Asian Racing Conference not perfect but more than just a talking shop
It's all too easy to dismiss convocations such as the 37th Asian Racing Conference in Seoul as meaningless talk fests. But that view is wrong.
There were several excellent presentations at this week's conference and I can parochially note that two of the most engaging were from Australians - demographer Bernard Salt and academic and lawyer Stacey Steele.
Neither, of course, specialises in horse racing and the outside perspective - which was also offered by a number of other speakers - was definitely valuable and key industry issues were certainly discussed, from both an inside and outside view, to contribute to a potentially fruitful week.
Andrew Harding, Asian Racing Federation secretary general and Hong Kong Jockey Club executive director of racing, proffered his summary of the week's event to ANZ Bloodstock News.
"Even with three days it's impossible to look at every issue but I think we achieved a serious examination of all the major issues both commercial and regulatory and people have left with a wealth of highly useful information," he said.
"The need for us to shape our brand, the hardline approach we need to take on doping, the sheer scale of the illegal betting market and what is needed to tackle it, and the great work that is going into further strengthening welfare outcomes were for me the standout messages."
As is always the case with such events, improvements could be made and we await the follow-up, the action.
With that in mind a "business arising from the last meeting" and associated follow-up would certainly be a welcome addition to open the 38th Asian Racing Conference, which will be held in Cape Town in South Africa in February 2020. There was a view that the industry needs to examine the questions left unanswered by various presentations which I am keen to explore in coming columns.
There was also a general view that most presentations were too long and could have been readily reduced by eliminating unnecessary background briefing which could be simply supplied via fact sheet to the audience.
In many cases, extended presentations eliminated any time for robust panel discussion and there was a lack of rigorous debate on key questions which, these days, could have been instantaneously supplied from the audience via a medium such as Twitter.
While many issues related to industry participants were discussed, there was also a feeling among delegates and all attendees that direct input from stakeholders including trainers, jockeys, owners and breeders - and dare I add - punters would be valuable.
While the host country organises the event, the Asian Racing Federation sets the business programme so there is an overarching capacity to initiate change where appropriate.
The Seoul conference began with Asian Racing Federation chairman and Hong Kong Jockey Club chief executive officer Winfried Engelbrecht-Bresges's call for the racing industry to collectively create a global brand.
That may seem fanciful to some but is a worthwhile aspiration given that, and if for no other reason, that shortly after Engelbrecht-Bresges's opening remarks; the media boss of Manchester United, Phil Lynch, told the assembly that the club had 659 million followers worldwide.
Engelbrecht-Bresges laudably spoke frankly of racing's current status and image. "Racing is not even in the top 20 most popular sports globally and that should be a wake up call for everybody," he said. "Once, racing had great newspaper coverage. It was the biggest game in town and we took it for granted that would continue
"Racing has lost its popularity. It is perceived as a gambling sport. Our brand is dominated by gambling and we have to change that perception. Racing's market share of wagering has dropped which means we have to broaden our customer base.
"The key and fundamental shift is to create a global, master brand focusing on the world class sport and entertainment we offer and creating an emotional attachment to the sport."
Exactly how we implement this brand and whom we target is one of those questions which demands further exploration although Bernard Salt provided possible starting points through his presentation (more below).
Engelbrecht-Bresges did insist that no brand creation was possible without first ensuring racing's house was in order - in three principal areas; integrity, raceday medications and doping, and a commitment to high standards in overall horse welfare.
The first two, of course, are racing constants and may demand a radical rethink in most jurisdictions where, unlike Hong Kong, the horses are not all domiciled in the one place.
Horse welfare was a primary focus of the conference and this is now a vital matter for racing - not to appease animal activists but to be able to assure our friends, children, neighbours or colleagues that our horses are adequately cared for and/or appropriately placed after retirement from racing.
Australia, it should be said, has been at the forefront of this issue as Frances Nelson QC, Chair, Racing Australia, outlined, providing the background to Racing Australia's 2016 reforms, which comprised improved welfare outcomes from early foal registrations to a comprehensive traceability programme.
"Racing must communicate our values and welfare practices to the wider community," Ms Nelson explained. "Racing Australia has been working for some time on furthering welfare issues to do just this."
"Under the new rules, the reason for retirement, as well as plans for the horse beyond its racing career must be supplied upon retirement. Racehorses must be retired at the age of 12 years and this is enforced."
The use of the whip - one of a few elephants in the room this week - was avoided but this is surely another matter for genuine consideration in terms of bettering our brand.
As to disseminating the brand message, Salt - of The Demographics Group - opened his engaging address with a question.
