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Q & A with Everett Dobson, Chairman American Graded Stakes Committee

For the American Graded Stakes Committee, 2020 presented challenges unlike anything it has faced before as the pandemic played havoc with racing schedules and caused the cancellation of numerous stakes. The TDN sat down with the committee’s chairman Everett Dobson to discuss the challenges, why it made the changes that it did for 2021 and what might in store for future years.

TDN: Take us through what the process entails when it comes to evaluating stakes races. What are the numbers that you crunch?

ED: We look at a tremendous amount of information. The Jockey Club puts together an enormous amount of what I call objective analytical data that we go through. There are a variety of data points. The objective information that we look at is on the TOBA website, if anyone wants to take a look at it. From that, you get a pretty good indicator of the relative strengths of a race. We look at it over a five-year period and look at the relative performances of the horses over what is now 15 divisions. We actually look at every single race. With some, we don’t feel compelled to look too long. An example would be the Breeders’ Cup Classic. It doesn’t warrant much discussion when it comes to whether or not it should be a Grade I race. It’s the same for the Kentucky Derby and a few other races.

TDN: In what was a very unusual year, there were several major stakes, for instance, the Arlington Million and the Pennsylvania Derby, that were not run. Did that throw a wrinkle into things and how did the committee deal with this set of circumstances?

ED: We had 69 graded stakes that weren’t run in 2020. There were another 63 listed races that were on the calendar that weren’t run. So, 132 total stakes races were not run. Yes, that threw a wrinkle into things. Despite that, we still went through the process and looked at those races. While 2020 was an exceptional year, we still had a fair amount of data for each of those individual races. We felt like we owed it to the tracks, those races, the owners, trainers, breeders and everyone involved to take a look at those races.

TDN: Because of the COVID-19 shutdowns, there was a period when some tracks were the “only game in town” and their stakes races were actually much stronger than normal. How did the committee deal with that issue?

ED: We had a separate call among the committee members a couple of weeks before the session actually started to discuss that very issue. How were we going to approach the process this year? We decided to be somewhat cautious about giving a race too much credit when it came to evaluating it off just the one year. We didn’t want to significantly reward a race because of COVID or the impact of the COVID effect. In the United States, we have a committee that discusses and analyzes and debates the relative merits and strengths of a race. While we do have objective analytical data points, we ultimately use our collective wisdom to assign the grade of the race for the following year. We made a conscious decision to not overly penalize a race or reward a race if it was clear there was a COVID impact on that race.

TDN: There were few changes for 2021. Is there any particular reason why?

ED: There were undoubtedly fewer changes than normal, whether a race was promoted up or down. The answer is, that was the result of our decision to be cautious because of COVID. That resulted in fewer changes.

TDN: There were a handful of stakes this year, including Grade I events, where the quality of the fields was disappointing. Are there any races that are on the committee’s radar that might be nearing the point where they are in jeopardy of being downgraded?

ED: The answer is yes. We actually meet no less than four or five times a year in between the session where we assign the grades. In those meetings, we discuss a lot of what we are seeing in terms of trends within the races we will be asked to analyze. Those trends include things like a situation where certain geographic areas are seeing smaller fields in their stakes races. We will discuss and analyze whether something like that is having an impact on quality. Are races being impacted because of where they are positioned on the calendar opposite other races? We look at field size across the board. We’ve noted that field size in turf races has gone up. That has had some influence on the quality and strength of those fields. We look at the size of the foal crop. We’ve had a significant reduction in the size of the foal crop over the last 20 years. But interestingly enough, the size of the foal crop in Kentucky is actually pretty flat. We do an enormous amount of analytical research and have a tremendous amount of discussion about what we are seeing. We like to see the big picture.

TDN: In recent years, the committee has let it be known that it recognizes that the foal crop has gone down, that top horses race less frequently than they used to and, because of this, there is an overall need to downgrade races or take graded status away from some races. Have those adjustments now been made or is that still a work in progress?

ED: We see a little bit more stability in the foal crop, despite it being down. But there are still legitimate concerns about the foal crop as it relates to the strengths of the stakes over time. Yet, the rate of decline, if you will, has subsided quite a bit, particularly when you consider that the foal crop out of Kentucky is relatively flat over the last five or six years. In our minds, that bodes well for the relative quality. That’s not to say that markets like Florida and California, where there has been significant reductions in the foal crops, aren’t a concern. It is. But Kentucky is relatively stable, and that helps.

