Jockey Club president and chief operating officer James Gagliano speaks at the Jockey Club Round Table.

Jockey Club president and chief operating officer James Gagliano speaks at the Jockey Club Round Table.

The Jockey Club

Jockey Club: Marketing Relies on Integrity

The organization held its annual Round Table conference Aug. 12 in New York.

The Jockey Club intends to continue with its efforts to market Thoroughbred racing and develop new patrons, but the organization's leader said Aug. 12 those efforts must go hand in hand with medication and penalty reforms.

Jockey Club president and chief operating officer James Gagliano, speaking at the Round Table conference in Saratoga Springs, N.Y., cited the organization's investment in television coverage for racing, social media platforms, and fan education programs that resulted from the 2011 report from McKinsey & Company. The Jockey Club also is strongly pushing its Reformed Racing Medication Rules.

"I assure you, those marketing efforts will be seriously and dangerously compromised if we do not reform our medication policies, our drug-testing standards, and our penalty system," Gagliano said.

Jockey Club chairman Ogden Mills Phipps presented information designed to send the message that racing is being greatly damaged by drug violators--even if the number of them is relative small. The data gleaned by McKinsey & Company shows that 98.5% of about 12,800 trainers had no medication violations from 2005-11.

"Is anyone satisfied with that scenario?" Phipps said. "Is anyone satisfied with a situation in which 1.5% of the population is shaping 100% of the perception of our sport? Should we be satisfied with medication rules that arguably protect about 1% of the trainer population--the 1% that repeatedly demonstrate under disregard for the rules?

"Those 12,000 trainers should have no issue with the (Reformed Racing Medication Rules), because they were already adhering to them, as evidenced by their regulatory history."

Michael Lamb, a partner in the McKinsey & Company media and entertainment group, said there has been progress since the company issued its report at the 2011 Round Table: pari-mutuel handle is flat or up slightly after several years of declines; attendance at marquee race meets and events has increased; and television coverage is expanding.

But he said there are signs of "fragility," including a declining foal crop coupled with an increase in racing days, a stagnant advance deposit wagering system that hasn't delivered on developing lots of new users, and a lack of wagering and tote innovation.

"We continue to see growth in the format of ADWs, yet the ADW experience remains targeted toward hardcore fans only and is intimidating for new users," Lamb said. "The industry is still not capitalizing on the sport's monopoly on legal online gaming, and while the window is still open, the next 12 months may see legalization of poker in one or more states, bringing competition for gambling dollars online.

"We said last year that competition from gambling was one of the major factors in the (racing) industry's decline, and unless the industry innovates and acquires new users now, we fear legalization of online gambling will accelerate racing's decline."

Lamb also said purses are up 8%, but the industry generates less than $11 in handle for each dollar in purses. He said developments in Ontario, where the provincial government has ended the slots-at-racetracks program "should remind us this windfall should not be relied on over the long term."

Jason Wilson, vice president of business development for The Jockey Club, outlined programs enacted through the McKinsey & Company study, including refocusing the best of racing on television, recruiting new fans, and developing a strategy to convert casual fans into horseplayers.

"We have developed a multi-media strategy that involves traditional media outlets, television, and new digital media and mobile technologies to provide fans a more contemporary experience, educate them about the richness of the sport, and meet them where they consume sports and entertainment," Wilson said.

In the past week two social media games, "Thoroughbred World" and "Major League Horse Racing," were released. In November there will be fan development programs geared toward the Breeders' Cup World Thoroughbred Championships, which will be held at Santa Anita Park in the Los Angeles market.

Wilson noted a spring video campaign called "Hoof Locker" was panned by some in the industry--not an unusual occurrence. Similar efforts will continue, however.

"Some of the commentary around these videos shows that you really cannot be too caught up in what the critics say--some loved them and others found them not to their taste. However, we believe in trying new things, and we will continue to do so."

Wilson also said the live racing broadcasts leading up the Kentucky Derby Presented by Yum! Brands (gr. I) reached more than two million people through television, the America's Best Racing website, and distribution partners.