"I have a proposition," Salt challenged. "Asia is the fastest growing wealth-generating region in the world and, now, throughout history. Asia's spending patterns are changing with a focus on leisure and entertainment and the racing industry needs to grab this opportunity with both hands."
The core of Salt's presentation was that rising prosperity, new individual freedoms and corporate success is driving demand for leisure and sporting activities across the emerging and established markets of Asia and beyond.
Salt argued that a new generation of millennials are motivated to showcase their professional success via activities including horse racing and that, at the other end of the spectrum, increased average life expectancy has baby boomers altering their spending patterns.
The most interesting aspect of Salt's presentation was arguably the simple look at changing life expectancy which in Australia has risen from 63 to 82 in the past 80 years and that maybe racing's seemingly myopic push to attract young customers, the 20- and 30-somethings, has been totally wrong.
Salt's figures suggests that targeting the 50- and 60-somethings with financial security and 20 or 30 years to live might be a better approach. And with marriage and parenthood coming later, the focus should probably also embrace the 40-somethings, whose kids are still young enough not to be given a choice as to whether they accompany mum and dad to the races.
Martin Purbrick, director of security and integrity at the Hong Kong Jockey Club, provided an overview of the enormity of illegal betting and its threat to the integrity and financial health of the racing industry.
Purbrick, in his HKJC role since 2009 overseeing a department of 220 people conducting investigations into organised crime and corruption threatening the Jockey Club, chaired the session on anti-illegal betting and money laundering, and pulled no punches when he warned that illegal betting was growing twice as fast as legal betting and that left unchecked illegal betting could "kill" the sport of racing.
"Understanding that risk prompted the formation of the Asian Racing Federation's anti-illegal betting taskforce after the last Asian Racing Conference and we are making progress," said Purbrick. "The involvement of law enforcement agencies is critical and we have established close ties with key bodies in Australia, Hong Kong and China."
A measure of that progress will be documented in the coming weeks as part of a three-tier focus in 2018.
"First, in the next few weeks, the taskforce will release a substantive white paper with the full results of our research. Secondly, we will expand the taskforce to include law enforcement representatives and academics and representatives from the northern hemisphere; and thirdly, we will convene a meeting in the second half of 2018 to formulate our long term strategy," said Purbrick.
Douglas Robinson, senior manager of due diligence and research, security and integrity at the Hong Kong Jockey Club, provided the current update on the anti-illegal betting taskforce.
Robinson outlined a summary of the current state-of-play of illegal betting markets in Asia, how they threaten the integrity of racing and sports and how they are the prime cause of a number of associated social issues.
"Illegal betting is increasingly large and growing rapidly in Asia," he said. "It threatens the integrity of sports and facilitates money laundering. It causes gambling disorders and other associated social issues.
"It generates volume which eclipses legal operators. Solving the problem requires the cooperation of multiple jurisdictions, stakeholders and governments and greater cooperation with law enforcement agencies."
Robinson said an estimated $140 billion is laundered via illegal betting markets each year.
Associate professor Stacey Steele - also associate director of the Asian Law Centre and associate general counsel of the University of Melbourne and Standard and Poor's - updated the conference on recent developments on anti-money laundering in Australia, Japan, Korea and beyond.
"There is a simple reason behind the current phenomenon of greater money laundering regulation," she said. "That is because of the increase in sports wagering online. The potential returns from wagering are now greater and it's cheap to launder money through wagering."
Steele warned that anti-money laundering regulation was an issue all sports including the racing industry - aside from the obvious reasons including links to criminality - because incurred scrutiny could lead to increased compliance costs, possible penalties and litigation.
Recent law enforcement actions in Australia demonstrated the interaction between financial services and gaming regulation, she said; while the emerging challenge of dealing with increased betting on e-sports was examined.
Professor Changhun Lee - police administration and vice provost of foreign affairs at Hannam University - detailed the magnitude of illegal betting in the racing industry in South Korea and outlined counter-measures for the illegal horse racing betting activities.
He also questioned the accuracy of current estimates of illegal betting around the world. "We need to spend the time and money to more accurately estimate the size of illegal betting turnover," he said.
Professor Lee then presented a summary of his academic endeavours and statistical approach in his bid to produce an accurate estimate of the illegal betting on South Korean racing when he puts it at $US11.1 billion - much higher than previous estimates which he said were no better than educated guesses.
He examined the cost-benefit analysis of controlling illegal gambling activities and the likelihood of betting migration from off-line betting to online betting when the online betting system is legalized and implemented in Korea.
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