Do racetrack incentives lead the way to a drug-free future?

CLICK IMAGE TO READ FULL ARTICLE

Relative values - the Clement brothers

CLICK ON IMAGE TO READ ARTICL

THIS ARTICLE FIRST APPEARED IN - EUROPEAN TRAINER - ISSUE 43

Calvin Borel - the leading Kentucky Derby winning jockey in profile

Calvin Borel’s portrayal on the mural of Kentucky Derby-winning jockeys at Churchill Downs, painted by the renowned artist Pierre “Peb” Bellocq, had already undergone minor surgery in 2009, when the jockey followed up a 2007 Derby on Street Sense with a win aboard Mine That Bird.

Frances Karon (European Trainer - issue 31 - Autumn 2010)

Drugs in American racing and the role the vet has to play

CLICK ON IMAGE TO READ ARTICLE

(European Trainer - issue 26 - Spring 2009)

Global Superbet - Can it take horseracing to a bigger stage?

Twenty-five years ago John R. Gaines in Kentucky came up with an idea, the Breeders’ Cup series. Gaines felt that Thoroughbred racing needed a high profile day, which would make it possible for the sport to compete with NFL, NHL and NBA in the media picture. Everyone involved in racing agreed, just as much as they agreed that Thoroughbred breeding and racing needed new innovations, offering opportunities for more international competition with chances of winning bigger purses.

Has it worked? Partly, and the Breeders’ Cup has most certainly been more a star actor than just another face to the stage. This year, the International Federation of Horseracing has been working on another new idea, of a totally different nature. Again, the reason for exploring new products for the sport is that we are badly in need of legs to stand on in the increasingly competitive betting market. While turnover on horseracing, according to figures released by the bookmaking industry, has levelled out, it has increased markedly in other sports. In Europe, football is the sport attracting the biggest betting figures.

One big difference between the two sports, as far as betting is concerned, is how international football has become. The Champions League, the UEFA Cup, World Cup Finals, European Cup Finals and their qualifying rounds, and the Copa America, combine for a huge, huge betting market – just in Europe. Add in markets like Hong Kong and Australia and the total figures are truly staggering. With football fans from all over the world logging on to bet on and tuning in to watch these big international matches on a weekly basis, it is almost unbelievable that no betting firm has come up with a weekly “Football Superbet.” For instance, a multi-leg wager where you need to predict home win, draw or away win in, say, ten or twelve high profile games. With a global, massive pool, it would become a lottery for the thinking fan.

Strange as it may seem, quite a few in this world still prefer to use their brain, their own knowledge, when betting. They do not want to bet on numbers games where the odds are stacked heavily against them. Without products to stimulate them, these brains will soon no longer be potential players, not when it comes to horseracing betting, that’s for sure. They will either turn their backs on betting altogether or they will look for other challenges. There is no longer a shortage of alternatives. Poker and bridge, to name but two card games, are tailor made for internet wagering involving thinking players. And these products are considerably cheaper to produce, and run, than horseracing. There is no comparison.

Let’s get back to the idea of a superbet. While other sports do not seem to have grasped such an idea, horseracing is, for a change, a couple of lengths ahead. This year, the International Federation of Horseracing began developing and testing a new bet, called the “Global Trifecta.” This wager is very much in its infancy, and it has been a complicated baby to conceive, but it is an excellent idea that ought to be given all the backing it can get. It has already been tested with international pools on a small number of flat races this season, but with a “soft launch approach,” according to Totesport’s (Pari-Mutuel operator in the UK) PR manager Damian Walker. If it can be refined, and marketed, in the right way, it has every chance of becoming a big success. Not just as a betting product, but also as a tool to promote the sport of horseracing worldwide. “Mauritz Burggink, at the IFH in Paris, is the man behind the idea of a superbet,” Damian Walker explains, “it is all quite simple. With bigger liquidity in the pool, there will be bigger dividends, and a bet like this can compete with all the lotteries. A lot of work has been done already, and the ultimate aim is to have a Global Superbet every week. We have tested it, but I must stress that the betting on a few races in 2007 has been nothing more than ‘dipping a toe in the water’ as there are various complications to overcome. Not least the fact that different countries have different IT-systems, and local laws also affect what we can and cannot do.”

