In my last column, I examined the importance of the 1975 establishment of the Jamaica Racing Commission and the 2011 Rudolph Muir Report, commissioned by the Ministry of Finance to recommend a pathway for the privatisation of the promotion of live horse racing.

Promulgated in March 2016, the government’s decision confirmed Supreme Ventures Limited (SVL) as the preferred bidder of two, for a Divestment Agreement to operate the Caymanas racing facility. This was operationalised effective 17 March 2017, after a subsidiary, Supreme Ventures Racing & Entertainment Limited (SVREL), was created to manage the infrastructure of the plant and market the racing product.

It must be said that, given the available resources in the local gaming environment, SVL/SVREL was the ideal entity to assume this undertaking. There were certain advantages, chief among them the capacity to nearly double the number of points of sale (OTBs), from 63 to 120, almost immediately. Other strengths included a monopolistic market with a 100 per cent cash revenue stream, a cohort of knowledgeable die-hard punters, competent tellers, professional trainers, jockeys, grooms, and other crucial support operatives such as veterinarians.

Additionally, there was seven-day-a-week simulcast wagering on races held outside Jamaica, and telephone accounts were operational and growing significantly because of the convenience offered to punters.

The 2012 and 2013 audited financial statements of Caymanas Track Limited (CTL), the operating promoting company, confirmed losses of $149.0 million and $98.0 million, respectively. Incidentally, for obvious reasons, the loss-making statements for the previous four years were not published. This magnitude of unprofitability triggered the necessity for the Muir privatisation report. By the way, the auditors questioned whether CTL was a “going concern”. In my view, it could not be, with a claiming system racing product model that predictably had to be subsidised from its inception in January 1993.

To keep CTL operational, the government’s cash injection subvention in 2013-14 amounted to $110 million, which was untenable in the view of the International Monetary Fund. All told, in preparation for divestment, $1.2 billion — including outstanding purse payments, tax liabilities, and redundancy payments for CTL staff — was an unavoidable debt write-off.

With the aforementioned advantages of SVL/SVREL, and without reference to why the racing product, delivered in a claiming system, had already failed in Trinidad & Tobago, and more importantly, the steady contraction of the breeding industry and consequent decline in the number of races year over year in the United States, the new promoting company was still satisfied to commit to certain expenditures. This was on the assumption that the gaming company’s superior management was enough to counteract the flawed racing product.

The standard legal agreement between the government as landlord and SVL/SVREL as tenant of the Caymanas facility was fine, with an initial 15-year lease arrangement including escape clauses and an option to renew at the appropriate time.

Now, a month shy of nine years on, it is time to examine what the Divestment Agreement entailed and the deliverables therein. It will also be interesting to see the findings of the Project Monitoring Committee tasked with overseeing and receiving quarterly reports on the progress made by SVREL.

In terms of timely capital outlay, there was an agreement to spend $500 million in tranches over five years to effect certain improvements to the 65-year-old infrastructure of the Caymanas compound: to make it customer-friendly in all respects, to make the racing product more marketable, to increase purses significantly, and to deliver a host of other commitments. The sum proposed was, however, bizarrely inadequate. Any objective assessment of this scenario would reach the same conclusion.

It was perhaps surprising to all, except this writer, that on 31 December 2024, the SVREL financial statement confirmed accumulated losses of $385 million, which increased to $400 million by March 31, 2025. To me, the explanation is simple. The claiming system is complex, the last thing a gaming product should be. Hence, there is insufficient growth in the market, and nearly 50 per cent of the races have odds-on betting favourites, discouraging wagering.

Still, the stakeholders, despite incontrovertible evidence, refuse to accept the data-based analyses of the flaws of claiming and should cease hounding SVL/SVREL for unaffordable purse increases. Horse racing must be conducted in the interest of the majority, but it cannot be in a claiming system. The product needs to change with immediate effect to at least arrest, and hopefully reverse, the decline of the industry.

Work being done on the racetrack.