Via TD Thornton
A business partnership between performance metrics provider Thoro-Graph, Inc. and the New York Racing Association (NYRA) were billed as a “win-win” arrangement for both parties and pre-deposit (ADW) customers when it first launched in 2017. went bad, leading to a lawsuit being filed in the New York State Supreme Court.
According to the civil complaint, Thoro-Graph is suing both the NYRA and their NYRA Bets platform ADW for non-payment of at least $333,000, which Thoro-Graph believes is a reasonable cut to incentivize those Equestrian become a customer of NYRA Bets through a free, member-based portal called Thoro-Graph Player Services (TGPS).
Thoro-Graph claims in the complaint that its portal increased the NYRA’s betting settlement by $100 million over a period of approximately 5 years, “through the joint venture alone that has resulted in 3 years of revenue. million dollars” to the NYRA.
When the alignment between the two entities was first announced in 2017, the deal was billed as giving Thoro-Graph an ADW partner, while NYRA Bets acquired a large pool of new customers.
Equestrian players will also benefit, a TGPS executive explained at the time of launchbecause they will have access to “concierge level assistance”, volume-based betting discounts, on-track examination facilities, and discounts on Thoro-Graph handicap products .
But according to the lawsuit, “Defendant NYRA failed to perform its part of the settlement.” [by allegedly not paying] Karen Murphy, an attorney for Thoro-Graph, wrote in the December 19, 2022 filing.
“That breach has resulted in hundreds of thousands of dollars in damages to date and has impacted the value of Plaintiff’s company resulting in Plaintiff’s additional loss of profits,” the complaint states.
The filing states the dispute relates to the calculation of net revenue: “Plaintiff is entitled to all 50% of respondent’s share of NYRA’s revenue generated from bets on NYRA races by non-residents of NYRA races. New York and pay the defendant NYRA. In failing to do so, defendant NYRA materially breached its core financial obligation to pay Plaintiff all of its revenue under the terms of the joint venture.”
The complaint alleges that Thoro-Graph attempted a “faithful settlement attempt” to address the alleged increase in non-payment, including making a written request for the amount by date. June 13, 2022 and a meeting with an NYRA representative to discuss the matter.
“[NYRA’s] response was to intimidate Plaintiff by threatening to terminate the joint venture and fail to resolve the failure to pay Plaintiff all 50/50 shares,” the lawsuit states.
The NYRA then adopted a letter on December 12 giving 180-day notice of termination of the partnership. It was that action that led to Thoro-Graph’s lawsuit a week later demanding “compensation for damages not less than $500,000 [and] additional estimated damages for the remainder of the term of the present Agreement.
The court has set a February 10 date for the defendants to file responses. TDN asked a spokesperson for the NYRA whether the racing association or NYRA Bets would like comment prior to that filing, and how terminating TGPS might affect horse riders using the portal. information.
“NYRA will honor the confidentiality terms agreed to by the parties involved and respond to the court by February 10. This contractual dispute does not and will not affect NYRA customers,” said Patrick McKenna, NYRA vice president of communications, wrote in an email.
The “Convenience Termination” letter that the NYRA served on Thoro-Graph is expected to go into effect June 10.
“That termination notice has now been given solely because Plaintiff has made it clear that it will make legal efforts to defend its rights under the Agreement in order to receive its full portion of compensation.” Thoro-Graph’s complaint states.
“Plaintiff has performed his obligations under [the contracted terms] by maintaining its website as ‘best in class’ and offering free and discounted Thoro-Graph data, this has resulted in NYRA Bets signing up over 1,700 horse players. This was done by Plaintiff without any marketing assistance from the NYRA Parties…” the complaint states.
“In 2017, Plaintiff increased the NYRA Bets defendant’s settlement amount to $3.1 million,” Thoro-Graph court filings state. “In 2018, Plaintiff’s contribution was $10.7 million; in 2019, the contribution amounted to $15.3 million; 2020 contribution is $22.7; in 2021 the contribution will reach 24 million USD; [At the time the Dec. 19 lawsuit was filed] Plaintiff’s Contribution [was] is on track to hit $25 million, bringing the total additional processing to over $100 million.”
Digging deeper into the alleged non-payment, the complaint states that the NYRA’s deduction of “imported storage fees” from the calculation of net sales is at the heart of the controversy.
The complaint puts it this way: “Clearly, what the NYRA defendant is claiming as a “server import fee” is simply the amount NYRA Bets RECEIVED solely as a result of “Qualifying Bets” by those who did not. must be a resident of New York on the NYRA CONTENT and is subsequently transferred to and BY NYRA PARTY AS REVENUE.”
Attorney Murphy, when contacted TDN, said, “For now, we’ll let the complaint speak for itself. We will have more to say after the NYRA response.”
