Talk About Jumping the Gun!
December 10, 2009
So everyone has been reporting that Churchill Downs has purchased the online gambling site YouBet.com and that the state of Kentucky was in an uproar – us included. However, it would seem that we all jumped the gun a little and that this is not the case. Churchill Downs has not purchased the online gambling company, but they are working on a deal to do so.
The online gambling site said that they were in negotiations with the race track to be purchased, but that the deal was not yet completed. According to the Los Angeles Business Journal this is correct. One big reason that the deal has not gone through is that the shareholders of the online gambling company feel as though they are being ripped off. They say that the race track is paying way less for the site than it is worth.
They say that the online gambling company has not “upheld their fiduciary duty” to them and that they entered into a deal that “undervalued the company.” This of course goes with the question that everyone is asking – how can a race track in the United States legally own an online gambling entity? There is a question as to the legality of the deal from the perspective that the UIGEA made online gambling illegal in the country.
Some say that since horse racing is allowed online that the online gambling site is perfectly within their legal rights, but others say that a spade is a spade. This online gambling site offers more than just horse racing, and therefore should not be allowed to be owned by a US based company.
