Presentation to the Darley Flying Start Conference at Keadeen Hotel, Newbridge, Ireland
October 25th 2006

Dean Roethemeier

What Ireland Can Learn from The Kentucky Derby

Hello. My name is Dean Roethemeier. I’d like to take this opportunity to thank everyone for coming today and for your hospitality and time during our stay in Ireland. For a bit of background, I worked at Churchill Downs before coming on this course, so this is a topic that I am particularly interested in. As you can see, the title is What Ireland Can Learn from The Kentucky Derby. I like to think of it more as “What a great racing country can learn from one of the world’s great races.”

Introduction/Focus

It is my opinion that a country or a track’s biggest racing days set some of the tone for the rest of the racing in that country. With that in mind I approached this topic by trying to extract some of the successes from the Kentucky Derby that could be applied to the Irish Derby or any other big race, for that matter. I will start by comparing Irish and American racing as well as the Irish Derby and Kentucky Derby. After that I will go into the individual areas that I feel make a big race a success. This might be a good opportunity to explain what I mean by a big race or a big race day. This is usually the marquee event for a track. It can be a Classic race or could be the Breeders’ Cup Day or Arc Day, for example. It serves as a showpiece for the track and for the industry as a whole. At the end of the presentation I will try to give some key lessons to be learned that could be applied to Irish racing.

Differences and Similarities in Irish racing and American racing

I’ll begin by giving a sort of state of each country in terms of racing. We will start with Ireland. Firstly, I think Ireland can be described as a “racing nation.” There is a high rate of racing literacy in the country. This is evident everywhere I have been in the country and can be seen by the number of betting shops, the general awareness of people about racing and the rich history of horse racing in Ireland. My next point is somewhat along those same lines. There is a large media presence in the form of racing dailies and weeklies, presence on television, race results on the radio and prominence of racing in the nation’s sports pages and newscasts. The next few points will probably be somewhat obvious to everyone in the room. Wagering in this country is mainly through bookmakers, rather than Tote, which I see as a disadvantage that I will discuss later. Racing is nearly exclusively on turf. Fields are oversubscribed due to an abundance of horses and a lack of races for them. This is tied to the final point on Ireland – that there are few tracks and short meetings. This has to do with the racing surface as well as tradition. As a whole, Ireland prides itself in the quality of its racing, not the quantity. The United States on the other hand has a very low racing literacy as a whole. Aside from some pockets of the country where racing is popular, you would be hard pressed to find a shop that sold a Racing Form or a person on the street that knew who won this year’s Travers Stakes. Legal wagering in the States is exclusively through Tote. Racing surfaces are mixed, but the Classics are run on Dirt as are the majority of races. Though it may be hard for you to imagine, there is a problem in the US with short fields. There are many tracks and most hold long meetings. With the exception of Triple Crown coverage, there is a small media presence. Most tracks must pay to get their results into the newspaper and it is a once in a decade event that a horse appears on the cover of Sports Illustrated.

The Irish Derby vs. the Kentucky Derby

I would say that the Irish Derby and the Kentucky Derby are both the biggest race in their respective countries. There may be races with bigger purses, but these are the races that people think of when they talk about racing. Both of the races are similar in their conditions, purses and sponsorship. Just to give us some perspective, I have included some numbers in terms of wagering and attendance. All of these numbers refer to this year’s Derbys. This year over the course of the 3 day Derby festival €6.1 million were bet through the bookmakers and Tote at The Curragh. Compare this to the $26.2 million bet at Churchill Downs on Derby Day alone. What is even more staggering is that $175.1 million were bet through the Tote on Kentucky Derby Day races nationwide. These numbers are a little unfair to compare as the betting environments in the two countries are so different. However, attendance is a standard figure to compare. 47,200 people attended the 3 day Irish Derby Festival at The Curragh. On the other hand, 157,536 people attended the Kentucky Derby this year. Approximately 100,000 of those would be general admission at $40 per person and the other 50,ooo people would be reserved seat holders, Turf Club members, suite holders or guests in hospitality tents. All of those people would be paying significantly more. While it would be foolish to say that Churchill Downs has done everything right in terms of this event, it is safe to say there is some room for improvement in Ireland.

The Race as An Event

This slide has everything to do with the way the race is treated and marketed. The race should be treated as something that is bigger than just a race. It should be something that transcends racing. A recent ad campaign that comes to mind that illustrates this concept is that of The Arc. A few years ago their ad campaign played on the race’s namesake by stating – “It’s more than a race, it’s a monument.” The goal should be to make the race something that is noticed not just by racing fans, but anyone interested in sports, gaming or the nation’s social scene. That said the race should be marketed outside of the traditional channels. It should be presented as “the thing to do” at that time of year. This is something that the Kentucky Derby has accomplished with the first Saturday in May. The message is that there is only one Derby Day every year - don’t miss it. Public relations should be seen as another arm of the marketing approach and the press box can be a great tool in creating excitement around the race. An effort should be made to invite media that is normally not interested in racing to cover the race. This can be anything from foreign newspapers to fashion magazines sent to cover the glamorous people and celebrities. If the Irish Derby is the only horse race that a person ever sees in their favourite publication then it begins to take on some importance in their mind. It begins to become more than just a horse race.

