TV Games Network (TVG) reached a long-term distribution
deal last week with AT&T Broadband & Internet Services, although executives said
they would roll out the horse-racing-wagering network conservatively as they ramp up its
interactive aspects.
The service, owned by TV Guide Inc., will initially launch
on several AT&T Broadband systems in Kentucky, Maryland and Oregon, reaching about 1
million subscribers, later this month, TVG vice president of communications Rick Baedeker
said.
The launch will coincide with the service's
interactive-wagering component, which will initially allow viewers to place bets via
telephone and over the Internet.
Baedeker said that during the start-up phase, the service
would be able to handle about 10,000 wagers per month, with an eventual ramp-up to 100,000
within a few months. As the service is able to handle more volume, it will be rolled out
to more subscribers.
He added that TVG could be in systems in as many as 15
states by the end of 2000. "We purposely wanted to launch softly to make sure the
technology works," he said.
Nevertheless, network executives believe there is a major
untapped revenue opportunity among horse-racing fans and legal bettors. While there are 6
million racetrack patrons annually, Baedeker said, more than 105 million Americans made
legal wagers in the past year, representing more than $640 billion.
While TVG will offer the service free-of-charge to cable
operators and direct-broadcast satellite providers, the network will charge a fee of 25
cents per transaction. TVG, however, plans to share a cut of revenues from wagering and
advertising with its cable and DBS affiliates, sources close to the situation said.
TVG has exclusive, long-term agreements with several major
racetracks, including Aqueduct Race Track, Arlington International, Belmont Park,
Churchill Downs, Fairplex Park, Laurel Park and Pimlico.
