1. The Challenges of Change:
Unfreezing the Old Model and
Innovating the Future for Horse
Racing
F. Douglas Reed
Principal: Racing, Gaming & Entertainment LLC
dougreed27@gmail.com
&
Director Emeritus: University of Arizona Race Track Industry Program
3. Challenges
Horse/owner supply
to races run ratio -
shortage
Earlier session
discussed some
unique to Canada
Popularity vs.
competition
Fragmented
Difficult to make
change
Animal issues
4. What is working
International expansion
Niche meets
Keeneland 2016 attendance up 4.7%, on-track handle up
11.35%, total daily handle up 4.4%
Big Events
Horse clubs/fractional ownership (WA, IL, KY, MN)
5. What is working
One bet – bargain priced (takeout)
Historical racing machines (AR, KY, WY)
Shared/Team group bets – fractional
ownership of large multi-leg bets with social
aspects and prizes (Finland, Sweden & Norway)
6. What is in the works
Lower takeout – KY Downs, Canterbury
Exchange wagering, P-2-P – NJ
Account wagering instantly – OK, IL, TX, NJ…
Mobile device wagering
7. Ideas
North American
thoroughbreds run
6.18 times a year –
what if it was 7.18?
Experimental Rule
Pari-mutuel has
changed – help your
locals to cash more
45 Ideas in 45
Minutes ( www.ua-rtip.org )
Segmented
Handicapping
Contests
Millennials
ESports Event
Host a hackathon
Innovators’ Circle
8. What is Innovators’ Circle?
Have you heard of:
“Shark Tank” (USA),
“Dragon’s Den” (BBC),
“Money Tigers” (Japan), or
“TechCrunch Battlefield?”
9. The Contest, Event & Finals
The Event/Contest was not a University
event
However, the finals were held in
conjunction with the annual Global
Symposium on Racing & Gaming hosted
by the University of Arizona Race Track
Industry Program, Tucson AZ, USA
We partnered - Hai Ng, Vin Narayanan &
I produced the event
10. First Year Challenges
• First time everything had to be
constructed from scratch
• Website (www.innovateracing.com)
• Funding
• Rules, procedures …
• And much more….
• Legal challenges
• Late start – Contest Was Open For
Submissions only 45 days
14. Invited Finalists
Equine Master (no
show)
Thoroughbred Stock
Exchange
Standing Equine 3D
CT Scanner
Swopstakes
20 For A Million
15. What Other Type of Ideas Were Submitted?
Equine related
Safety related
Ownership
Equine industry business
Fantasy sport like ideas
Wagers
Handicapping, contests, education,
technologies
Marketing, promotions, facilities
19. Closing Thoughts
Finalists success stories
There is not a “silver bullet” cure-all for
racing
Racing like other businesses must
innovate/change
It takes a lot of hard work, a lot of efforts,
some will fail, some will succeed – there
are good ideas out there
Intl simulcasting – Yonkers common pool in France w/ PMU, internet enables video and wagering, growing market
Niche meets: Del Mar, Keeneland, Saratoga
Big events – they are showing increases – experiences sell (this can’t be repeated 365 days/year)
Horse clubs and/or fractional ownership – Emerald, Hawthorne, Canterbury, now others following Churchill, Arlington – quasi or real ownership, gives them real owner experience, educates, some become more involved, or at least more engaged fans
One bet bargain - priced - Balmoral & lots US tracks, western fair, weg – used as a promotion of sorts to create interest in the overall product,
Historical racing machines – legal in some jurisdictions not in others
In the Scandinavian countries they have had success with group or team betting – in essence fractional ownership of a pick 6 or other type of large bet. Some offer competition among teams with prizes etc.
Takeout – the price of the product often thought to be too high. KY Downs has a reduced take but also a NICHE meet while Canterbury has just started their season with significant price reductions. To meet the demand of certain customers
Exchange wagering started in late April in NJ – early results good considering the technical and regulatory challenges currently making it a limited success – location services are stopping or slowing many.
Account wagering – wireless wagering and mobile betting – Sportech (and others) in OK IL,TX NJ – even allow instant anonymous accounts at track or OTB – use phone all day to wager
Hackathon – collective computer programming, making some hardware and software etc better or easier to use
The first three listed on this slide, are reality TV shows where contestants pitch investors for funding for their idea.
The last, TechCrunch Battlefield, perhaps the largest pitch contest in the world, is what Innovators’ Circle was modelled after with a specific twist of ideas and innovation for horse racing.
The Contest was not a University event
The finals were held at the Global Symposium on Racing & Gaming hosted by the University of Arizona Race Track Industry Program, in December.
