Features

March 17, 2014

East Leading West – Part 2, Racing

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I thought it was time to bring an international flavour to my musings. A man that loves horse racing. A golfing tragic with the game to match. It’s December and I’m not sure there’s a better place in the world to be than Hong Kong and Shenzhen, China. I was on a mission to experience a selection of the world-renowned sporting joys that this sliver of the world delivers, and to pinch a few practices that would be handy in Australia.

Part 1 was about the golf. Have a read if you are so inclined. The second part of my story is about the racing.

The itinerary

A sporting extravaganza in brief.

Six days in early December. Two horse race meetings (the International Jockey’s Championships at Happy Valley and the Hong Kong International Races at Sha Tin). Two rounds of golf at Mission Hills on the Vijay and the Faldo courses.

All interspersed with a junk ride on Hong Kong Harbour, the semi-finals of the Hong Kong Squash Open, and a tour of Queen Elizabeth Stadium.

Racing at Happy Valley and Sha Tin

Racing has been taking place in Hong Kong since 1841. One of the premium racing weeks in Hong Kong is the Hong Kong International Races at Sha Tin on the second Sunday in December, supported beforehand by the International Jockey’s Championships at Happy Valley (on the Wednesday night). The International Races are recognised as the ‘Turf World Championships’ and offer prize money of HK$72 million (over AUD$10 million).

What a great two sessions at the track. Under the lights at Happy Valley was spectacular. Sha Tin was a premium event, with some of the world’s best thoroughbreds, a position on the winning post and service that isn’t matched in Australia. Pity I lost. Water off an unlucky duck’s back. Both experiences were sensational from the point of view of the on-course consumer and punter.

Sha Tin racecourse in Hong Kong. Image: zimbio.com

Sha Tin racecourse in Hong Kong. Image: zimbio.com

The status quo isn’t great

Whilst there are numerous challenges for horse racing in this country (particularly the chicken and the egg – ensuring the racing product is of the appropriate quality and depth to ensure wagering levels are increasing to keep up with rising costs – this requires solid prize money – which is driven by increases in wagering turnover from the racing product), the on-course attendee experience needs specific attention.

Take out the incredible drawing power of Black Caviar, and on-course attendances at most meetings are falling. Australia’s premier racing ‘festival’ is Victoria’s Spring Carnival (nothing else presently comes close, but here’s hoping Sydney’s revamped Autumn Carnival, The Championships, is a success). However even it for the last couple of years has begun to feel a bit tired. Considering the four-day Flemington Carnival (the ‘jewel’ of the wider Spring Carnival), according to the Victoria Racing Club’s figures, in 2006, 418,069 patrons attended. In 2013, this had fallen to 331,196 – over 20%. Now, it should be stated that the VRC capped the attendance at 110,000 for the first two days of the Carnival – yet the mark was not reached on either Derby Day (95,000) or Cup Day (105,000). Not a good sign given statistics indicate racing regressed to a ‘feature-day’ or ‘carnival’ event for spectators long ago.

Ensuring people keep attending race meetings is critical for the foundations of racing. Without the spectators, in my opinion, racing is no longer a sport. It is simply a wagering product. The competition for the wagering dollar is intense. Sports wagering is exploding. From the 2012/13 Australian Racing Fact Book, in 2012/13 wagering on thoroughbred racing was $14,461M compared to sports wagering of $3,991M. Whilst comparatively larger, the growth profile tells the actual story. In the five years to 2012/13 thoroughbred racing wagering grew by 0.2%. In the same period, sports wagering grew by 55%. It is acknowledged that the growth of sports wagering is off a lower base, yet the difference is striking.

My contention is that the racing industry needs people to love racing itself in addition to loving betting on it). Sport, only recently subject of betting (officially in Australia since the 1990s) has this natural advantage. For racing, the on-course experience, and that of horse ownership, is a means of generating this ‘love’, and therefore potentially future proofing the sector.

Like members of golf clubs, the members of our racing clubs can be the biggest hindrance to progress. The Melbourne Racing Club (MRC), considered a progressive racing club, staged a twilight meeting (of sorts) on 25 January 2014 at Caulfield. The last race wasn’t staged until 6.40pm (when normally the meeting would be complete by around 5.00pm to 5.30pm). Something a little bit different. As I understand it there were some complaints from members. Now I would suggest the MRC is seeking new audiences, both on-course, and for off-course wagering with such an initiative.  It is summer after all and in Victoria we enjoy day light savings. Whilst there wasn’t coordination of race times with other jurisdictions on the day in Australia (the racing industry’s greatest challenge that it rarely conquers) why shouldn’t the MRC challenge the existing, well-worn paradigm?

I understand that the race-day in Australia is the domain of the clubs. It is their opportunity to leverage their assets. However certain policies and behaviours may not be for the greater, long-term good of the sector. Regardless, most clubs would agree their biggest challenge is getting people to the track so maybe new ideas are required.

My Hong Kong experience highlighted this.

What can our racing industry learn from the East?

Understanding the obvious resistance to some of these, I’ve no doubt they all would have a positive impact of the racing industry as a whole, especially its status as a spectator-driven series of sporting events. Hong Kong is leading the way in so many respects.

