Sunday, 15 June 2014

Going Beyond the Scoop 6 – Why there should be more innovation in betting, ideally with a racing-owned betting operator

I think most of us who like a bet were delighted when the Scoop 6 was finally won, and the great eight carried off their £1.3m each – partly because it was costing a fortune every week to take part, in a vain attempt to win it, and partly because the races being selected were becoming increasingly impossible to assess. Indeed, you felt that Betfred were going out of their way to make it difficult. This was also not helped by some of the races being absent from terrestrial TV. A cynic would also argue that the cut to Betfred from organising the Scoop 6 had become a nice little earner …… or even a nice large earner?

Peter Jones, when he was boss of the Tote, invented the bet over a decade ago, and when it began it always included the best races of the day. That is definitely not the case any more, and it is debatable whether this is now a horse-racing bet or just a lottery bet. However it was designed to produce a big pool with a huge pay-out, and they certainly achieved that in May. The Scoop 6 has been a great success, and notwithstanding the reservations above, it is undoubtedly a good example of betting innovation. But do you think bookmakers generally are innovative, or that their business models and offerings are somewhat tired and old-fashioned?

Personally, I feel that the whole sector could do with a radical shake-up – both the bookmakers and the regulators in the Gambling Commission. I’ve discussed this with a number of our keen gambling owners, and one in particular has argued that their mission, “To ensure gambling is conducted fairly and openly”, is no longer being achieved. The largest gamblers now find that they can only bet if they lose; they are closed down if they win; and at best their bets are arbitrarily reduced or refused at the bookmaker’s discretion. And the sector lacks the necessary competition and creative leadership to drive positive changes.

So if you look at it from an owner perspective – as the largest stakeholder in racing, with an annual contribution between £0.5 and £0.75 billion on keep, training fees and bloodstock – would the sport gain if racing had its own betting operator? Many felt that was the case last time round, with the Tote privatisation, and an attempt was made (albeit late in the day) to try and put together a consortium of high net worth owners to take it over. When that failed, a massive opportunity was lost. In a couple of years’ time Betfred’s pool betting licence expires, and hopefully second time around the racing industry rises more forcefully to the challenge and takes on the traditional bookmakers with a completely different commercial model and purpose: “To become the most innovative betting operator in global racing: run by racing, for racing, with a highly compelling and innovative range of racing-specific bets that appeal to all gamblers both in the UK and worldwide”.

I know that Rachael Hood, the President of the ROA and wife of John Gosden, is already raising this issue and Owners for Owners are very much in support of it. Setting up a fixed-odds bookmaker that deals only with racing and which embraces the most modern technological and social media platforms could underpin the whole of racing’s finances and surely is worth examining closely from the standpoint of both the business case and the enablers to achieve it. To be successful, planning has to start soon.

In the meantime, the sport would probably gain from a forensic review of the practices surrounding how the Tote is currently being run. There is a fair bit of disquiet about manipulation of the pools and the take-out rates compared to the initial operating contract. The feeling is that it is just being run as a cash cow which, as ever, is hardly a stimulus to innovation.

This of course is not to say that there are no other major innovations possible. If the racing industry had a significant commercial profile in gambling, it could open up all sorts of collaborative ventures with both UK racecourses (such as leveraging independent racecourse betting, as at Chester) and also many different third parties in other territories around the world. Indeed, there may well be high net worth individuals, particularly in Asia, who could be very attracted by both the commercial opportunity and its centrality to great British racing – which by a considerable margin has the highest integrity in the world. Leaders, please step forward.

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.

Sunday, 1 June 2014

Happy 10th Birthday to Racing UK ….. Hopefully they will give much greater recognition to owners over the next ten years

Do you remember Rishi Persad’s opening remarks on the launch of Racing UK, back on 29th May 2004? I thought not. It was an interesting time for televised racing, because the first version of At The Races (ATR) had collapsed with the termination of their £307m, ten-year media rights contract, launched in 2001 with BskyB, Channel 4, Arena Leisure and 49 of Britain’s racecourses. ATR adopted the thuggish negotiating tactics (subsequently adopted by Arena Racing Company (ARC) and which have always been the default behaviour of bookmakers) of then threatening the racecourses that if they didn’t pay back the media money they had already received, they would be sued.

With hindsight, these threatening tactics jolted the key racecourses into a collaborative venture which must be regarded as one of the most successful in the racing industry’s history. Strong leadership from people such as David James (then Chairman of RHT Racehorse Holdings Trust – forerunner of Jockey Club Racecourses) and Simon Bazalgette (who became Racing UK’s Executive Chairman) led to the launch of RUK as a dedicated racing channel headed by Andrew Franklin (founder of the channel’s production partner, Highflyer). Despite a lot of early concerns, most of the top racecourses signed up, with Goodwood, Newbury, York and Cheltenham leading the way. It really was an excellent move, particularly with all profits being ploughed back into the sport. Racing UK’s parent company – Racecourse Media Group – delivered over £65m to racecourses in 2013, and the channel has at least 50,000 current subscribers.

Since then, we have seen BBC pull out of racing altogether and Channel 4 adopt a rather sterile approach to broadcasting with an unfortunate abandonment of some key personalities such as John Francome and Alastair Down, while ATR quite frankly irritates with its endless adverts for bookmakers and payday lenders while chopping and changing between the low-grade fare of all-weather and the lesser tracks.

Hats off to Racing UK on its birthday. Now for a challenge! Why is it that owners receive so little recognition from broadcasters? How often have you watched a magnificent performance, only to hear and see the horse referred to as “XYZ trainer’s horse”? No mention whatsoever of the owner. Equally, how often are you irritated by a microphone being thrust into the face of a jockey who has only just pulled up his horse and not yet had time to provide any debrief to the owner who is paying the bills? Indeed, the normal broadcaster behaviour is either to ignore the owner completely, or just push them away in the scramble to interview the trainer and jockey. I believe there should be a step change in behaviour in this area, with owners receiving much higher profile and proper recognition of their contribution to the sport.

I’m not arguing for that from an egomaniacal perspective – although on the one or two occasions I have been interviewed, I have enjoyed it – but I think it would really help the racing industry’s cause for both the racing fan and the broader public to understand the centrality of the owner as the number one stakeholder in the sport. Every year, owners are spending £0.5bn on their horses and almost £0.75bn if breeding and bloodstock are taken into account. Very few people understand that. Equally, I’m confident that there are many human interest stories and personalities across the owner community that should be nurtured as a way of bringing more excitement and variety into the rather formulaic TV broadcasts.

So, Racing UK – with your excellent interviewing and commentary team, could you please build more owner coverage into your programmes? Mention them more frequently in connection with their horses; include more background interviews with owners when you visit yards; seek out the human interest stories that bring the highs, lows, excitements and disappointments of owning to life; build a recorded bank of case studies relevant to the key races and weave them into your programming. Hopefully this will also engender more enthusiasm for new owners to enter the sport, and you can also illustrate innovation in horse partnership …. maybe by covering how Owners for Owners operates?!?

I am always interested to hear your views so please do leave a comment. If you can't see the comment box at the bottom of this post then navigate to the post using the right hand navigation or click here > and scroll to the bottom of the page. Look forward to hearing your views. Thanks very much for sharing them.