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Issues Hinder International Simulcast Growth

Can widespread international simulcasts become a reality in the racing industry?

Widespread international simulcasts may be a goal of the United States horse racing industry, but it could be a pipedream unless numerous obstacles are overcome and there is a mindset change.

A view of the global landscape was offered the week of Sept. 20 during the International Simulcast Conference in Clearwater, Fla. Opportunity is one thing; seizing it is another, officials said.

John Stuart of Phumelela Gold International, a South Africa-based company, was blunt in his assessment. He suggested the racing industry needs fundamental change in order for the sport and wagering to grow internationally.

“The issues have been discussed many times, but racing continues to look inwardly,” Stuart said. “If you look at poker, the rules are the same for all the customers. We don’t make it easy on the customer.

“If we want to grow this business, we have to grow big (betting) pools. We can’t do that if we’re going to be precious about our own rules.”

Stuart noted that Japan continues to have large pools, handling about 80 billion Euros a year, but in the past 10 years, pari-mutuel handle has declined 25% in the country. Japan isn’t alone.

“It’s kind of a consistent story wherever you go,” Stuart said. “(If there isn’t growth in handle), we could end up with two-bit racing and virtual racing. The competition is smart, and it is giving the customer what the customer wants. Racing is still giving the customer what racing wants.”

Obstacles to international simulcasts include incompatible technology, varying pari-mutuel takeout rates, different past-performance data, satellite transmission issues, tote incompatibility, separate instead of common betting pools, and unwillingness by some countries to open their markets to foreign product, officials said.

Alex Dadoyan, assistant vice president at Meadowlands in New Jersey, said the European market has been good for the track’s Hambletonian trotting program each year and there is potential for more growth as more pools are commingled. He said daily international simulcasts could be a stretch, however.

“I think it works on big days, but the jury is out on regular days,” Dadoyan said.

Stuart said he believes an oversupply of product wouldn’t be an issue given the number of horseplayers around the world.

“We need to get the product and data out there,” Stuart said. “Customers are sitting in betting shops looking for something. They’re actually sleeping between races because there is nothing to do. Import something customers will get involved with quickly, and consistently put that product up.”

Terry Spargo of the Emirates Racing Authority said things are different in Dubai, where betting isn’t permitted on horse races. Still, the Dubai World Cup and Dubai Racing Carnival programs are exported, and handle continues to grow in other countries, including the U.S.

“It’s a much different atmosphere,” Spargo said. “We use racing as an advertorial for Dubai, so it’s a quality product.”

Ramon Rionda Jean, director of racing operations for Codere America, a Latin America-based gambling enterprise, noted takeout differences in several countries in which the company operates. Rionda Jean said in Mexico, the rate is 28%; in Panama, 35%; and in Uruguay, 28%.

There are 30% takeout rates on some exotic wagers in the U.S., but for the most part, blended takeout is 20%.

Rionda Jean also noted that even in Latin American countries, data varies from country to country, or even track to track. Such a scenario would hinder international simulcasts.

“In the end you need to have one format (for data),” Rionda Jean said.

Chris Scherf, executive vice president of the Thoroughbred Racing Associations, cited another issue: a desire to export product, not necessarily import it. He said reciprocity was a key element in the development of full-card simulcasts in the 1980s and 1990s, but now there is a much greater desire to sell than buy.