Tue | Oct 17, 2017

Gordon Robinson galloping above his handicap

Published:Sunday | May 10, 2015 | 12:00 AM
Williams
Jockey Omar Walker, aboard PUDDY POOH (forefront), holds off a challenge from MOM’S STUDENT, with Richard Mairs aboard, to win by a neck in the Divisional (1) Sunnyside Stakes Trophy race at Caymanas Park on December 20, 2014.
Robinson
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In fashioning a response to the March 31, 2015 column titled 'Racing's saviour: handicaps? Or Gully Bop?', I have been left with no option but to reveal the extent of author Gordon Robinson's misinterpretation, through a lack of understanding of the commercial operations of the promotion of horse racing as well as the purpose and methodology of the handicapping of races presented for the purpose of public wagering.

In citing the Trinidad & Tobago (T&T) racing set-up, there has never been a claim by Ainsley Walters and Cliff Williams, impolitely referred to in the column as the "bellyaching Power Pair", that Chris Armond was forced to bring back handicap racing.

Mr Armond is the CEO of Arima Race Club, and unless there is an unusual chain-of-command structure, his job is to implement decisions taken at the level of a board of directors or some higher authority.

With reference to the Arima racecard of January 31, 2015, and Mr Robinson's submission that there were "five optional claimers, two maiden races and two handicaps", I wish to advise readers there were, in fact, seven handicap races.

Mr Robinson betrayed a lack of understanding of a handicap system where weights are allotted based on current ratings, but trainers or owners having the option to declare with a claiming tag in exchange for a pull at the scales or to simply offer their horses for sale.

In addition, Mr Robinson, in his haste to discredit the "Power Pair", quotes from an article by Andre Baptiste in the Trinidad Guardian of March 4, 2015 advising readers of delays in the payment of purses at Arima.

This is the same Andre Baptiste who claimed, after "careful research", he came to the conclusion that horses from T&T were not eligible to compete in Jamaica's Futurity programme.

The T&T horses are, indeed, eligible, so I would investigate Mr Baptiste's reporting of any issue before quoting him.

The sustained incremental improvement so far in sales turnover is more directly attributable to the increase in the points of sale with 14 Post To Post betting shops now equipped with CTL machines since January.

However, Mr Robinson obviously thinks the appearance of Gully Bop, or some other popular artiste at Caymanas Park each raceday, will be a major part of the solution of the financial problems facing the promoting company, although off-track betting shops return 70-75% of sales.

 

Clarity on handicaps

 

Elsewhere in the column, his reference to corrupt handicapping is a further betrayal of a lack of understanding of handicapping, its purpose and methodology. Mr Robinson, and many others, think handicapping is done after nominations. A handicapping exercise is undertaken at the time of a horse's last race and the rating remains unchanged and is then applied to its next race.

The checks and balances imposed on a handicapper by the methodology ensure corruption is difficult to enact and it would then require collusion from all the owners and trainers concerned.

A race handicapped corruptly or inaccurately would affect all starters, positively or negatively, and therefore subject to appeal. Frankly, I am surprised Mr Robinson, an owner and breeder of such long standing, was not aware of any of this.

I now turn to Mr Robinson's five-point "financial fundamentals critical to profitability", and he puts divestment as the top. I wonder very seriously if Mr Robinson is fully aware of the current status of the industry as it relates to the decline of the crucial ownership base, horse population for racing, and the real prospects of the promoting company achieving profitability at current sales turnover.

Total wagering on horse racing in the island, simulcast included, was around J$7.3 billion, with CTL turnover at $4.2 billion, and the bookmakers $3.1 billion in 2013. Both CTL and the licensed bookmakers returned approximately between averages of 66% and 68% to punters as winnings. In addition to operating expenses, the bookmakers pay levies and gross profit tax, but seem able to remain viable as they return a gross profit of 32%-34% and can offer credit as well.

CTL, however, is in a totally different position with a 20-23% of sales allotted to the payment of purses added to 66-68% guaranteed payout. Their OTB operators earn commission at a rate of 5.0% of gross local racing sales and 7.5% of simulcast sales leaving the company with only 5.0-7.5% of gross sales as well as rights fees from bookmakers as its revenue stream.

There is a levy payable at the rate of 1.0% of sales, and CTL is also liable for gross profit tax. The operation of the racetrack is the responsibility of the Ministry of Finance and has for too long deemed by the Government to be eligible for the payment of levies and taxes as a commercial operation.

As I understand it, historical non-payment of levies and taxes has now exceeded $650 million. The company simply cannot, and will never be able to, afford to pay. The foregoing does not represent a likely adequacy of profit to induce potential investors in divestment to respond positively to the pending request for proposal.

At this point, I am not sure if the property and fixed assets are up for divestment or just the commercial franchise with Government retaining ownership of the 200-hectare plant.

 

More Gov't support

 

Given the unique nature of the business, with around 5,000 persons enjoying direct employment, free-zone status is an option that must be given serious consideration along with a permanent tax moratorium.

Mr Robinson's wish for the reduction of the takeout is based on the foolish American notion of the churn effect, with less takeout meaning more sales. With the exotics, 50% of wagering is realised through this means and the majority of payouts is generally won by a small minority who cannot be expected to expend all their winnings.

The punters, collectively, have a finite total sum to expend. Attractive betting odds produced by handicapping is the best way to encourage more wagering. This finite sum now stands at under $4.0 million per live local race but can be improved.

Restructuring of purse distribution and breeders' incentives will only be possible with real economic viability. With respect to technology-driven betting options, a start has already been made by CTL. Of this, I am sure Mr Robinson is aware, and anything else is a pipe dream.

Reference to problems faced in Italy, France, Great Britain and anywhere else has to be irrelevant, since the authorities in these fully professional jurisdictions can be relied upon to solve problems. Support from the oil-rich barons of the Middle East is ample proof of confidence in the quality and integrity of the racing product in these jurisdictions.

In his presentation, Mr Robinson failed to address the argument. Which is, the claiming system produces an unprofitable racing product and has always been a threat to having a financially capable ownership base. Also he did not state whether or not the racing product utilising a handicap system in these overseas operations lacks the desired quality and integrity.

Readers can now make a determination about who is less "uninformed", the "bellyaching Power Pair" or columnist Gordon Robinson.

- Cliff Williams has covered horse racing for more than two decades. Email feedback to columns@gleanerjm.com.