TDN: This year, there were some complaints from Kentucky Downs, which felt it had been treated unfairly by the committee. They must be happy since they had more races upgraded than any track. Could you address their situation and why these upgrades didn’t happen sooner?

ED: In some cases, it was a matter of it taking a two-year renewal of a race for us to consider it for a grade. Why it hadn’t happened sooner? I can’t really answer that question without breaking down individual races, looking at the divisions and how a race stacks up against other races. Kentucky Downs, obviously, is a tremendous bright spot in our sport right now and we are thrilled at what they are doing. We certainly see the relative strength of turf racing in the U.S. improving. We are benefitting across the board when it comes to turf racing with all the European horses coming to the U.S. to run, and some of those horses wound up running at Kentucky Downs. Overall, turf racing in the U.S. is doing very well and Kentucky Downs is a significant bright spot when it comes to that.

TDN: In the past, the committee had made it known that it might take a stand when it comes to Lasix. One possibility has been that stakes races run with Lasix will lose their grading. With so many tracks disallowing Lasix in their stakes for 2021, is the committee once again thinking of penalizing stakes where the medication is still allowed?

ED: I hate to say this, but this is a topic I cannot comment on…maybe for obvious reasons.

TDN: The committee members have a pretty thankless job and, at the end of the day, a lot of people are not happy with some of the decisions that it makes. What can you tell people so that they are more sympathetic when it comes to the challenges the committee faces?

ED: I’ll go back to my opening comments. We have 11 dedicated people on the committee that are enormously knowledgeable about the sport, their heart is in the right place and they work really hard. It takes me a good week to prepare for the grading session. It takes a tremendous effort to be prepared to go into those sessions and be able to have a knowledgeable discussion about individual races. I think we do it the right way and analyze things the right way. In other countries around the world, they take a number and do their analysis based on something like speed ratings. They take the human element out of it. When you do that, how do you evaluate things like what happened in 2020? That’s exactly where you need people with knowledge of the sport to come in, weigh in and make the right decisions. We have five racing secretaries on the committee that are spread around the country and represent different tracks. They leave their badge back at home. They work really hard when it comes to being fair and assigning the grades as they should be. Everybody works exceptionally hard to get to the right answer.

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The Sports Business Furlong: Paul Bittar, General Manager of Sports Partnerships at Sportsbet

Growing up in New South Wales, Paul Bittar had an education and background in accounting and economics before spending 15 years focused on the governance and regulatory side of racing. After time as Chief Executive of New Zealand Thoroughbred Racing and on the executive team at Racing Victoria, he eventually landed in England as the Chief Executive of British Horseracing Authority. Bittar is now back in Australia as the general manager of sports partnerships at Sportsbet.

CC: What is one of your favorite racing memories?

PB: I am certainly fond of my first memory of being on course at Randwick with my grandfather and father, both of whom were really keen punters, and racing fans. Randwick in those days, when I was really little, just seemed so immense, so grand, and the race day was hugely interesting. Clearly, I got my love of racing from those first experiences.

CC: You have an interesting background, having worked both as a regulator and also a sports betting marketer.

PB: The past few years, I’ve been lucky enough to work on the wagering and commercial side of horse racing which has given me a different perspective. Although, I’d like to think that as a regulator that I took a fairly pragmatic and commercial view of the world and always seen racing, or certainly the economics of racing, through the eyes of the punter and consumer, which maybe not all regulators do.

I feel with both my domestic and the international experience, working as a regulator and marketer, that I’ve got a pretty well-rounded view of racing globally, and the economics of the sport in particular.

CC: Having worked and seen racing from so many different jurisdictions, what are any major differences that you can identify between the racing industry in Australia versus other countries?

PB: Australia kind of sits somewhere between those highly regulated, vertically integrated, monopoly betting markets, like a Hong Kong and Singapore, versus a completely deregulated market that has very little or virtually no tote market like Britain. Australia fits somewhere neatly in the middle, which, in lots of ways, makes it one of the most vibrant betting markets in the world because you have this real mix between the tote and fixed-odds markets.

CC: Going back to your regulator days, what are some of the important areas of control oversight for a governing body to be successful in regulating racing successfully?

PB: The role of the regulator is to not be seeking to catch people out, but it is to actually educate and inform them along the way, and be engaged with those that you license or regulate to actually ensure that people avoid breaches of the rules.

