited number of permits and stores.

In Texas, public companies (defined as firms with more than 35 stockholders) like Wal-Mart are confined to selling beer and wine.  Texas is the sole state to permit private companies to sell hard alcohol but not public companies.

In addition to Wal-Mart’s lawsuit, the corporation has joined Kroger and a number of other public companies and groups in seeking legislative relief.

The view here is that, while Texas generally offers a “can do” climate for doing business, the state nonetheless has laws and attitudes that are remnants of an insular culture intended to protect small business from the “predatory” Wal-Mart’s of the world.  The same lingering culture explains the legislature’s paternalistic stance towards its citizenry when it comes to such putative temptations as advanced deposit wagering and betting on historical races.

Copyright © 2015 Horse Racing Business

CURRENT OUTLOOK FOR A 2020 KENTUCKY DERBY WITH ON-TRACK SPECTATORS

With less than three months to the rescheduled 2020 Kentucky Derby on September 5, a key question is whether the race will be run?  The answer is almost certainly affirmative because the wagering would be huge even if it came exclusively via internet and phone.  The speculative question is whether fans will be in attendance at the racetrack.

About a month ago, Churchill Downs released an understandably vague statement that read in part:

“Our team relishes the challenge of the September Derby and is deeply committed to holding the very best Kentucky Derby ever and certainly the most unique in any of our lifetimes.  September 5 is still 4 months away.  A lot can happen in our country, and I expect that it will.  We will adjust and respond to whatever the circumstances and will work tirelessly with state and local officials to develop any and all necessary protocols and procedures to make our event a safe and responsible spectator event.”

A respected poll recently found that 66% of the American public intends to avoid crowds.  This will have to change dramatically for events like the Indianapolis 500 in late August and the Kentucky Derby in early September to attract a typically large crowd, even if the events go off as planned.  An effective vaccine could be the catalyst for reducing much of the fear of large crowds, but the most optimistic estimate I’ve seen for a vaccine is mid-to-late fall.

The view here is that the health after effects of the recent crowd gatherings over incidents of police brutality in the United States will provide an early quantitative fact-based indicator of whether a September Kentucky Derby, with on-track fans, will be feasible.  Health officials expressed concerns about the protest crowds spreading the coronavirus.  Dr. Anthony Fauci, the federal government’s top infectious diseases expert, said: “It’s a perfect set-up for further spread of the virus in terms of creating some blips that could turn into some surges.  There certainly is a risk.”

Ominously, multiple soldiers from the D.C. National Guard have already tested positive for Covid 19 after assisting the police with crowd control during protests and looting.

If coronavirus cases markedly spike, especially among people who attended the protests, that would obviously be a very negative sign for holding a Kentucky Derby with fans in attendance.  On the other hand, if pandemic cases do not spike, the chances improve for a Derby with on-track spectators. 

Unfortunately, Johns Hopkins University’s tally of five-day moving averages of the number of new coronavirus cases already shows Arizona, California, Texas, and other states experiencing a rise in confirmed cases as they lift restrictions intended to slow the virus. This certainly does not bode well for fans in the stands at fall 2020 sporting events.

It seems logical that if the Kentucky Derby can’t proceed with on-track fans in September, then neither can other sporting events like college and NFL football. 

As the summer of 2020 continues, Horse Racing Business will have at least one more assessment of the chances for a Kentucky Derby with fans at the track.

Copyright © 2020 Horse Racing Business

KENTUCKY DERBY TICKETS: FORCE MAJEURE

Postponement of the 2020 Kentucky Derby from May to September provoked interest from me and numerous other ticket holders pertaining to what our legal rights are with respect to refunds.  The answer depends on who you do business with.

Customers for Kentucky Derby tickets either buy directly from Churchill Downs or through ticket brokers that run secondary markets.  When the coronavirus began to affect businesses and events of all varieties, ticket holders at some events, such as a music festival in Austin, Texas, found to their dismay that they were not going to receive refunds under the provisions they agreed to called force majeure.

Investopedia states that “Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and restrict participants from fulfilling obligations.”

Churchill Downs has a very specific force majeure policy that gives the company wide latitude and basically precludes ticket refunds for unforeseeable developments like the coronavirus.  It reads in part:

“The date and time of any racing event is subject to change based on, among other things, force majeure events.  No refunds or exchanges will be permitted based on such scheduling changes.

Due to various weather situations, a race may be cancelled or postponed for the safety of the guests, jockeys, and horses.  All situations are unique, including force majeure, in that the cancellation policy is subject to change without notice.”

Further, ticket purchasers automatically agree to arbitration if they initiate a dispute.

A popular and reputable online ticket broker (intentionally not identified by name here) that specializes in Kentucky Derby and Kentucky Oaks tickets has a very restrictive refund policy that is spelled out on its website in bold-faced capital letters:

ALL SALES ARE FINAL. WE ARE NOT RESPONSIBLE FOR WEATHER RELATED EVENTS, STRIKES OR OTHER LABOR DISTURBANCES, LOSS OF POWER, FIRE, ACTS OF GOD, HEALTH CRISIS, ACTS OF TERRORISM OR ANY OTHER CAUSE BEYOND OUR REASONABLE CONTROL THAT COULD CANCEL, MODIFY OR RESULT IN THE RESCHEDULING OF THIS EVENT.

By contrast, StubHub has a very customer-friendly policy:

“Our policy is to provide a full refund with fees if an event is canceled.  In addition, given the current environment, if an event is canceled, customers can opt to receive a StubHub coupon valued at 120% of the original purchase. This coupon can be applied toward a future event of their choosing.”

When buying tickets to any event in advance, the age-old caveat “to read the fine print” is sound advice.

Copyright © 2020 Horse Racing Business