“Money, Money, Money, it’s a Rich Man’s World” (And, Alas, a Poor Man’s): Moral Dilemmas of FOBTs and Bloodstock Sales

In last month’s blog I had a look at the prices vs. returns of NH horses at the Tattersalls’ Cheltenham Sale in May 2016. The total spend including purchasing the horses and then training them came out at £1,922,300. Yet they only went on to win five races in total, and the measly prize-money of £63,169, at an average per horse of £6,317. That gave a total return on investment (or as I like to refer to it, Return on Ownership) of a staggeringly dismal 3.2%.

This struck a chord with a number of blog readers who sent me similar examples, including Tattersalls’ Book 1, October 2015. I’m sure you can guess the record of the top 10 there as well. Many of you, I know, will shrug your shoulders and say that if rich people want to waste such prodigious amounts of money, that’s up to them. But before I list out those lots, why not just reflect on the moral dilemma that is now facing politicians and in turn British Racing over Fixed Odds Betting Terminals (FOBTs).

The Department for Culture, Media & Sport launched a review 15 months ago in response to widespread concerns about the addictive nature of FOBTs. This culminated in a decision in October 2017 to cut the maximum stake from £100 to somewhere between £2 and £50. The Department then launched a 12-week consultation period which came to an end last month. The review also encompassed wider socially responsible measures to protect the vulnerable. This is definitely a case of a poor person’s world.

The Sunday Times led a scoop front page announcing that the Government was going to cut the FOBT stakes to a maximum of £2. Many of you, I know, will strongly agree with this. However it didn’t take long for the bookmaking industry and British Racing to examine the impact of a £2 maximum stake. Whether the figures are accurate or not I don’t know, but Martin Cruddace, boss of Arena Racing Company, caught the headlines when he forecast that an FOBT limit reduction would lead to 4,000 to 5,000 betting shop closures. Some took a more cautious view that maybe only 3,000 shops would close, but apparently the average shop pays £30,000 for media rights so the loss of income could easily be in excess of £90 million per annum with a view that, in turn, at least £55 million could be axed from prize-money.

Clearly, this is a very sobering story and it cannot be easy to deal with. Racing needs every pound that it can get its hands on, but surely not through the “crack cocaine” of FOBTs. A moral dilemma indeed.

In this context, the lunacy of bloodstock prices at sales such as Tattersalls almost appear like comic relief. Here are the top 10 from October 2015.

Lot 304, Dubawi – Loveisallyouneed. £2,205,000. Hasn’t raced, prize-money zero.

Lot 30, Galileo – A Z Warrior. £1,365,000. Named Key To My Heart. Won twice, prize-money £47,652.

Lot 43, Galileo – Alluring Park. £1,312,500. Named Douglas Macarthur. Won twice, prize-money £122,189.

Lot 255, Galileo – Jacqueline Quest. £1,260,000. Named World War. Won once, prize-money £26,068.

Lot 254, Oasis Dream – Izzy Top. £1,155,000. Named Dreamfield. Won twice, prize-money £12,291.

Lot 293, Galileo – Like A Dame. £1,050,000. Named Longing. Won once, prize-money £9,285.

Lot 71, Dubawi – Badee’a. £945,000. Hasn’t raced, prize-money zero.

Lot 204, Dark Angel – Folga. £866,250. Named Dirayah. Hasn’t won, prize-money £385.

Lot 439, Street Cry – Shastye. £840,000. Named Secret Soul. Hasn’t won, prize-money £,684.

Lot 107, Oasis Dream – Caphene. £787,500. Named Watchman. Hasn’t raced, prize-money zero.

Dear, oh dear. If we add a million or so for training fees and commissions, then the ROI / Return on Ownership is 1.72% on a total prize-money of £219,554. Indeed it must be even worse than the return on FOBTs, which says something.

Just to finish on a sobering note though the gross gambling yield, i.e. the amount kept by the betting shop operators after winnings are paid out, in the year to March 2017 was £1.39 billion from traditional betting ….. and a staggering £1.86 billion from FOBTs. It will be very surprising indeed if the Government doesn’t crack down hard on these machines and in turn, bookmakers ….. and I’m afraid, on racing’s income.