As a regulator you need to be fiercely independent, so having representatives of those that you actually regulate on regulatory boards has never made sense to me, but I think engagement with those stakeholders, and those that you regulate or license is really important. But I would definitely make the distinction between having direct representation onto boards.

CC: The U.S. market does not have a central body. Can you identify some of the key factors for having a central body govern racing?

PB: I think there would unquestionably be an efficiency dividend in not having all of the individual structures at a state level. So, if you could ever get to the point where you had a genuine central body running the sport, then there would undoubtedly be cost savings, and efficiency dividend there.

Consistency of rules, consistency of regulation, consistency of disciplinary procedures, consistency of penalty structures, a consistency of the treatment of prohibited substances, or the use of medication, all of those sorts of consistencies have to be a benefit to the participant. Consistency of betting rules, really important for the punter. So, I think just greater consistency would make sense from a rules and regulatory perspective.

CC: What are some of the biggest challenges you face when you head a racing regulatory organization?

PB: The key challenges that you have to overcome, or you have to accept, is that you’re just not going to please most of the people most of the time because the nature of your role means that you will, from time-to-time, end up in conflict or disagreement with those that you’re regulating. Challenges play out most pointedly because individual stakeholders see the world through a certain prism. And all of those are on the producer side of the sport.

As a regulator, one of the things you’re predominantly dealing with [is] the producer side of the sport, yet you’re actually trying to deliver a sport that needs to be attractive for consumers, and that really plays out mostly with the fixture list, and how you schedule fixtures, how many fixtures you run on the types of races that you run. So, it’s very easy to end up in conflict with taking a consumer view of the world, and how you try and grow wagering revenue, which really funds the sport, versus those that deliver the sport on the producer side, and how they see the world.

CC: Is it hard to please all the stakeholders and remain impartial?

PB: I don’t think it’s that hard to remain impartial. I think it’s near impossible to please all of the stakeholders.

CC: How important is it to separate the competitive integrity of horse racing from the gambling activities associated with the game?

PB: I think that racing is a bespoke betting sport. Its fixture list is designed largely around maximizing revenue from the sport. It’s not like other sports that are not funded by gambling. So, if you’re the AFL in Australia, then wagering is an important revenue stream to you, but it’s tiny in comparison to what you receive from broadcast rights and ticket sales through the year. Whereas racing should not hide from that because I think it’s actually one of the things that makes it unique and special.

However, I think if you look at the racetracks, they have a really consumer focused view of the world. I think there’s a real balance there between genuinely consulting, and taking their views, and actually having them specifically involved in decision making related to policy and rules. I think the racetracks and the horsemen are hugely important inputs into policy making, and integrity, and regulation, but I don’t think they should have the power over integrity and regulatory policies.

CC: You talked about earlier about having both a pari-mutuel as well a fixed-odd environment. How do those two coexist, and does one cannibalize the other?

PB: Betmakers in Australia run reasonably healthy margins, and not dissimilar to the margins that run on the tote for win and place. There has been this very significant growth in fixed-odds wagering on racing, and there has been a slow decline in the tote. But the overall market for racing has grown exponentially, and the revenues into racing have grown exponentially. It is really interesting in that sense that pari-mutuel, while it’s on a slow decline, continues to be pretty healthy, and the fixed-odds market, while it’s taken a big chunk of market share, has unquestionably driven huge market expansion because of product expansion. So, does one cannibalize the other, yes. To a very small extent in Australia that has happened, but overall the market has just grown exponentially, and racing and the punters are so much better off as a results.

CC: How important is data for punters, or access to data for betting purposes?

PB: Great question, and incredibly important. In Australia you’re really lucky because getting access to racing vision is really easy. Then the next benefit is how that vision is complemented with data, and whether that’s data that’s part of the broadcast, or whether that data is delivered via your Sportsbet app, and all of the wagering operators, or data that’s delivered elsewhere. Racing’s a really data-rich sport, but it can be quite complex data. So, the way you turn that into data points that are easily digestible for the customer is hugely important.

CC: How important is syndication to the health of racing in Australia?

PB: Very. Australia has a huge number of owners as a proportion of the general population, so much more significant than other countries. Australians are prepared to invest in horse ownership, but they often do via a syndicate, or increasingly through micro-ownership. One of the great things that we know about horse ownership, is that even if you own .1%, you still refer to it as your horse. Australian racing bodies have done a really good job of encouraging that type of ownership, reducing the costs for people, and putting in place rules and regulations that encourages syndicates.