Wagering

As I mentioned before, it is quite hard to compare the wagering of the Kentucky Derby to that of the Irish Derby. In terms of revenue to the industry, marketing and possibilities there is just no comparing the two. While I don’t think there is anything inherently wrong with the presence of bookmakers, I do believe that a stronger tote presence is the way forward as it means more revenue and more control over racing’s fate. A country with a strong tote presence has many revenue-increasing possibilities to explore. I will go over some of the successes that the Kentucky Derby has seen in terms of Tote. The first is multi race wagers. These range from a Kentucky Oaks-Derby double to pick threes, pick fours and pick sixes. These types of wagers are good because they play on the strengths of the race’s supporting under card. The next are exotic wagers. For the most part these include wagers that reward picking the top 2, 3 or 4 runners in order. Since the Derby usually has a large, contentious field the opportunity for a large payout becomes good. In the case of the Kentucky Derby, these “life altering” payouts on superfectas have become a marketing tool in themselves. Everyone feels that they have a chance of winning $50,000 - $100,000 – or more if they can just string together the 4 best horses on the day. In nearly every Tote system the track and industry makes more money on these exotic wagers than it does on straight win or place betting, so you can seen the benefit of these becoming more popular. A recent development in Kentucky Derby betting is Tote run ante-post betting. This is a great way to capitalize on an enormously popular way of wagering on the big race. Of course, all of this is easier said than done. One way that I found that is particularly effective in increasing interest in multi-race and exotic wagers are to offer guaranteed pools. For example, if there is a guaranteed $100,000 pool for the Derby trifecta and $150,000 is bet into the pool, then the track pays nothing into the pool. These things must be started small to minimize risk, but they are reassuring for wary horseplayers.

Quality of Undercard / Festival

Something that tracks around the world have done with some success is to use the success of their big day to create excitement around the day before. The day before the Kentucky Derby used to known as nothing more than the day before the Kentucky Derby, but now stands on its own as Kentucky Oaks Day, drawing large crowds and large sums of wagers. With so many resources invested in the big race, it would be foolish to not capitalize on that excitement. Stakes schedules can be manipulated to concentrate good races on the day of the big race. Stakes can also be created for this purpose. Purses on Derby Day should also be higher for every race that day than they would be for a comparable race on any other day. This serves to attract full, quality fields for everything from maidens to Group races. The increase in purses is worth the investment as the increased quality serves to get people’s attention (and money) focused on your track for the entire day or weekend. A strong under card can also help to increase betting on multi-race bets through the Tote. Punters feel much more confident placing wagers on quality races than they do on non-quality races. All of this serves to use the success of the one race to turn the entire day into an event that should not be missed by spectator and punter alike.

Facilities

There is a great comparison in terms of facilities between The Curragh and Churchill Downs as they have either been recently renovated or will be renovated soon. It is hard to talk about attendance without talking about facilities to handle the people. Here are some of what I think are the keys to a good racetrack. The facility should be expandable. I don’t mean that literally, but rather it should be big enough to handle the crowds without seeming empty on a normal race day. It should be designed to allow crowds to move freely from one area to another. A significant way to increase revenue is to offer luxury accommodations at a premium price. Corporate suites and the like are becoming increasingly popular. Along those same lines, it is a good idea to provide options for racegoers. There should be many different levels of admission or seating so that everyone can find their own place in the scheme of things. And finally, the facility should be multi-use if possible. Racetracks are terribly inefficient in this way and every effort should be made to maximize their use in the off season.

Community Involvement

This topic can be seen as a small piece of the puzzle, but it is an important one. It is important for the racetrack to support the local festivals and celebrations surrounding the event. The Kentucky Derby Festival is a two week long event that builds excitement up to the big day. None of these festivals would be possible without the involvement of local businesses, so their participation should be encouraged. All of this helps to promote a sense of ownership over the race from the community. The event should be something that everyone is proud of, active participant or not. The entire community should want the event to be a success and if this is the case, then it will be.

What Irish Racing Can Learn

I will try to summarize my presentation into a few takeaway points. The race should be marketed as one of the great sporting and social events on the calendar. It should be more than a race. Invest in Tote. I believe that this is one of the best ways to have control of the destiny of the industry. Facilities must be used to maximize revenue while the people are there. Every race on the card of a big day should be stronger than it normally would be on another day. And finally, support a local festival around the race. These are not the only things that can be done, but they have been important in the success of other great races. Thank you all again for your time and I look forward to answering any questions you may have.

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