Howard Hamilton - Horse Sense LAST WEEK, we looked at some of the problems facing the racing industry, in particular, the plight of Owners. This week, we look at some of the possible short term solutions and invite public comment, so that the authorities and decision-makers can have a wider input to the urgent need for the restructuring of the Racing Industry.
There is no doubt that the Racing Industry should form the focus of our fledgling Gaming Industry. Thorough-bred racing should be the centrepiece around which all other gaming activities revolve.
In the absence of a properly structured Casino activity, racing enjoys an important role in a number of areas. The entertainment factor is without question and begs to be developed.
The contribution to tourism has never been properly exploited and the potential in this area is mind-boggling.
The contribution to the agricultural sector needs to be properly recognised and the export potential, prioritised.
The employment potential is something that no government can ignore. One does not have to emphasise the various areas of our society which find gainful employment, both directly and indirectly, from the Racing activity. Today, in excess of twenty thousand (20,000) people find gainful employment because of the Racing Industry. That number could be doubled if we looked seriously at the restructuring and expansion of the industry.
We recognise that today, we face a budgetary crisis. All over the world, and Jamaica is no exception, lotteries have provided a "quick fix" opportunity for alleviating some of these problems. Lotteries, however, have always been complementary to Racing.
In most jurisdictions public hearings precede whatever decisions are taken on the types of games to be introduced. The impact, one to the other, must be paramount. Were there the public hearings which were promised and proposed prior to the granting of the recent licenses to a foreign company then maybe that license would have been differently structured and we would not have had the disastrous effect that that game has had on the Racing Industry.
I have been unable to find any successful Gaming jurisdiction where there is direct competition for the limited gaming dollar between the Racing industry and lottery games ,especially lottery games ,that offer similar or better odds than those offered by racing. In our situation, not only do lotteries offer better odds but they do so twice a day six days a week. Our situation is even more untenable because very little of the profits from these lottery operations is retained locally.
My recommendation is that we try to correct that position so that the Racing Industry can be developed as the centrepiece of our gaming industry. The following suggestions are offered :
1) Improve the pay out on Racing from 70% to 80% on Win and Place bets with appropriate adjustments to the "exotic" bets. This can be achieved by:
a) Reducing Government tax from 7% to 2 %
- Loss to Government approximately J$200M
b) Remove the 5% contribution to the Off-Track activities
- Loss to the Promoters approximately J$200M.
The take out from the betting dollar will now be 20% i.e., 10%- To Promoters
8%- To Purses for the Horsemen :. Owners, Jockeys, Trainers Grooms Breeders, etc.
2%- To Government
2) Reduce the pay out on all fixed odds Lottery Games from 72% to 60 % - This would provide a level playing field since my understanding is that some fixed odds Lottery Games are currently restricted to a pay out of 60%. This would yield approximately J$1.2B and provide immediate recovery of the lost revenue to Government and the Promoters. The remaining J$800M to be apportioned with a percentage available at concessionaire rates for the rebuilding of the Racing Plant.
3) Immediately invite Requests for Proposals for the development of the Racing Plant with the understanding that Government would look favourably at leasing the existing facilities and provide concessionary loan financing as part of their contribution to the development of the racing industry.
4) Review the operations of Bookmakers with a view to redefining their contribution. The recently restructured British model is worth considering.
5) Increase the surveillance of the mushrooming illegal gambling activity through a special arm of the Jamaica Constabulary working in conjunction with the Betting, Gaming and Lotteries Commission. Make the fines mandatory and painful both to the "operator" and the "punter". A minimum fine of $500,000.00 and/or 6 months in jail for first offenders is not without merit. The scourge of illegal gaming must be brought under control if government is to receive the desired benefits from the Gaming Industry and if the Industry is to offer proper returns to investors
I hope that these suggestions will attract some meaningful comments with alternatives that can be implemented in the short term. Next week, we will look at some of the medium and long term proposals which can be pursued as we build a Racing Industry that seeks to satisfy its full potential as a source of entertainment and investment.
Howard L. Hamilton is a former Chairman of Caymanas Track Ltd. And is currently President of the Thoroughbred Owners and Breeders Association. He may be contacted at: email - howham@cwjamaica.com