CC: How are young people getting connected to the game in Australia as you seem to have a very young demographic compared to other countries?

PB: Racing has done a good job in creating new events and wagering operators, particularly digital operators who naturally tend to attract younger customers, have done a very good job of converting them into racing fans. Australian racing now recognizes that the best marketers of racing in Australia are actually the wagering companies because they’re the ones that actually have the direct interface with the customer.

CC: Any suggestions on steps racing in the U.S. can take to improve its image, and attract a new audience?

PB: I think racing in the U.S. has very much a participant-driven view of the sport. The horsemen hold an incredible amount of power. You have a tote-only model, which is not hugely consumer focused, and you have a sport that’s regulated on a state-by-state basis. While U.S. racing has some incredible racing events, I think the learnings from Australia are that the more that you can take a consumer view of the economics of racing, and build out the economic model, and grow the economic model, then those benefits will flow to the participants. Whereas, it’s strikes me that U.S. racing very much has a participant-driven model reluctant around fixed odds, reluctant around product expansion, terrible adherence to race times, and off times.

CC: What are some unique traits that horse racing has that should be exploited by stakeholders to generate greater interest from fans and punters?

PB: One of the unique things about racing, and taking American given the scale of the industry there, is that if you actually get greater coordination between the key racing bodies, adherence to race times, and product expansion through fixed odds or other, then there’s actually this massive opportunity to put in front of sports customers a race every few minutes in a really scheduled and organized way with centralized broadcast, and centralized off times. That, in itself, would deliver a huge economic benefit for U.S. racing.

CC: What’s the best professional advice you received, and who shared it?

PB: It came from Greg Nichols when I was working at British Horseracing when he was Chief Executive at the time. He recommended to me that I go and work in New Zealand, and one of his main reasons for suggesting that was because New Zealand had no money as an industry. He said to me, “It’ll force you to be really creative, and it’ll force you to be really disciplined about your decision making, and it’ll really benefit you in the long-term by working somewhere that isn’t flush with cash.” I realized on reflection that was a really, really good piece of advice.

CC: Lastly, if you were in charge for a day of running a central body of racing in the U.S., what would be the first action item you would do to improve the business financial side of the sport?

PB: I would do two things simultaneously. I would embrace fixed odds, and I would ensure an adherence, and a coordination of race times.

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“This Now has Some Permanence”: TOC’s Greg Avioli on California Handle, Purses

Recently, TDN published a data set illustrating how the racing industry in California has undergone a dramatic shapeshift, both before and during the pandemic. New betting patterns have constituted a quarter-billion-dollar boon for the advance deposit wagering (ADW) industry at the expense of the California horsemen’s purses.

In a nutshell, as compared to a comparable period in 2018, the number of races this year has declined 30%. Although the overall handle has declined 18.8%, purses have dropped more than 26%.

To discuss these findings, we spoke with Thoroughbred Owners of California (TOC) president and CEO Greg Avioli. Prior to joining TOC, Avioli served as president and CEO of The Stronach Group (TSG) and of Breeders’ Cup Limited. Prior to that, Avioli was the National Thoroughbred Racing Association (NTRA)’s COO and general counsel, and is the founding president of the organization’s political action committee.

The following Q&A is from a longer, more discursive conversation. Any edits have been done in such a way as to streamline extraneous portions. The remaining text has been edited only very lightly for clarity.

DR: What are your main takeaways from the data?

GA: We’ve seen a fundamental shift in the economics of the industry in California.

DR: What are the most noteworthy changes you see?

GA: I think it jumps off the page at you: For the projections for the whole year, you’re looking at purses generated in California, excluding Breeders’ Cup, dropping from about [$87] million in 2018 to around [$64] million in 2020. That’s a [near] 30% decline.

I do not expect to see the on-track generated purse levels or the OTB-network generated levels come back to where they were pre-COVID. I believe this now has some permanence to it.

DR: During the initial months of the pandemic, racing was pretty much the only betting game in town. Has the reintroduction of other sports into the marketplace impacted handle on racing?

GA: Of course. If you just look at Golden Gate as an example, during the early days when Golden Gate was one of the few tracks running, they had record handle for them–as much as $4 to $5 million a day. Now that you have the return of most of the other major sports, it has returned to its traditional $1- to $2-million-a-day range. That’s the case, order of magnitude, with all of racing.

