By Emma Berry
In two frustrating and financially damaging racing seasons for Ascot, there has at least been a glimmer of light gleaned from its decision in 2019 to become involved with the Hong Kong Jockey Club (HKJC) and the UK Tote in launching the World Pool.
In that debut year, £92 million was bet into the World Pool on racing at Royal Ascot. Amid an unthinkably torrid 2020 season, in which the Royal meeting was staged behind closed doors, that figure rose to £137 million. It improved again this year: four of the five days produced record figures, with the opening day tally being in excess of £31 million.
World Pool's British foray started out in partnership solely with Ascot but it now incorporates Newmarket, Epsom, Sandown, Goodwood and York, with 10 new World Pool days on the calendar during 2021 bringing the total to 16. The next to be included is back at Ascot for the meeting featuring the G1 King George VI and Queen Elizabeth S.–a race with the potential for a mouthwatering clash of the generations. Though the planned inclusion of the Shergar Cup meeting has had to be halted for this year owing to complications surrounding the system of on-the-day reserves at this unique event, the team at Ascot is naturally thrilled to have been involved from the early days with a project from which it is already reaping significant rewards.
“It is genuinely game-changing for us in terms of revenues from betting activities,” says Nick Smith, Ascot's director of racing and communications.
“What comes through the Hong Kong World Pool, from whatever angle the money actually travels through, it's by far and away a bigger exercise than any kind of return from domestic betting. And it has enabled us, during a period which has been nothing short of catastrophic to the racing industry for two years, to maintain credible prize-money for Royal Ascot.”
The key figure behind the formation of the World Pool is Winfried Engelbrecht-Bresges, chief executive officer of the HKJC, which this week announced its highest ever turnover from the 2020/21 racing season, with HK$136 billion (£12,672,887,694) wagered across 88 meetings at Sha Tin and Happy Valley. German-born Engelbrecht-Bresges, who has been at the HKJC since 1998 and is also the vice-chairman of the International Federation of Horseracing Authorities, is nothing short of evangelical when it comes to the subject of the globalisation of racing.
“This idea goes back to 2007 and the Asian Racing Conference in Dubai,” he says. “I put it under commingling, that we should have global events and we should come together to create global pools. If you look at the World Pool, Hong Kong is the key global player due to our pool size. So even in a World Pool, 60 to 70% of the turnover comes currently from Hong Kong. But totalisator markets are driven by liquidity so you have to bring the big liquidity in to create an effect, and that's why you have to bundle the efforts, because the higher the liquidity is, the more it is attractive to the customers.”
The World Pool has also operated as a vehicle to incorporate some of the major international races which fall outside the Hong Kong racing season in order to combat the illegal betting market on such events.
“Because we cannot cover certain races, we had to convince the government that it would make sense to include the summer, to cover some of the global race meetings which we couldn't,” says Engelbrecht-Bresges. “I think that this has an overall benefit to the industry with Covid as there is a significant challenge regarding the income. It combines the customers' interest with generating income especially for the countries [involved]. In British racing, the range is between £600,000 and £800,000 generated per meeting to go to the racecourse, and that goes back to sustaining the operation and to prize-money. There are not many sponsors who pay you that much, so this is a real boost to the industry.”
Not only is Royal Ascot one of the most globally recognised meetings, but Engelbrecht-Bresges points to the fact that HKJC has long had a good working relationship with Ascot. It was therefore a natural starting point.
“We have the same philosophy regarding international racing, so that's a tradition we have had for over 20 years,” he says. “Then we have the strategic relationship with the UK Tote where we have developed commingling, which is practically a globalisation of Hong Kong racing. Now, 20% of our income comes from streaming our races globally and having a strategic partner like the UK Tote. We have followed the principle that the bet should be taxed in the country where the customer is, but it comes into our pool where we have huge liquidity. For us, the next extension was how we can use this concept, not as Hong Kong-centric but as global-centric, and create with Ascot and the UK Tote this platform. Now others have joined as wagering operators to embrace this World Pool concept.”
Engelbrecht-Bresges notes that the popularity of British racing in Hong Kong has been a key factor in the expansion of the World Pool in the UK, but he is keen to create a balance across Europe.
He says, “With the permission we have now to cover the summer meetings, Ascot and the King George is another extension, but there are wonderful races we can cover and with our partners in Epsom we included one of the most prestigious races in the world, the Epsom Derby. That was naturally another platform where you could launch the World Pool, as well as some of the races in Newmarket, Goodwood and Sandown. We have have to also look to our French friends. There are so many top-class races in Europe in the summer that naturally gear themselves to becoming World Pool races.”
The money earned by the individual tracks through the World Pool is in “hybrid” fashion, through a combination of picture rights, percentage of turnover and the success of any given race.