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Beware Expensive NH Horses at Sales – Even If You Want to “Dine at the Top Table

I know, I know …. I must put into practice the New Year’s resolution and get out more; stop being Mr. Grumpy and doing an impersonation of The Curmudgeon; forget the stats and put away my anorak …. But yesterday, when I was watching racing from Warwick, the names of two owners triggered a memory of one of the sales. The horse was Mr. Whipped, who won the Gr.2 Ballymore Leamington Novices’ Hurdle over 2m 5f. The owners were Grech and Parkin. After the race, when interviewed, one of them said, “If you want to dine at the top table, you’ve got to be prepared to spend the money”, which they certainly had done on this fine son of Beneficial, having paid £160,000 for him.

I remember going to the Tattersalls’ Cheltenham Sale on 26th May 2016, where one of the top ten horses from that sale is also now owned by Messrs. Grech and Parkin, so in an idle moment between the end of ITV Racing and supping the first glass of claret, beyond the witching hour of 6pm, I went to check my records.

If you’ve been following the blog over the last few months you’ll already know my views that the Irish point-to-point scene, and the way in which winning horses appear in the top boutique sales, is questionable to say the least. Before m’learned friends sue me for libel, here is the performance of the top ten lots from that sale.

Lot 17, Redhotfillypeppers. Sale price £200k. By Robin Des Champs and trained by Willie Mullins. Had won a 4yo mares’ maiden P2P at Necarne thirteen days prior to the sale. Has won once since and total prize-money is £9,440.

Lot 37, Lough Derg Spirit. Sale price £190k. By Westerner and trained by Nicky Henderson. Owned by Grech and Parkin. Had won a 4yo geldings’ maiden P2P at Athlacca nineteen days prior to the sale. Has won twice since, and total prize-money £33,372.

Lot 28, Secret Investor. Sale price £175k. By Kayf Tara and trained by Paul Nicholls. Had won a 4yo geldings’ maiden P2P at the same meeting as Lough Derg Spirit. Has not won a race since, and total prize-money of £4,694.

Lot 64, Super Follo. Sale price £150k. By Enrique and trained by Noel Meade. Had won a 4yo maiden P2P at Barlemy ten days prior to the sale. Hasn’t raced since.

Lot 47, Drovers Lane. Sale price £135k. By Oscar and trained by Rebecca Curtis. Had won a 4yo geldings’ maiden at Necarne twelve days prior to the sale. Hasn’t raced since.

Lot 52, One More Hero. Sale price £100k. By Milan and trained by Paul Nicholls. Had won a maiden P2P at Dromahane 32 days prior to the sale. Has raced once since, winning £286.

Lot 34, Minella Rebellion. Sale price £90k. By King’s Theatre and trained by Nicky Henderson. Had come 2nd in a 4yo maiden P2P at Dawstown 24 days prior to the sale. Has not won a race since and total prize-money £1,145.

Lot 32, Searching For Gold. Sale price £88k. By Gold Well and trained by Charlie Longsdon. Had won a 4yo maiden P2P at Ballindenisk eighteen days prior to the sale. Has won once since and total prize-money of £2,093.

Lot 45, Westendorf. Sale price £85k. By Coroner and trained by Jonjo O’Neill. Had won a P2P Flat race at Tipperary fourteen days prior to the sale. Has won once since and prize-money £12,139.

Lot 26, Glen Rocco. Sale price £80k. By Shirocco and trained by Nick Gifford. Had won a 5 & 6yo geldings’ maiden P2P at Ballindenisk eighteen days prior to the sale. Hasn’t won a race since and prize money of £954.

Dear oh dear. Apparently great P2P form going into the sales, but equally apparently pretty lamentable performances subsequently. Total hammer spend of £1,293,000 and a cool 10% commission to sales house and agents of £129,300, let’s say £50k each on training fees and associated costs as most of the trainers are not exactly the cheapest is another £500,000, giving total spend of £1,922,300. Between the lot of them, they’ve only won five races since the sale, with total prize-money a measly £63,169 at an average per horse of £6,317. If you then do the maths and work out the return on total investment, it is a staggeringly dismal 3.2%.

Methinks there’s not too much fine dining at the top table for anyone involved with these horses. Without doing a massively time-consuming exercise looking at all the other sales, I think I’ll stand by the assertion that turning up at top sales and spending money like water is the way to the poor-house. Anorak now taken off again. Time for another glass of fine claret. Cheers!

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.