Walker explains how punters in big markets like Australia, Hong Hong, USA, South Africa, Singapore and Europe were this year given the opportunity of betting into a global trifecta pool on some Group One events. “The product cannot be properly tested without real bets, though testing such a product must begin on a relatively small scale,” he says, “and that is why we have given this a quiet launch. I am convinced that this will be a big success, and it can change the world of betting on horseracing dramatically.

The progress of this project will be high on the agenda when representatives meet in Tucson, Arizona this December.” The global trifecta - where one has to select the first three home in the exact order - was opened for betting on the Prix de Diane at Chantilly in June. This is not a high profile race internationally, my guess is that a large proportion of racing fans in Australia, Hong Kong and USA have never heard of the race. Walker agrees, but a guinea pig is a guinea pig, and he has some interesting figures from this race. “The turnover was 60,000 euros,” he tells us, “and the dividend was 1,767-1. If the bet had been settled on the UK pool alone, the dividend would have been just 929-1. This shows what a difference a bigger pool can make.” That may be, but the pool was nowhere near what it will, hopefully, be one day, and it was too small to provide the operators any sort of hard conclusions. To the customers, however - the punters - a 60,000-euro pool is big enough to enable them to assess the value of the product.

Did this trifecta pay over the odds, under the odds, or just about normal? Well, UK punters probably would not have a clue, as they are absolute beginners when it comes to trifecta betting, most of them not even that. Most gamblers in the USA, on the other hand, would have been able to take a quick glance at the result, the odds for the first three home, the number of runners, and say whether a 1,768-1 return was good or bad value. The Diane had 14 runners and was won by West Wind, who returned 9-2. She beat Mrs Lindsay (14-1), with Diyakalanie (40-1) third. Almost as a rule of thumb, a North American exacta, on a race like this, will return at least the product of multiplying the tote win odds on the two horses involved. Plus some if the shortest priced horse is second, minus some if the shortest priced horse in the winner. In this case that would be 5.50 (9-2) multiplied by 15 (14-1), which is 82.50.

So, with a 40-1 shot finishing third, was 1,767-1 good value? Finding a race to compare this to in the USA is not at all difficult. The Breeders’ Cup Mile has a habit of returning trifectas that include both a winner at a fair price and a real longshot, and also excludes the favourite. And it is a race with a pool made up of punters from all kinds of corners of the world. The 2003 edition of the BC Mile produced an almost identical trifecta to the one seen in this year’s Diane. Six Perfections (5-1) beat Touch of The Blues (12-1) and Century City (39-1). The race had 13 runners. The trifecta returned 2,627-1. Which is a whopping 48% higher than this year’s global trifecta on the Diane. Although interesting enough, this is not at all a fair comparison, as the trifectas on the Breeders’ Cup races nearly always pay well over the odds, simply because the majority of the pool is made up of punters with little or no knowledge of racing. The pool on the Diane was almost certainly made up of punters who knew racing well, and also knew enough about the sport to know that the bet existed. 1,767-1 was therefore a very good return, indicating that it could easily have paid 2,600-1 with a bigger pool. For the record; the trifecta pool on the 2003 BC Mile was $2.3 million. A whole different ballgame, and also where one is aiming to take the global superbet.

NOT NECESSARILY A TRIFECTA

“The global superbet does not necessarily have to be a trifecta,” Walker continues. “There is a good chance that it will be a carbon copy of the Triple Trio, a highly successful bet in Hong Kong.” The Triple Trio is a multi leg bet where one has to select the first three finishers, in any order, in three consecutive races. At last year’s Hong Kong International day, when the bet was made up of two handicaps and the Hong Kong Sprint, the dividend was 301,707-1 No space here to take an analytical look at the combined odds of all the nine horses involved, but it makes sense to mention that the three winners paid 14-1, 5-1 and 3-1. A win treble at these odds would return 359-1.

