The article below is from Howard Hamilton, president of the Thoroughbred Owners and Breeders Association and is a response to an earlier publication on this website by attorney-at-law, Jeffrey Mordecai. Hamilton, like Mordecai is a breeder and owner of horses.
I read with interest the article written by respected attorney, owner and breeder, Jeffery Mordechai published in the racing supplement of the Jamaica Observer dated Friday, September 29, 2023.
I am disappointed that someone so eminently qualified in racing knowledge should have written an article so flawed in facts and understanding of the global and local problems associated with racing.
He comments on “ a leader of the shareholders made the following contribution- if you can’t have the money to pay the purse increase we are asking for, go to the GOVERNMENT” he even mentioned extra taxation. He seemed to have found this suggestion repulsive.
I will therefore respectfully point out to Mr Mordecai that in the 1960s bookmakers controlled some 80 per cent of the sales revenue generated by the stakeholders of racing and the government intervened by establishing The Betting Gaming and Lotteries Commission and imposed a Betting Levy which is still in place to this day.
This levy currently funds inter alia, the foal subsidy programme, the revolving loan fund to assist owners in purchasing horses and a recently introduced stimulus package to assist in the importation of horses. Also the support of the annual yearling sale with sponsorship providing one million dollars to owners of horses winning special two-year-old races. All administered by the Thoroughbred Owners and Breeders Association (TOBA).
Globally it is recognised that the racing industry does not generate enough surpluses to support the increase cost of preparing horses for programmes hence promoters have to find means to alleviate this problem.
In England a betting levy scheme supports the industry. In Hong Kong the Jockey Club operates a national lottery scheme which provides necessary funding.
In Canada the government imposes a tax on the casino operations to assist racing.
In the USA, the various states legislate special taxes on casino operation for assisting racing. In all cases it is the government that intervenes with assistance.
He referred to a “2022 agreement which was a start by negotiating for the first time a scheme with a formula linking sales to purses.” I am relating this to a memorandum of understanding negotiated by the United Trainers Association and the now defunct Jamaica Racers and Owner’s Association.
My understanding is that he was a part of the negotiating team, they arrived at a formula which was based on purses yielding 49 per cent of gross gaming revenue. Had the team done their homework they would have realised that this formula was grossly inadequate and were this applied to previous years would have yielded.
2017…..$397 mil against a payment of $ 565 mil
2018…..$528 mil against a payment of $710 mil
2019…..$580 mil against a payment of $ 726 mil
2020…..$484 mil against a payment of $507 mil
In fact when the formula was applied to 2022, it only yielded an adjustment of $13 million when stakeholders were requesting an adjustment in the region of $250 million.
It is incorrect for Mr Mordechai to infer that there was no formula existing, since record shows that Supreme Ventures Limited (SVL) should have been guided by the formula which existed with Caymanas Track Limited at the time of the takeover. This was 23 per cent of total sales and the breakdown was quoted daily in the Track & Pools publication. They ceased publishing this information in March 2021.
Purse payments remain a contentious issue and I again refer to statements made by SVL at the time of the development plan. I quote, “They agreed to increase purses immediately by 20 per cent above the amount shown in the audited financials of March 2015 as disclosed in the virtual data room.” This was done in March 2017.
They stated in their development plan, “considering that all industry stakeholders benefit when purses are increased, it is our intention to prioritise this aspect to incentivise stakeholders to be engaged in the long term development of the industry. Increased purses will provide financial resources for owners breeders trainers and jockeys to invest in their assets to producing a quality local horse racing product providing additional horses, horses of improved stock, better trained horses, better trained jockeys, more quality races among other other imperatives as the largest single sponsor of racing, we are committed to providing resources to this crucial aspect as we aggressively pursue the engagement and re-engagement of other sponsors.”
Meaningful purse payments are the life blood of the racing industry. The current cost for preparing horses, is some 2.6 billion dollars and these cost increase daily with the devaluation of the Jamaican dollar.
We are asking that promoters appreciate this and find a way to refund at least 50 per cent of these cost. The formula which was inherited from Caymanas Track Limited addressed this problem by providing 23 per cent of total sales. All we now ask is that negotiations be initiated with the promoting company based on the realisation of these ever increasing expenses.
We take this opportunity to invite Mr Mordecai to become a part of the solution of our problems and to become an active member of The Thoroughbred Owners and Breeders Association of Jamaica, which association remains at the forefront in the representation of all stakeholders.