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Nevada bookmakers in dispute with Churchill Downs on Kentucky Derby pari-mutuel wagering

Nevada bookmakers are locked in a dispute with Churchill Downs that, barring a last-minute resolution, will prevent the state's sportsbooks from offering pari-mutuel wagering on the Kentucky Derby.

The dispute is centered on a price increase requested by Churchill Downs for data from the track, which bookmakers use to take pari-mutuel wagers, according to sources familiar with the negotiations. Without the data, the state's sportsbooks will have to take bets on the Kentucky Oaks and Kentucky Derby outside of the pari-mutuel pool.

On Aug. 28, the Nevada Gaming Control Board granted "industry-wide approval to determine the winners of or payout on wagers" on the Kentucky Oaks and Kentucky Derby.

Prior to the dispute, which began several months ago, Churchill Downs was charging Nevada sportsbooks roughly 4.5% of every wager placed on races held during its spring meet. According to sources familiar with the negotiations, Churchill Downs is now asking for around 5.5% of the money wagered at Nevada books and around 10.25% during Derby weekend.

Churchill Downs did not respond to multiple requests for comment from ESPN. A spokesperson for the Nevada Pari-Mutuel Association did not return phone messages left by ESPN.

As of Thursday morning, Nevada was balking at Churchill Downs' price hike and was instead preparing to book the races on its own, like the state's sportsbooks did in the 1970s and 1980s. Booking the races outside of the pari-mutuel pool, however, increases the risk for the sportsbooks. As a result, sportsbooks put a cap on potential maximum winnings from exotic bets like exactas, trifectas and daily doubles.

According to Churchill Downs, a record $165.5 million was bet across all sources on the 2019 Kentucky Derby, which finished in controversy. Favorite Maximum Security was disqualified after crossing the finish line first, making long shot Country Wide the winner. A $1 trifecta bet on last year's top three finishers paid $11,475.30. This year, without access to the pari-mutuel pool, Nevada books could cap payout odds on exotic bets like the trifecta at 500-1 or less.

"The most important thing is that we know our customers love the Derby, and it's our obligation to do the best we can and give them something to bet," Art Manteris, vice president of race and sports for Station Casinos, told ESPN. "They do deserve the Derby -- the best or one of the best races of the year. These race fans love the game, and they deserve to be able to watch it and bet on it at our racebooks. We've got to give them something.

"Our race handle has been surprisingly strong this summer," Manteris added. "And Saturday our guests will be betting and watching the NBA playoffs, NHL playoffs, a full slate of MLB games and the big race. So we are running on all cylinders. Then, Thursday the NFL begins."

More than $30 million was wagered on horse racing in May 2019 with Nevada racebooks. That amount is expected to be cut significantly if the state's books do not offer pari-mutuel wagering.

"Of all the things I've been to in the world, all the different events, the Derby would be at the top of the list to go again," Chris Andrews, a veteran Las Vegas bookmaker who's now with the South Point Casino, told ESPN. "But here in Las Vegas, it's just not as big of deal."

Tiz The Law, at 3-5, is the odds-on favorite to win Saturday's Kentucky Derby.