It may be a pure coincidence but it is interesting to note that the Triple Trio returned 840 times the win treble, which is not at all 840 times easier to predict. We can understand why a bet like this is a real alternative to playing the lotteries. On the other hand, offering a global triple trio may have its disadvantages, as one is then asking punters to analyse three races, possibly staged in three different countries. Nobody, nowhere, will be confidently familiar with the form of all the horses. Thus, perhaps a trifecta on one race is a better way to go. “Another issue we need to address is the cases when the bet is not won, and creates a rollover, or jackpot if you will,” Walker comments. “Punters in one country may not be too happy about their money moving on to a different jurisdiction, where they will be at a disadvantage when getting involved.”

When betting on horseracing, local knowledge does count for a lot, but these are changing times, and he or she who can find the right angles on and the right understanding of international racing will stand the best chance of collecting on a global superbet. Nevertheless, without the local customers - the two-pound, two-euro or two-dollar punters joining in - the pool will never be massive enough to compete with the lotteries. Perhaps there is a simple solution to this problem. The weekly races will probably have to be scheduled in advance, but “reserve races” could be assigned the following week in the country where the race or races take place, meaning that, when there is a rollover, the global bet stays in one place until it is won. Of course, this could take weeks, especially if the bet is a triple trio, though perhaps not if it is a one-race trifecta.

Has an American style superfecta been discussed at all? “Yes, it has,” Walker replies. “The global trifectas we have had this year have mainly been like lab testing, and various models will be discussed and analysed before we land on one model. We are testing technical solutions just as much as we are testing the nature of the bet.”

COMPETITORS WILL EMERGE

I love the idea of a global superbet, but wonder, will it really happen? Will it be a success? This is early days, but, please, make sure that those two words are not too easily swallowed too often within horseracing, in particular when it comes to creating and promoting new products. We have heard them so many times before. Sometimes those ‘early days’ become ‘all time.’ Horseracing authorities and regulators, in Europe in particular, so often come across as so incredibly conservative and as such a stubborn bunch, that the one word that springs to mind is ‘immature.’

Racing still seems to be run from offices that are, if not totally then at least seriously partly, lagging behind the rest of the world. I would be delighted to be convinced that I am wrong about this, as I also fear that this state of affairs will be one of the biggest stumbling blocks for a new global superbet. Things are simply moving way, way too slowly. Take the lack of European racing rules, a topic that came to the fore after this year’s Prix de l’Arc de Triomphe. Of course, this has been discussed before, but nothing seems to happen. Why not make a couple of quick moves, why not just do it? Make those changes. Toss a couple of coins if need be to settle a couple of disagreements between the English and the French, and get on with it.

Bookmakers taking more and more and more bets on football, and fewer and fewer on racing, do not care about the lack of a sensible set of international racing rules. They are busy making money, and giving the gambling market new, lucrative products, which is precisely why the development of a new global bet must be speeded up. Why? I’ll tell you why. Because as soon as this concept becomes more high profile, through proper marketing and media coverage, bookmakers will grab the idea, adapt it to some other sport, maybe even other sports, and create a new product within a matter of weeks. All of a sudden, racing will be behind, again.

The International Federation of Horseracing may be a couple of lengths ahead with their development of a global pool bet at the moment. A couple of lengths, however, is not exactly a comfortable and commanding lead on a playing ground which is changing so fast, and is so volatile, as the betting market. Not when you are involved in the race for the betting dollar, euro, or pound. Unless you are by far the biggest, financially strongest player, it can actually be a disadvantage to lead the way. It is only an advantage if you are smarter, considerably smarter. Let’s hope we are.

Who is Controlling Racing's TV Signals?

By Howard Wright

For all the differences between the horseracing and betting landscapes in Britain and North America - size, history, administration and race and bet types, - one similarity of principle has emerged over the last five years. The live televised racing scene has crystallised into two entities, and the impact on both the foundation and prosperity of the sport and the availability of its betting facilities has been thrown into the blender.

 In Britain, the 60 racecourses have lined up equally between the two cable and satellite broadcasters - Racing UK (RUK), with 30 tracks on board, and At The Races (ATR), with 29, but soon to become 30 when the new venue of Great Leighs attains its long-awaited completion.

In North America, the dominance and extensive exclusivity of TVG has been challenged by the major corporate racetrack owners Magna Entertainment Corp. (MEC) and Churchill Downs Inc., which have jointly formed the cable and satellite broadcaster Horseracing TV (HRTV), shutting out TVG from coverage of their many high-quality courses.