More recently, it was a bit of a shock to folks within the industry to see the [roughly] 50% reduction in total handle for both the Derby and the Preakness. If those had been run earlier in the year during COVID, I expect those declines wouldn’t have been so great.

The advent of sports wagering in the major population markets of New Jersey, Pennsylvania and Illinois, coupled with the return of live sports, has definitely resulted in a decrease in the overall rate of ADW handle. But [ADWs are] still going to have a fantastic year.

DR: How do we fix the hit to purses, though? As Pat Cummings of the Thoroughbred Idea Foundation (TIF) has said, the splits on betting need to be reviewed. At the same time, he warns that a takeout hike would only “hasten racing’s handle decline.” Do you agree with him?

GA: I believe that both need to be reviewed. I don’t agree that you cannot review takeout in the context of looking at everything else. When you’re looking at almost [30%] reduction in purse generation in the largest racing market in California over 48 months, you owe it to my constituents, the owners, to look at “X.”

The whole point of this economic model is that it was derived 20 years ago for ADW. There’s no question it’s had its benefits for California. It’s also been extremely lucrative for the operators. So, we’re just looking at: What is the model that is sustainable going forward?

One thing the folks who operate the major ADWs in the state–TVG and TwinSpires and Xpressbet–these are business people, right? They understand business numbers. None of this is personal. Right? If we went to the ADWs and said, ‘Guys, we’re off [30%] of our revenues–of our income–essentially for two years, we need to change the model.’ Of course, everyone has to look at the model.

DR: This period has proven to be a windfall for the ADW companies like TwinSpires and Xpressbet who, at the same time, have seen operating expenses at their tracks slashed due to the reduction in racing. The TIF calculated that Churchill Downs’ online wagering profits rose 39% in the second quarter of this year, even without the Derby. How does this dynamic factor into things moving forward?

GA: Which dynamic are you referring to?

DR: Where’s the short-term financial incentive for companies like The Stronach Group (which owns Xpressbet) to bring patrons and bettors back to their brick-and-mortar facilities?

GA: I think that there are significant reasons. Look at Del Mar, for example. They have one of the most robust food and beverage operations in the whole country when it comes to racing. On-track wagering is the most lucrative form of wagering–of course you have incentives to bring fans back to your facilities.

The Stronach Group makes more money on a dollar wagered at Santa Anita than they do bet on Xpressbet. So, I disagree with that premise.

If your question is: How do we address the reality that Churchill Downs as a racetrack owns an ADW, as does The Stronach Group? I’m really not as focused on Churchill Downs as [I am on] The Stronach Group because they own two of the largest tracks in California.

DR: But that’s a different dynamic than Del Mar, though. Del Mar doesn’t own an ADW-The Stronach Group does.

GA: Correct. I’m not privy to–they’re a private company–all the books and records of The Stronach Group, but I know for a certainty that that entity is significantly better off if people are wagering at that racetrack–particularly at California where they have a relatively minor market share for ADW. I’d say [almost] 80% of [ADW wagering] in California is TwinSpires and TVG.

DR: So, where are you looking to make fixes?

GA: If you go back to what I said about purse generation projected about $85 million this year, what is coming out of that? There are two sides to the equation. One is how can we reduce expenses that are paid out of the purse account right now so it can go back to purses, right? And big expenses that we have right now for that would be the CHRB [California Horse Racing Board], whose budget will be over $18 million this year, with $9 million coming from purses.

That’s a budget that has increased on its own by 50% over the last five years from somewhere around $12 million. Even though the number of horses, the number of races, number of owners, number of trainers, everything that they regulate has declined 10 to 30%, their budget has gone up 50%.

We’ve made it very clear to them–to the board members and the legislators–that’s not good government. We need to work on that. There is some funding in the recent bill that’s just passed–the animal welfare bill in Sacramento [AB 1974]–that will allow some of the [state revenues from racing licensing and fines] that previously went to the general fund, to go to fund expenses at UC Davis that were previously paid for by the CHRB. So, it’s a first step in a long journey, but that’s about [$1.2] million a year that will unburden the horse industry right now.

We have the stabling and vanning fund that will be operating at almost a [$3.7]-million deficit this year, because it is primarily funded from wagering at the OTBs and the satellites, which have been largely dormant. We cannot continue to pay $5 million a year out of the purse account for stabling and vanning, particularly when we are funding a capacity of stalls of approximately 3,200 while dealing with horses in those stalls of approximately 2,400. We’ve got to restructure that program.

