Churchill Downs Inc. and Kentucky horse trainers have reached a three-year deal on race purses that guarantees a $1.5 million supplement to the money horses will be running for.

The agreement also brings to a close a 2008 dispute between Churchill and the Kentucky Horsemen's Benevolent and Protective Association over revenue from Internet wagering. According to a news release announcing the contract, the Kentucky HBPA and Churchill have agreed to dismiss claims against each other filed in federal court in Louisville.

Terms of the new agreement, including revenue-sharing percentages, were not disclosed.

Track president Kevin Flanery called the deal "good for horsemen, Churchill Downs, Kentucky's embattled horse industry and racing fans in Kentucky and throughout North America," in a statement.

"Churchill Downs' commitment to provide an additional $1.5 million to purses is an effort to protect Kentucky racing from states that supplement their races with expanded gaming revenues," Flanery said. "Our hope is that the purse supplement will help keep a few more horses and horsemen in Kentucky through 2010 while our united horse industry works for the passage of legislation that would allow additional gaming at racetracks and level our competitive playing field with tracks and breeding operations in those rival states."

Both the Kentucky HBPA and the Kentucky Thoroughbred Association praised the deal.

Churchill sued Kentucky horsemen in May 2008 after they joined horsemen in other states in blocking some betting on Churchill-owned tracks. The horsemen were seeking more revenue from advance-deposit wagering, which includes Internet betting. Churchill alleged price-fixing.

Kentucky horsemen countersued in July 2008, claiming they were owed $5 million from retaliatory purse cuts.