The Caymanas Track divestment…
Two entities, Supreme Ventures (SVL) and Caymanas Racing and Entertainment (CRE) are vying to win the divestment bid of Caymanas Track Limited. The Business Observer today examines both bids.
SUPREME Ventures Limited (SVL) aims to pump over $1 billion into the operations of Caymanas Track Limited (CTL) over five years for the horse racing complex which is presently in the process of divestment.
SVL intends to raise the profile and revenues of the government-owned complex, which is the sole promoter of horse racing in the island.
SVL wants to lease the complex for 30 years, upgrade the facilities, include more local and overseas betting, introduce slot machines or video lottery terminals (VLTs) into the complex and include restaurants.
“Over a five-year period our investment will exceed $1 billion,” stated Brian George, SVL president and chief executive officer, in an interview with the Jamaica Observer on Monday, at his New Kingston head office. “It’s not a trivial expenditure.”
If successful, SVL expects to break even in the first year of acquisition after which its revenues are projected to grow in the third year with the introduction of VLTs into the complex. SVL declined to reveal specific revenue projections in order to respect protocol with the Development Bank of Jamaica (DBJ). When pressed on revenue targets, George only said that the projections were conservative.
“We did not come out and say we would double revenues. We made a responsible bid in terms of revenues and showed why we believe we can achieve these revenues,” he said.
SVL is one of two entities vying to win the divestment bid of CTL. The second bid came from Caymanas Racing and Entertainment (CRE), whose directors include Dr Graham Brown as chairman, Michael Bernard, Gassan Azan, Richard Lake, Benton Woodbine and Greg Bell.
The CRE team plans to invest ‘in excess of $1 billion’ and bring the track to a position of profitability in 2016. George argued that SVL’s advantage is its existing 1,400 islandwide point-of-sale betting distribution network which can be leveraged to grow revenues at the track. Second, its management team, which is already focused on the gaming and betting industry.
“We have a cohesive management and board structure. There are the checks and balances in place,” he said, adding that SVL’s listing on the Jamaica Stock Exchange adds another level of transparency which benefits the public.
Both entities await an imminent response from the DBJ on the preferred bidder, who should have already been notified.
SVL’s bid also contains “a vision” of potentially relocating the track closer along the highway corridor in St Catherine, in order to facilitate ease of access from other towns and cities.
“We had advanced talks with developers who would be interested in a development project that could take advantage of the emerging highway system. It would allow us to bring potential customers from the Ocho Rios, Montego Bay and the Kingston area for a new greenfield track environment and other amenities,” George explained about a long-term possibility.
George explained that SVL would invest in the existing CTL by updating the architecture and facilities while increasing the purse and payout.
“Increasing the purses benefits the owners, trainers, jockeys and players,” George reasoned. “When players get more money in their hands they are more likely to reinvest it and it causes the money to circulate and builds the business. We can speak directly of this from our lottery business…We intend to bring that philosophy to Caymanas.”
In May, Government formerly advertised its intention to accept bids for the privatisation of the complex. CTL recorded sales of roughly $4.4 billion in 2014 with the promotion of local races at some $2.4 billion or 55 per cent with simulcasting foreign races accounting for the difference.
A successful bid from SVL would increase its hold on the gaming, lottery and sports betting industry. George however downplayed any perception of a monopoly as advancing an agenda.
“It sends a wrong message in a country that is trying to focus on being successful in business,” he said. “And for businessmen to be making that claim, I think it is very disingenuous.”