Partners - Hai Ng (Hai “Ung”), Vin Narayanan (nar ryan) & I produced the event
It was conceptualized in the Spring 2014, Approved December 8, 2014, Legal agreements signed July 2015, announced publicly August 4, 2015, September 8, 2015 the entry box opened and the first submission was made. The Contest was open for only 45 days due to delays.
We started with nothing and everything for the event had to be done.
I budgeted 5 months for the University lawyers for contracts with the producers. I was wrong, it took 7 months and thus the reason we had a late start.
We had a total of 89 submissions. 50 were qualified as complete applications and evaluated by judges. Half of those got some votes by the judges who were asked to rank their top ten. 5 finalist were invited of which 4 of those made the trip to Tucson to compete for $15,000. In addition 5 Honorable mentions were invited to display their idea.
The map shows where the submissions came from. We got entries from 5 continents.
Finalist were guaranteed $1,000 if they participated and a grand prize of $15,000 US, would be awarded at the show. An additional prize for the audience vote for their favorite, was $1,000
In addition, Finalist were permitted to have a table display in the Symposium Exhibit area and registration free of charge for the Symposium. The Finalist competed on stage during a session at the Symposium in front of three judges.
There were a number of quality entries so the producers decided to offer some of the “honorable mentions” an opportunity. They were permitted to display a poster of their idea for one day during the conference and given complimentary registration for the Symposium.
Equine Master opted not to attend and therefore not eligible for any prizes. Theirs's was a analytical predictive model to identify “at-risk” horses.
Thoroughbred Stock Exchange is a new syndication like model with shares at reasonable costs and the shares could be sold/traded.
Standing Equine 3D CT scanner allowed for 3d imagery taken while the horse was standing.
Swopstakes had an 89 page submission. It is a mobile app based, multi-race wager with a social aspect secondary market created, a survivor component where live tickets as the races progressed can be re-sold.
20 for a Million was a free to play online contest to pick twenty winners for a million dollar prize.
To try to summarize many of the other entries I created these 5 categories. I can elaborate more on these if there are questions after this.
A number of entries pertained to the safety/welfare of the race participants. Such as training methods, a racing surface evaluation tool, and equine performance measuring systems.
Other equine related ideas dealt with pedigree analysis, accounting and processing app for horsemen, and an app for improving communication between owners, trainers and racing office personnel.
The category Fantasy sports like ideas, included ideas similar to what is out there and others that included more interactivity, social aspects, contests, virtual ownership, P2P wagers and educational aspects
There were creative wagers or wagering like contests. Some focused on lottery like wagers, some were promotional in nature, and others were apps or variations on existing wagers.
There were a reasonable number of apps, websites, services and ideas that are attempts to solve the problem of providing better education on handicapping, or more useful information, new data platforms or new types of handicapping contest both local and international in scope and also for both beginners and experts. There were others that offered pricing predictive models for pari-mutuel wagering pools.
The last group included promotions, branding and facility changes. Some included a different experience for an off track wagering site or on-track. Others were corporate horse ownership as a means to advertise, a national horse racing incentive club, and virtual ownership contests with cash prizes and real horse owner experience.
The winner was Swopstakes - My thoughts on why they won? Swopstakes did an excellent job in their submission thoroughly and clearly explaining the concept.
I also think a number of entries never made it to the finals due to lack of clarity in submissions.
Why do I mention this? Because I think somewhat by luck our contest may have made some changes that made it better compared to other similar events that we copied.
We allowed the sponsors/judges access to the submissions in a pre-judging to decide finalist and did not have a two tier judging, it allowed for better analysis of the entries rather than just a superficial judging of the “pitch” that is done in 10 minutes with brief questions and answers to follow.
This made it fairer so a skilled “pitch” artist could not oversell an idea that had little substance and entries would be judged on the merit of, or feasibility of the idea. I believe had we not done that, different results may have resulted based on the skill of the pitch alone.
The 2016 event we believe will grow. 2015 we started with nothing but the idea. We got behind schedule as mentioned, and the advertising and the entry period was short. We also only advertised in horse racing publications and media.
This year given the fact that things like rules, website, and other logistics are in place and a longer timeline for submissions ( months vs 6 weeks) we will be able to broadcast for a wider audience going outside racing.
Our website has last year’s results and soon entries will open for this year’s contest!
I have a short video to show you some aspects of the event and I will follow that with 30 seconds of closing thoughts
I offer some closing thoughts for horse racing in general:
Finalists success stories
Winner Swopstakes has gained traction in Australia and been talking potential deals with a number of racing entities
TB Stock Exchange has grown their model and had very significant expansion
20 For a Million is rolling out a smaller version at several tracks this summer
There is not one “silver bullet” cure-all for racing
Racing like other businesses must innovate/change
It takes a lot of hard work, a lot of efforts, some ideas will fail, some will succeed
There is a silver lining: look at what is working and what is not and know there are many people out there with passion and ideas