Races should be closer together

In Hong Kong, the races are 30 minutes apart. How many times does it have to be said? Our society is time poor. Having an eight or nine race card run for anywhere up to five or six hours is a sure way to ensure patrons walk away bemused or early. Now I understand we have a very busy racing schedule on a Saturday in Australia, with race meetings all over the country. Regardless, at some point some priority has to be given to the patron attending the meetings (after participant welfare). Any more than 30 minutes between races results in dead time. The industry has experimented with shorter breaks. It needs to work towards a solution to make the changes permanent.

Affordability

Going to the metropolitan races in Victoria and New South Wales is an expensive activity. Food and beverage costs are beyond reasonable in many instances (at times, the term ‘gouging’ comes to mind). And the industry expects the patron to spend over five hours on-course with the race scheduling. In Hong Kong, food and beverage options were not only plentiful, they were cheap. Now I’m not saying that our racing clubs have to give away free lunches and beers but means to limit the cost to patrons must be considered. The short term pain of initial reductions in food and beverage revenue could very well be offset by increased attendances and increased volumes. The long-term payoff will be a stronger racing industry because of the loyalty generated by repeat attendance.

Further, there needs to be a revision on entry prices. I’d suggest they are exorbitant for our premium meetings. There shouldn’t be one person not attending because of the cost. Let’s get them in and then get them back. Once again, the revenue hits can be offset by increased spending on food and beverage (if reasonably priced) and on wagering. I acknowledge the challenge is membership pricing, attraction and retention. Again, whilst a key factor, this shouldn’t stop lateral thinking to arrest the decline in race day attendances.

In Hong Kong it cost around AUD$1 to get into the Wednesday night meeting. An international visitor ticket into the Hong Kong Jockey Club members cost around AUD$30 for the premium Sunday meeting. I dare say the public entry price was substantially less. Compare that to most of our metropolitan meetings, let alone those considered premium.

Relax!

It’s time to ease the dress codes of our metropolitan racing clubs. These can be unnecessarily stuffy places. In Hong Kong it was open slather (one gent impressed me in his black, yellow and red tracksuit with white tennis shoes). Whilst I’m not suggesting it goes that far, I’ve no doubt it is time for our racing clubs to fall into line with community standards and expectations. I’m a member of the Victoria Racing Club and the Moonee Valley Racing Club. The latter has a relaxed dress code for its night meetings. I’ve no idea why it isn’t relaxed all year round at all metropolitan racing clubs. In the last few months there has been significant negative press about sporting clubs and their enforcing of archaic dress standards. Community attitudes have changed.

Things are beginning to move in the right direction though. The MRC and Racing Victoria have combined together to introduce the ‘Relaxed Racing’ initiative for February’s premium meetings at Caulfield. Whilst the policy has a number of elements, the crux of it is a relaxation of the Members’ dress code for certain race meetings in certain areas of the Members’ Reserve. I actually attended on the first day of the initiative on 8 February 2014, and without doubt the high temperatures (and necessary early start to the meeting) meant that the dress code didn’t feel out of place. I didn’t see any rioting or people stealing pictures off the walls.  I hope this is the first step of entrenched change.

Treat the punter and the owner like royalty

The punter must always come first in racing. That is a given. The fact is that wagering funds the racing industry. This won’t ever change. In my opinion, the punter that attends the track will yield a longer legacy for the racing industry that the person that gambles off-course. It follows, treat the on-course punter like royalty. Give people a reason to get out of the betting shops and the comfort of their lounge rooms. In Hong Kong, detailed (and colourful) form was either free or inexpensive. TVs were plentiful, as were replays. Commentary could be easily heard. It is time for our industry to treat the on-course punter better. I understand falling attendances make this investment difficult but we are at a cross roads. It can’t be argued that having people on track is not for the betterment of racing. Let’s get them back.

The owner is about one millimetre behind the punter. Without the owners we don’t have racing. Now I’m not sure of the owner entitlements at the Hong Kong Jockey Club. I would guess (and hope) that they are flexible and plentiful. Our race clubs need to provide more tickets to owners. Trust me, watching your own horse race is a thrill. Watching it win is incredible. These emotions needs to be distributed amongst many more. Extra tickets to share the ‘owner’ experience amongst non-owners will encourage repeat patronage. It will also increase the potential pool of equine investors. This is a no-brainer. Whilst space is a constraint, and the Clubs are becoming somewhat more flexible, this should be pursued for all but the most premium of horse races (and even then the clubs should do their best to accommodate demand).

The final word

I haven’t necessarily portrayed Australia’s racing clubs in the best of light. That is not totally fair. Some are more progressive than others. What is certain though is that there isn’t industry wide acceptance of initiatives such as those suggested above.

It should also be acknowledged that it’s not just the members that are roadblocks for change. The many layers of governance in racing also makes it challenging. Peak bodies such as Racing Victoria and Racing NSW and key stakeholders such as the racing clubs are all separately incorporated. They each have their own Boards / Committees and strategies.

These structural impediments mean there are always divisive interests driving behaviours. Whilst the racing clubs have their own strategy, governance and members to answer to, at some point, the industry needs to better align to ensure the sector is sustainable well into the future. If that necessitates rationalisation, so be it. Regardless, the sector needs to move with the times and acknowledge that what worked then, doesn’t work so well now.


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