From the point of view of the Royal Meeting, Nick Smith says, “With that in mind, the extra races we have run over the last two years have been a big help to the whole enterprise. That wasn't the reason it was done–there was a multitude of reasons, including expanding the opportunities for horsemen at certain levels, but on top of that it has significant benefits through the World Pool, streaming rights and media rights.”
He adds, “When, say, a Japanese horse runs [at Ascot] and they take betting [in Japan] for that race we get a cut of the media rights for that race, so it does happen in other jurisdictions, but the reality is that the Hong Kong pool is so huge compared to any other pool that it is completely dominant.”
The benefits to the racecourses involved, and therefore more generally to at least a section of British racing, are obvious, but clearly for the World Pool to be successful there must be good reasons for punters to bet into the pool via the Tote and Tote Ireland.
Recent figures released by the Tote from Royal Ascot certainly indicate that to be the case. Throughout the meeting, Tote+ (which offers 10% bigger dividends for win bets placed directly via the Tote website or app) beat the starting price on 21 of the 35 races and matched it on the other 14 races owing to the Tote guarantee. Overall, a £1 bet on every winner at the meeting would have led to an 11% higher return for Tote+ bets. The Tote Exacta and Tricast paid an average, respectively, of 34% and 87% more per race.
“A lot of the time the favourites are a little bit shorter but the outsiders are a bit longer, so therefore you create interesting new options, especially if it comes through more exotic bet types, like the quinella,” says Engelbrecht-Bresges, who aims to expand the World Pool platform through the exotics. “You would be able, through the new Tote protocol, to bring in more exotic bets, like the Triple Trio. There is a major growth potential for new products that you cannot have on a fixed-odds platform.”
The partnership is of course a vital one for the UK Tote, which has had an agreement with HKJC since 2016 for UK customers to bet into the Hong Kong pools. Subsequent to that the UK Tote Group, originally known as Alizeti, struck a deal to buy the Tote in stages from bookmaker Fred Done. That process was completed in October 2019, a few months after the launch of the World Pool at Royal Ascot.
Alex Frost is the chief executive of the UK Tote Group and is a staunch participant in British racing as an owner/breeder and the proprietor of Ladyswood Stud. He says, “World Pool allows British racing to tap into the enormous opportunity provided by pool betting which is still the predominant method of betting in most leading racing nations. Through the creation of World Pool by the Hong Kong Jockey Club, the UK Tote now has a platform to work with fellow pool betting providers to ensure vast pools for customers which is a very appealing betting proposition. At the same time we're showcasing British racing to a global audience.”
There is something of a chicken-and-egg scenario when it comes to attracting international runners to Britain, however. Ascot, and in particular the Royal Meeting, has long hosted runners from across the globe but, with an ongoing funding crisis for the sport in Britain, the prize-money for the country's most prestigious races falls short of some of the newer international races currently luring connections to travel afar. The extra income that can be earned from international runners through streaming rights is vital, but to encourage those horses in the first place, decent pots must be maintained or even enhanced.
Though owners have been allowed back on English racecourses for some months now, and more recently up to 4,000 racegoers allowed at regular meetings, the hospitality side of the racing business has badly affected throughout the pandemic.
“The large independent racecourses have really struggled without crowds,” says Nick Smith. “For us they are our primary income stream. The Hong Kong Jockey Club World Pool has been one bright star on an otherwise very, very cloudy horizon for the last couple of years. As we get back to normal, obviously that revenue stream will be less prominent but it has certainly been extremely helpful to us.”
He adds, “Although we had up to 12,000 people coming in for Royal Ascot this year, that is still a massive loss-making exercise for us. We are miles away from getting anywhere near profit and this year will cost us well over £10 million in losses. So having the World Pool has been fantastic.”
The World Pool currently operates across six continents, with partners including Tabcorp in Australia, France's PMU, as well as the Singapore pools and UK Tote.
“Naturally they have partners, so for example the UK Tote is connected to American racing operators, and Tabcorp to New Zealand,” explains Engelbrecht-Bresges, who, unsurprisingly, already has his eye on further geographical expansion.
“So we cover the six continents and we have already had World Pools in the UK, South Africa and Dubai, and I can foresee that a meeting like the Breeders' Cup would lend itself perfectly to such a concept. It would be the first race meeting in the US we would look to include. In Australia, there are races like the Melbourne Cup or The Championships at Randwick. They would be perfect to add to the World Pool.”
He adds, “I believe in global racing. I believe racing has to go to the next step of globalisation, and naturally therefore key strategic partners have to work together, they have to have the same vision and to look at how we want to develop this. I think we have built a terrific platform and the next step is looking at how we can expand it. I am passionate about the World Pool and I fully believe it is a major way forward in the globalisation of racing.”