Into the mix have been catapulted bookmaking, advance deposit wagering and online betting facilities, the biggest attraction for the public and the most significant cash provider for racing outside the deep pockets of racehorse owners.

What will come out at the other end, and when, is impossible to say with any certainty. Interested parties have their own views, based on which side of the divide they sit, but it would take someone akin to a soothsayer, let alone an experienced industry observer, to imagine where the path will lead.

The road-makers are still at work, using different maps to plot their separate ways, and sometimes giving the impression they are making up the journey as they go along.

Two examples of intricacies that can only ripen confusion and spread uncertainty are worth recording, before attempting to untangle the web spun by rights-holders seeking to manage content to best advantage.

Ascot, Britain’s best-known international venue, lined up with At The Races when the second coming of that daily satellite broadcaster emerged from the ashes of a failed venture known as Attheraces in June 2004. At the time, as Ascot negotiated with its bankers over loans to service a £200 million redevelopment scheme, huge uncertainty surrounded previous rights, which may have meant Ascot having to repay a significant sum. Partly to allay the fears of financial institutions, Ascot fell in with ATR, and was given a five per cent stake in the company for its allegiance.

However, the contract, which runs until 2012, did not include pictures supplied to betting shops, and when these came up for renegotiation earlier this year, Ascot decided to jump on to the back of another media rights horse. It sided with Amalgamated Racing - Amrac for short - which had set up a joint venture with the stock market-quoted betting-shop services provider Alphameric to introduce a new channel, Turf TV, offering pictures from aligned courses to off-track bookmakers.

Until then, for 20 years the betting industry had had only one company to deal with, Satellite Information Services (SIS), which took pictures from Racing UK courses under contract, and by sub-contract from At The Races’ courses through an organisation called Bookmaker Afternoon Greyhound Service (Bags).

Bags has outgrown its title by owning horseracing rights and covering evening racing, while ATR controls no betting-shop picture rights in Britain, but it does use SIS to produce its programmes on a daily basis, and has a contract with it to distribute pictures into betting shops in overseas territories such as Sri Lanka.

Confused? You soon will be…

Explaining the decision to go with Amrac, Ascot’s finance director Janet Walker says: “We believe Amrac is the best vehicle for racing’s commercial relationship with the betting industry. And the decision has no impact on our separate satellite media rights arrangement with ATR, and should in no way be interpreted as a negative reflection on our relationship with that company.”
In North America, the picture began to get decidedly murkier in March this year, when Churchill Downs bought a 50 per cent stake in HorseRacing TV, which had previously been owned wholly by Magna.

It was the biggest in a series of deals that the two sides concluded at the time, and out of the arrangement came the formation of another joint venture called TrackNet Media Group, through which one partner’s horseracing content would become available to the other’s various distribution platforms - Magna’s advance deposit wagering (ADW) site XpressBet, Churchill’s similar newcomer TwinSpires.com.

TrackNet would also deal with providing content, from pictures to betting availability, for third parties, it emerged. These were to include racetracks, OTBs, casinos and other ADW operators - but not TVG, it seemed; well, not without a groundbreaking change of heart.

HRTV immediately took over coverage of Churchill Downs, and as contracts run their course, it picked up exclusive rights to Arlington Park on August 6, Fair Grounds in November and Calder on January 3, 2008.

It was not long before the consequences became clear. The 2007 Kentucky Derby was shown exclusively on HRTV and bet on through TwinSpires and winticket.com (whom Churchill Downs subsequently purchased). TVG and its wagering partner Youbet did not get a look-in. The same applied to the second races in the US Triple Crown, the Preakness, run at Magna-owned Pimlico, but come the last leg, the Belmont, exclusivity returned to TVG, under its contract with the New York courses.

Just before the Kentucky Derby, a contributor to the Turf’n’Sport website was moved to remark: “At the best possible time of the year for generating positive horseracing buzz, the industry has succeeded in turning on itself and creating negative headlines. At a time when online racebooks that offer betting on all major Thoroughbred tracks continue to make inroads, and at a time when the World Trade Organisation has ruled America must open up horse betting to offshore racebooks, the existing companies are bitching at each other.”

