The latest development in the United States is that, after 95 years, the Jockey Club has deemed that the claiming system has failed the breeding industry. This has resulted in the closure of some racetracks with an existential lack of growth in the customer base.

For economic viability, there has been some consolidation by major players such as 1/ST(FIRST) formerly Stronach Group, New York Racing Association, and Churchill Downs Incorporated with plans for more rationalisation, has been the response. Globally, except where claiming exists, horse racing is holding its own in those gaming markets.

The unviability of the local racing product, and consequently the industry, commenced on January 17, 2023, when the local claiming system came on stream, ensuring that racing will be run in the interest of an elite minority. This writer, in a broadcast on the day, warned that the spectacular growth of the local racing industry would have been stymied by this uninformed decision of the then JRC Board.

From 29 race meetings in 1960, the CPL racing calendar peaked at 84 in 1992, at an average of 115 declarations per day, with 1,021 horses of 1,100 plus population competing in between 11 or 12 races on each race card. With the digital tote platform maximised, 1992 was the last significantly profitable year for CPL. By 1994, the unviability of the claiming system was already emerging, but with no response from the regulator or promoter, with stakeholders doubling down.

The claim by the architects of the claiming system that the handicap system racing product lacked integrity should have been rejected outright by the then JRC Board. Truth be told, the agitators and architects of claiming were conspiracy theorists.

These average thinkers’ agenda was to establish a tote monopoly to eliminate the bookmaking industry. This, although, through the Levy Scheme, the Consolidated Fund, and the breeding industry benefited immensely. For this writer, the failure of the claiming system was eminently predictable.

This claiming system proposal was therefore informed by rumours of race-fixing and other corrupt practices. The bookmaking industry flourished, with the “fixers” being the biggest losers. Even more consequential was the claim by the conspiracy theorists that the trading of race horses could be a viable economic activity but it only produced even bigger losers.

To accommodate claiming, the horse population was divided into 25 artificial categories, producing two immediate negative outcomes. Firstly, this reduced the average field size by at least 20 per cent with a corresponding decrease in sales turnover. Then, secondly, it was difficult for owners and trainers to comprehend this bizarre arrangement of the racing product, and more importantly, the punters as well.

Quantifiable underperformance of races as sales units over 32 years is estimated at $100 billion, at around $3.0 billion annually in current terms to operate with the claiming racing product. The expenses incurred by the owners to support the horse population have escalated exponentially in a vertical trajectory and now stand at a ratio of three to one in terms of returns in purse money.

Due to a lack of commensurate growth in the market, despite the increase in the country’s population over the last 32½ years by a third to 2.7 million, the decline continues unabated. In 2022, there were 855 races, but that fell to 755 in 2024, with 389 odds-on favourites, which explains in part the $385.8 million loss accumulated from 2020. Incidentally, at the end of September 2025, the 581 races had 259 odds-on favourites as inferior horses concede weight to superior ones in each race.

In addition to the ideal monopolistic market status, here are some of the strengths the claiming system product inherited from the handicap system in 1993 but has been unable to maximise the benefits. There were over 25 breeding sheds of note, including six major ones, listed as top earners in the JRC 1992 Year book. A strong cohort of over 800 owners, the majority with the requisite resources, 100 trainers, 70 jockeys, 400 grooms with the requisite skill set and experience, as well as a highly professional veterinary service.

On the regulatory side, the JRC and BG&LC functioned effectively to protect the integrity of the racing product and government revenue, respectively. On the commercial side, the four-year-old digital wagering platform was staffed by competent tellers at the track and in 67 OTB points of sale. CTL recorded profits from 1990 to 1992. By the way, during the effect of the breakout of equine influenza in the first quarter of 1990, the CTL Board was in a position to offer a stipend to the grooms most affected by the loss of earnings.

The surviving claiming system architects and supporters, as well as the stakeholders, should be required by the sitting JRC Board to furnish a rebuttal to, or an acknowledgement of the facts in this analysis. Or to rebutt whether or not it confirms the reason for the lack of profitability of the local racing product. As a career marketer, I can advise that businesses fail when products underperform in the market, and since 1993, the promotion of horse racing is a prime example.

Instead of an acknowledgement of the facts, the consensus amongst stakeholders is that the promoting company, SVREL, should possibly be under “Good Causes”, apportion a fixed percentage of the revenue from the simulcast to shore up the underperformance of the money-losing claiming system product.

The fact of the matter is that CPL, with the Government’s US$40 million, provided as a subsidy for 25 years from 1993, and SVREL for over eight and a half years from 2017. With the SVREL financial statements available publicly, it is up to the unconvinced stakeholders to prove a justification for their position.