We have taken significant steps in the last 12 months to shore up and improve the safety of the backside for live racing and training, so that we can stabilize if not reduce the cost of workers’ compensation, which is another multi-million-dollar hit to the purse account.

We’re doing the things we can do on the big picture numbers and the expense side. Obviously, the way to grow a successful business is, long-term, not to cut costs but to increase revenues. So, on the revenue side, first and foremost, and this is a longer-term effort, but we have to increase our field size.

You’ve seen the decrease in the number of days of racing, and now that we are down to three days of racing [a week], we have to have stronger field sizes for those three days. And that’s a topic of conversation for another day: How do you go about doing that? But the days of providing free year-round training, and yet having horses participate as the trainer chooses without regard to the broader economics, that can’t continue.

DR: You mean there might be some kind of stabling fee imposed?

GA: One way or another, we have to come up with a shared vision between the racetracks and the trainers in order for the business to survive. There has to be a minimum number of horses participating on a regular basis in the state. Right now, we’re much more old school, where everyone does their own thing. I run when I feel as though my horse is ready to run–can’t rush them. If in fact I have a couple horses in training for a year that don’t make a start, but the industry is paying for [them], that’s a challenge to my business. That kind of stuff probably has to be addressed.

DR: That’s a tricky thing to address though. All we’ve got to do is look back at the Santa Anita welfare crisis–that was a big concern, trainers being compelled to run.

GA: There’s a big difference between a heavy handed–“you run or you’re gone”–and an educational process where everybody starts nodding their head and going, ‘I never realized.’ And if we collectively don’t do “X,” we’re not going to make it.

DR: At the end of the day, it’s the horsemen who are being crushed by the purse retention rates with ADWs. What should they be doing right now?

GA: The first is philosophical–we’re an ecosystem. There’s no way to significantly improve California racing as an industry and as a product if it’s not done together. Almost any party can block something. If the horsemen go to Sacramento and they want something and the tracks don’t, it’s not going to happen. Vice versa.

We have got to get leaders to emerge from all segments who can say, ‘What can we all do together?’ And really take the time to understand the complex economics. What can we do to fix this? Until there’s a commitment to work together and realize that things are going to have to change–already have changed–then we’re just wasting a lot of energy trying to convince people of your idea.

DR: The ADW contracts expire at the end of the year. What’s the status of the negotiations?

GA: The way the ADWs work in California is another most remarkably Byzantium deal that legislators set up in 2000. All those licenses are set to expire by December 31st. So, the requirement for accepting wagers after your license is granted is that you have to have what is known as a hub agreement with one of the following parties: either the TOC or with a Thoroughbred racetrack running at least five weeks. That would be Santa Anita, Golden Gate, Los Alamitos, [Del Mar].

There’s a statutory cap on the amount that [an ADW provider can receive from an ADW wager made by a California resident, which is 6.5%]. All the ADWs can go to The Stronach Group, Del Mar, Los Alamitos. If they go to one of the racetracks and they work out an agreement with them, it comes back to the TOC to approve it, and the only thing we can approve or disapprove under the law is the rate. And if we think the rate is inappropriate, we can propose a different rate. And if that rate isn’t agreed to, then there is a very short specific arbitration process.

DR: Have you made any projections on what those rates should be?

GA: You can do the math. ADW [handle] is going to be $800 million in California this year, and every point of fee paid to the ADWs is $8 million. So, add a 5% fee which has been a standard rate for the last decade out here on the larger ADWs, that is $40 million that they’re getting in terms of post revenues–out of ADW–that would otherwise be going to the purses and commissions. If there was 4%, then it would be $32 million. Three percent, $24 million. We have not determined what an appropriate rate is–all this is happening in real time right now with us analyzing these numbers [and making] projections into the future.

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Q&A: Inglis’s Sebastian Hutch

Within the backdrop of a global pandemic, the Inglis Australian Easter Yearling Sale Round 1 was staged as a virtual sale in early April. At the time, Inglis made a decision to also offer vendors the chance to sell their yearlings at a live sale in July. TDN’s Gary King caught up with Inglis’s Sebastian Hutch to find out more about Easter Round 2.

