IN March 2017 Supreme Ventures Limited (SVL) operationally became the successful bidder for the International Monetary Fund-dictated divestment of the promotion of live horse racing in Jamaica, replacing the Government-owned Caymanas Track Ltd (CTL). The focus of the Government and the investors was on the monopolistic horse racing product in the gaming market, and everyone thought profitability was guaranteed for the new promoters.

Through their subsidiary Supreme Ventures Racing & Entertainment Limited (SVREL), SVL assumed the responsibility to actualise the deliverables in the divestment agreement, seemingly unaware of the inherent challenges — chief of which is a hopelessly flawed claiming system racing product that presents an existential threat to the potential, and therefore actual viability, of the operations of the Caymanas horse racing plant.

Why is it that a racing product based on a handicap system grew at an average of 10 per cent annually, or cumulatively 300 per cent in three decades prior, but with a change to the American claiming system model in 1992 it has had a negative growth pattern, leading to bankruptcy by 2016?

Here is another question, and this is for the stakeholders: Why is it that the US Jockey Club has implemented a rating system for the classification of its horse population — which is effectively a handicapping exercise — and this whilst the cult-like, profit-blind affinity to the failed claiming system culture is still so totally pervasive here in Jamaica?

By 2016 CTL had required US$40 million in Government subsidies, including $1.2 billion in tax write-offs, to remain operational. When inflation is taken into consideration, in the absence of Government inputnfrom 2017 the owners have had to increase their financial outlay significantly for the privilege of enjoying their sport/hobby.

For SVL, it is now eight years and nine months on and this gaming entity has not had the benefit of a due diligence exercise to determine the real economic viability of the racing industry. Truth be told, SVL is intentionally forced to operate with an underperforming racing product whilst being hounded continuously by the stakeholders to increase purses.

The revenue projections have not exceeded the vertically moving operating expenses of delivering the racing product in the failed claiming system format for nearly 33 years. With the relevant data available, as owners of the racing product it is the stakeholders who should undertake the due diligence exercise instead of claiming an unsigned entitlement to the simulcast and the fixed-odds revenue streams.

The fact of the matter is that the stakeholders are simply acting as if they do not understand the commercial side of the successful promotion of horse racing. The stakeholders must accept that to be demanding purse increases with a money-losing claiming system racing product which discourages wagering is unlikely to become a reality.

Due to the inherently incomprehensible and complicated nature of this racing product the customer base has been stagnant, with horse racing declining from its mass appeal to an unviable niche market status. Handicap racing is flourishing wherever it exists.

As I have been positing from 1992, claiming tags are not necessarily the main source of the problem; it has been due more to the artificial or non-genuine classification of the horse population into 25 categories, increased from seven, ensuring reduced field sizes. Further, inferior horses concede weight to superior ones, at advantageous scales of weights, in over 90 per cent of the races projected.

Punters are aware of the importance of handicapping, and wager a lot less with the hundreds of perceived “bankers” available annually. The SVREL’s 2229 races in the first three years of operation had 1095 odds-on favourites, with the same ratio each year — culminating with the 755 races in 2024 having 389 short-priced favourites — hurting profitability and continuingthe established, near-33-year money-losing pattern.

The responses to a questionnaire published recently here are prime examples confirming a knowledge deficit. For example, there is no general understanding that SVREL offers two types of wagers — place is onlynone, and win has 13 options.Simply put, if a bet is not for place, then it is for win, irrespective of the description of the exotic wagers. This is why odds-on favourites do such serious damage to profitability.

As a factual matter, the claiming system racing product comfortably meets the criteria for a failed marketing model in all respects. The upshot of operating with this weak racing product is an SVREL Financial Statement with a $385-million plus loss accumulated by December 31, 2024.