Jimmie says …  Horsemen can’t have their cake and eat it

A quick glance at 2018 Ministry Paper 89, titled Caymanas Track Limited Annual Report for the year ended March 31, 2017, shows the state of affairs at the government-run horse racing-promoting company on its deathbed as at March 6, the eve of divestment.

Quoting directly from the document, “CTL recorded an operating deficit of $120.65 million, reflecting a deterioration of $73.22 million on the deficit of $47.43 million for 2015-16.” The document went on to detail CTL’s state of insolvency, “a net shareholders’ deficit of $669.97 million”, holding a cash balance of $20.58 million at the end of the period.

It was this sad state of affairs that led then finance minister Audley Shaw to have introduced Paul Hoo, chairman, Supreme Ventures Limited, as “the bravest man in the room” when divestment was announced to the press at ATL Automotives’ showroom, Oxford Road.

What happened after that fateful evening was more of the same. Supreme Ventures Racing and Entertainment Limited (SVREL), the SVL subsidiary to which the track was divested, as signed by then minister of finance, Nigel Clarke, immediately threw a $100 million purse increase at a voracious swine, which had perennially gobbled similar increases in addition to bookmakers’ rights fees.

As any swine would, the $100 million purse increase disappeared from the trough as quickly as it had been tossed. SVREL racked losses of $607.7 million in 22 months – $355.6 million over 10 months in 2017 and $252.1 million for all of 2018.

Since 2017, SVREL and horsemen have been at loggerheads, some calling for purses to be a percentage of net sales, a concept that, Clarke, when intervening in a May 2024 impasse, made it clear, in no uncertain terms, was untenable as a business model.

It has been two years since Clarke directed racing interests to return with a working model, which would benefit all. During the interim, the Thoroughbred Owners and Breeders Association of Jamaica, working in concert with the late Don Wehby as mediator, pursued varying models of tying purse money to owners’ expenditure, which, truth be told, would mean that owning a horse is a business venture, which is far from reality.

Owning a racehorse historically started as a leisure activity undertaken by persons with the disposable income to do so. Owners raced horses with hopes of winning prize money advertised by the promoter.

However, modern horse racing, having attracted owners of less means, through their own volition, has led to an evolution in thinking that purse money should be able to compensate owners. 

Commercial breeding is a business in which stud farms sell horses to owners or provide accommodations, stallion services, as well as keep and care for resident mares.

At the racetrack, trainers enter contractual agreements to train horses on behalf of owners, employing the services of jockeys, exercise riders, grooms, and farriers.

Whereas government-owned CTL could throw pearls from the public purse, SVREL, which last reported an accumulated loss of $400 million trying to pursue an unsustainable revenue model, certainly cannot do so.

It happens nowhere else in the world. Horse racing is the most subsidised sport in North America, largely propped up by hundreds of millions of dollars in tax breaks, state subsidies, and legislative deals with the casino industry.

This is done to sustain employment of thousands and the various ecosystems of horse racing, not to enrich racetrack owners or operators.

Locally, SVREL recently made a proposal for outright purchase of Caymanas Park, citing a US$100 million development plan from which purses would be subsidised. Instead of giving a listening ear, at least agreeing on a hybrid of what exists elsewhere such as Florida, where casino licences are tied to racetracks in what is known as a ‘combine’, the horsemen have flatly rejected the proposal.

However, North America is constantly foisted as being successful when purse levels are compared to that of Jamaica. How does one have one’s cake and eat it at the same time?