TDN: Easter Round 1, highlighted by a AU$1.8-million Snitzel (Aus) colt, was deemed a major success especially considering the circumstances. You must have been pleased with how it went?

Sebastian Hutch: I think it’s fair to say that the version of the sale which was held across the traditional date in April exceeded the expectations of the very vast majority of participants. It was uncharted territory for a major international yearling sale to be held in a virtual format, so there was an element of trepidation in advance of the sale as I’m sure people can appreciate.

However we had outstanding support from vendors, buyers and other industry stakeholders, while our own internal structures, particularly in the case of IT, performed very efficiently. Inevitably we learnt plenty as a collective from the experience and it has helped us find ways of further improving the services that we offer through our auction processes.

TDN: And now Easter Round 2 is set to take the form of a traditional live auction on Sunday, July 5th. What are your expectations?

SH: Easter Round 2 is a concept that was formulated during the period of great uncertainty in late-March, early-April. It was recognized, that despite best endeavors, some vendors just were not going to be in a position to achieve appropriate results through the virtual sale, primarily due to their respective locations. With that in mind, it was agreed to offer an alternative sale that would be scheduled for a time when we were hopeful that a live auction would be possible.

A few days out from the sale, having encountered a number of challenges, we have yearlings on the complex and inspections underway from Wednesday. To that end, it is a relief to have made it to where we are. Understandably given the circumstances, expectations are guarded. Interest in the sale from investors has been encouraging, but we have some restrictions in terms of those who can participate owing to racing authority and state government guidelines which is far from ideal.

However, the stock is of good quality and the consistent success of Easter graduates over the years sets a strong precedent for the likelihood of top-class racehorses emerging from this session of the sale.

TDN: What COVID-19 related precautions have you in place for people attending the sale?

SH: We have a COVID-19 Safety Plan in place which takes into account the prescribed guidelines from the relevant authorities and has been approved by them. We require all attendees at the complex, be they vendors, buyers or staff to register their attendance in advance of the sale through a portal available on our website. We will be implementing social distancing measures and promoting good hygiene as a matter of priority. We are conscious of creating an environment that is safe for our patrons, who we know are excited at the prospect of being able to attend and participate in a series of live sales again.

TDN: As expected for an Easter Sale, there looks to be a strong group of horses on paper. Could you highlight a few that would especially appeal to an international audience.

SH: We are very pleased with how the catalog has come together. It is made-up primarily of horses that were not offered at the sale in April, horses that are effectively new to our buying bench. A huge part of the appeal of the Australian market is that if buyers, domestically or internationally, want access to the progeny of I Am Invincible (Aus) or Snitzel (Aus), two of the best stallions in the world, they have to shop in Australasia.

We are fortunate to have quality offerings by each in the sale, in particular through the Yulong draft. The I Am Invincible/Gypsy Diamond colt, lot 85, is a star, as is the Snitzel/Gypsy Tucker filly, lot 86. The Yulong draft is the highlight of the sale. Yulong is a hugely progressive breeding operation that has made massive investment in quality stock in recent years and this is reflected in the strength of their draft.

In terms of other stallions, it is fantastic to have Frankel (GB) and American Pharoah well represented in the sale. Over 30% of Frankel’s Australasian-bred progeny are black-type horses while American Pharoah, as expected, looks to be making a big impression with his first 3-year-olds in the Northern Hemisphere.

The timing of the sale is also potentially advantageous to some of the younger stallions, a prime example being Vancouver (Aus) who has enjoyed a purple patch with his first 2-year-olds since May, with five individual winners and a stakes winner, pegging him as a really exciting prospect going forward.

From a pedigree point of view, among the most interesting are the Capitalist/Savannah’s Choice filly, lot 39, who is out of a half-sister to the dam of 3 champions in Japan including Saturnalia (Jpn), as well as the I Am Invincible/Miss Atom Bomb colt, lot 95, who is out of a half-sister to the great Winx (Aus).

TDN: What’s the best way for international participants unable to travel to get involved? Will there be an option for online bidding?

SH: As is the case for all of our auctions, we will have our online bidding service available. Interested parties just need to visit https://inglis.com.au/sales/onlinebidding/ and follow the simple process to register.

Additionally, we will have the sale streamed live through our website. The sale will be worked by many of Australia’s leading agents and trainers, while the Inglis Bloodstock Team is always available to assist. I encourage anyone who is considering getting involved in the sale to contact a member of our team and every effort will be made to facilitate any requirements.

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