Firm Took a Gamble at Races : Spend a Buck Insurer Tried to Recoup Loss
The insurance company that covered the $2-million bonus that Spend a Buck won last year reportedly bet close to $200,000 on the colt in an unsuccessful effort to recoup its losses on the policy.
A $100,000 win bet in the Kentucky Derby at Churchill Downs produced a net profit of $410,000 on Spend a Buck, whose payoff for a $2 bet was $10.20.
In the Jersey Derby three weeks later at Garden State Park, a representative for the insurance company reportedly bet between $90,000 and $100,000 on Spend a Buck, who was a 1-20 favorite.
Most of that money, however, was bet in an exacta, combining the 10 other horses in the race, and in a late double, combining Spend a Buck with five horses running in the race before the Jersey Derby.
The exacta paid only $7.60 and the late double returned a paltry $5.20, resulting in an undetermined loss.
Charles Tea, a vice president for Republic Financial, the Dallas insurance company that underwrote the $2-million bonus, said he has no knowledge of the bets. But The Times, through mutuel department sources at Churchill Downs and Garden State Park, was able to confirm that the bets were made.
By winning the Kentucky Derby, the Jersey Derby and two earlier races at Garden State Park, Spend a Buck earned a $2-million bonus. Garden State’s premium on the policy was reportedly $150,000.
Counting the premium and the money collected on the bet at Churchill Downs, Republic Financial recouped $560,000. But with no profit shown for the wagers in the Jersey Derby, the company lost more than $1.4 million on the policy.
It was reported earlier that a consultant for Republic Financial was fired after the company had paid the $2 million.
With the premium for this year’s $2-million bonus expected to double, to $300,000, Garden State decided to self-insure the possible expense. Fobby Forbes is eligible for a smaller Garden State bonus--$1 million--but would need to win Saturday’s Kentucky Derby and the Jersey Derby on May 26. Fobby Forbes is owned by Robert Brennan, the chairman of Garden State Park.
Brennan would not comment on Republic Financial’s bets at either track.
“One of the stipulations of the policy was that the coverage not be discussed publicly,” Brennan said. “Under the agreement, I can’t even tell you the name of the underwriter.”
On the day before last year’s Kentucky Derby, an early win bet of $44,000 was made on Spend a Buck.
“I nearly fell out of my chair when it turned up,” said James Filburn, director of mutuels at Churchill Downs. “The odds on Spend a Buck dropped to 9-5.”
Spend a Buck went off at 4-1, the second betting choice in the Derby behind Chief’s Crown.
Filburn said that a check was made out to a Dallas man for $224,400, representing the payoff for the $44,000 bet. Filburn would not disclose the name of the bettor.
“I don’t know about any other big bets on Spend a Buck,” Filburn said. “But it’s possible, if there was a $100,000 bet on the horse, that the money could have been spread around in smaller amounts over the two days that wagering was conducted on the Derby.”
Sources close to the mutuel department at Garden State, asking that their names not be used, said that when the large bets were made on Spend a Buck in the Jersey Derby, the bettor said that he had cashed a $500,000 bet on the horse at Churchill Downs.