The punchline summed up: “How long will it take horseplayers to catch on and simply move their accounts offshore?”
He clearly is not the soothsayer identified earlier, who might supply the answer to what will come out of the mix. But he does have a point.

A similar observation holds good in Britain, though with a different emphasis. At times the two sets of particular circumstances in Britain and North America do run along parallel lines, but at others they are subtly interlinked and completely separate. The differences, and some of the connections, can be seen in the betting arena, where HRTV and TVG have their own direct outlets, but Racing UK has a joint venture and At The Races remains corporately aloof while relying on bookmaker partners to provide one of 30 income streams.

The key in Britain is Turf TV, the betting-shop channel set up in part by the Racing UK courses, which flickered into life with six exclusive members (including Ascot) and a small percentage of betting-shop supporters, mainly small independents until the Tote joined up, but none of the four majors, which account for 80 per cent of the UK estate.

On January 1, Turf TV will be bolstered by 25 other RUK courses. The split will be equal - just as it is in the choice facing satellite viewers, who need two TV accounts to cover the field - and the dominant bookmakers, who have lined up solidly behind SIS and the status quo, will have to decide whether they can survive on half rations for their horseracing coverage.

On that decision could depend a large slice of British racing’s future prosperity. The situation in North America depends on whether racecourse and betting operators choose TrackNet or TVG. It seems they cannot have both.

In each case, the participants have made their positions clear.

Robert Evans, president and CEO of Churchill Downs, told a shareholders’ meeting: “I understand our objectives on occasion may ruffle a few feathers. That is one of the things about competition. It is not really our intent just to go out and be disruptive. Our intent is to compete aggressively and to attract more customers to our business. There are always a few potential consequences when you challenge the status quo.”

In response to the Kentucky Derby impasse, TVG general manager David Nathanson said: “We attempted to negotiate with TrackNet Media and its owners in good faith, but thus far have not seen any terms from them indicating a strong desire to reach a mutually beneficial long-term agreement. We remain open to negotiating an agreement that is in the best interest of the racing industry, the respective parties and, ultimately, the racing fan.”

In Britain, Turf TV has become the dividing line between broadcasters and rights-holders Racing UK and At The Races.
RUK executive chairman Simon Bazalgette reflects: “Historically British racing has not been good at being commercial about negotiating its media rights, and has allowed third parties, such as BSkyB (the satellite provider) and the bookmakers, to get a lot of the economic benefit. Now racecourses can manage the business themselves, keeping more of the commercial benefit in racing and having greater control over the presentation of the sport. Turf TV is a great deal for the racecourses.”

ATR chief executive Matthew Imi takes a dispassionate view of Turf TV, since betting-shop rights do not figure in his company’s portfolio. “It will be interesting to see how it works out, but we’re not threatened by Turf TV,” he says. “The most fascinating aspect is not whether Turf TV gains any material traction among the big bookmakers, but what the net effect will be on British racing. For us, though, it’s a valuable opportunity to concentrate on our core business, which is to exploit our partners’ rights. Getting together in the UK with Racing UK is not on our radar.”

It might not be war, but for the moment, and maybe for the foreseeable future, it clearly is every man for himself.

HOW THE TELEVISION BROADCASTERS LINE UP

NORTH AMERICA
HORSERACING TV (HRTV) 
Owned by: Joint venture of Nasdaq-listed Magna Entertainment Corp. (MEC) and Churchill Downs Inc.
Operates: Subscription national cable and satellite TV horseracing network. Live racing content is acquired by sister company TrackNet Media Group. Estimated coverage 11 million homes.
Racetracks covered: 70-plus Thoroughbred, harness and Quarter Horse tracks, including Santa Anita Park (California); Churchill Downs (Kentucky); Gulfstream Park, *Calder (Florida); Lone Star Park (Texas); Arlington Park (Illinois); Pimlico (Maryland). International: UK tracks on Racing UK.
MEC operates off-track betting network, and national account wagering business XpressBet. Churchill Downs recently opened online national account wagering service, TwinSpires, and more recently acquired account wagering operator AmericaTAB and affiliates.
Overseas coverage: Racing World channel in Britain, joint venture with Racing UK.
*effective January 3, 2008

TVG
Owned by: Gemstar-TV Guide International Inc., global multi-media and technology company, including loss-making TV Guide magazine, in which Rupert Murdoch’s News Corporation has 41 per cent stake.
Operates: Subscription national cable and satellite TV horseracing channel, and online betting network. Estimated coverage 50 million homes.
Racetracks covered: Turf Paradise (Arizona); Del Mar, Fairplex Park, Hollywood Park, Los Alamitos, Oak Tree (California); **Calder (Florida); Prairie Meadows (Iowa); Ellis Park, Keeneland, Kentucky Downs, Turfway Park (Kentucky); Meadowlands, Monmouth Park (New Jersey); Ruidoso Downs, Zia Park (New Mexico); Aqueduct, Belmont Park, Saratoga, Yonkers Raceway (New York); Emerald Downs (Washington). International: Japan, UK tracks on At The Races. Some contracts with tracks owned by HRTV partners due to expire over next year. Has arrangement with online account wagering operators Youbet and The Racing Channel.
Overseas coverage: At The Races in Britain, through arrangement with TRNi and the Dubai Sports Channel in the UAE.
**through January 2, 2008

BRITAIN
RACING UK (RUK)
Owned by: 30 British racecourses, split Jockey Club Racecourses (50%), Chester, Goodwood, Newbury, York (sharing 25%), 11 smaller courses (sharing 25%). Owns all rights, including terrestrial TV, except for licensed betting offices (belong to Amrac, see below and facing).
Operates: Subscription national cable and satellite (via BSkyB service, part of Setanta Sports package) TV horseracing channel, with links to small number of bookmaker partners; international channel, Racing World, in partnership with MEC and Churchill Downs; licensed betting-office channel, Turf TV, set up by Amalgamated Racing (Amrac), joint venture between Racecourse Media Services (separate company owned by RUK courses and Ascot) and betting-office provider Alphameric; overseas delivery of pictures and data from RUK courses in association with South Africa-based racetrack and betting operator Phumelela. About 200,000 subscribers (including Setanta, forecast to grow to 1 million when Premiership football comes on stream in Autumn 2007).
Racetracks covered: Aintree, Ayr, Bangor, Beverley, Carlisle, Cartmel, Catterick, Cheltenham, Chester, Epsom, Goodwood, Hamilton, Haydock, Huntingdon, Kempton, Ludlow, Market Rasen, Musselburgh, Newbury, Newmarket, Nottingham, Pontefract, Redcar, Salisbury, Sandown, Thirsk, Warwick, Wetherby, Wincanton, York. International: France, Dubai, occasional other major races;  HRTV (see above) coverage of North America on separate channel, Racing World.
Overseas coverage: North America, joint venture with HRTV; Australia, jointly with At The Races; other territories, partnership with Phumelela (South Africa).

AT THE RACES (ATR)
Owned by: broadcaster British Sky Broadcasting (46%), racetrack owners Arena Leisure (46%) and Northern Racing (2%), and racecourses Ascot (5%), Newton Abbot, Plumpton and Ripon. Owns all media rights of participating courses except licensed betting office and terrestrial TV rights.
Operates:  National cable and satellite (part of Sky Sports package) TV horseracing channel, with links to bookmaker partners. ATR courses shown in betting shops through agreement with Satellite Information Services (SIS), which sub-contracts rights from Bookmaker Afternoon Greyhound Service (Bags). BSkyB subscription platform covers 8.5 million homes in UK.
Racetracks covered: Ascot, Bath, Brighton, Chepstow, Doncaster, Exeter, Fakenham, Folkestone, Fontwell, Hereford, Hexham, Kelso, Leicester, Lingfield, Newcastle, Newton Abbot, Perth, Plumpton, Ripon, Sedgefield, Southwell, Stratford, Taunton, Towcester, Uttoxeter, Windsor, Wolverhampton, Worcester, Yarmouth. (Great Leighs will become 30th on opening). Plus all 27 Irish courses. International: France, Dubai, Germany, occasional other major races; TVG (see facing) coverage of North America.
Overseas coverage: North America, arrangement with TRNi, through to TVG; Australia, jointly with RUK; other territories, distribution by SIS.