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Sunday, May 27, 2007

A Capital Play Odyssey

- By the way, the prior entry was the 2,000th post on Left at the Gate. Patrick is going to be mad at me for not making a big deal about it; perhaps I would have if I'd remembered and if I was in the mood for profoundity on this hot and lazy holiday weekend.

Anyway, post 2001 will be about Capital Play Ltd. There was some debate here as to what exactly are their qualifications to run horse racing as opposed to merely taking bets on them. Their CEO Karl O'Farrell tried to counter a columnist's opinion that they're just an "Australian gambling-based group" in a letter to the Albany Times Union, but didn't provide any details. I had contacted a representative of the company for his response, and he replied that though Capital Play Ltd. (Australia) is an "international wagering company," Capital Play (New York) does in fact include executives with "extensive experience in race track management." Those gentlemen are all listed on their website here.

Chief Operating Officer Mark Owens was the Chief Executive of the Australian Capital Territory Racing Club in Canberra in the early 1990's. Operations Director Paul Brettell was CEO of Moonee Valley Racing Club, and, according to the bio:

..led numerous initiatives that were firsts in Australia, including installation of the new sand profile turf track, promoting night racing, securing a place for the BMW Cox Plate in the World Racing Series, selling sponsorship of the inside running rail which has been copied by all major clubs, growing wagering and non wagering revenue streams..
Jim Colquhoun was the Chairman of the Canberra Racetrack, and later Chairman of the ACT-TAB, the Aussie equivalent of NYC OTB. Legal council Andrew Goodell served in varying functions at the upstate harness track Vernon Downs, including as its CEO in 2002.

Capital Play also wants us to not disregard their experience as a bet-taker, pointing out that with 87% of their handle being generated in international markets, they feel that they can enhance New York's reputation around the world.

It seems fair to say then that they have endeavored to bring some race track management onto their New York team. And while I don't personally know enough about Australian racing to say how valuable the specific experience cited will be here, they may have more actual racetrack management experience on board right at this moment than does Excelsior, which plans to assemble their team when and if they're chosen.

Reading over their proposals, I'm again taken by how much emphasis they are putting on their strategy of reviving racing as a live sport in New York City; and I think you have to at least admire that idea. None of the other bidders would even dare to make specific predictions as to bigger average crowds, as Capital Play has done. Their bid projects that average daily attendance at Belmont will increase to 13,043 by the year 2012 from an estimated 8,012 in 2008; and don't ask me where they're getting those numbers from! They talk about extensive improvements "to make the tracks extremely attractive," integrating the VLT's into the racing part, week-long carnivals; promoting the facilities for corporate conventions and trade shows, and the restaurants for special guest chef days, wine and cheese tastings and fashion shows. During the Rifkin Committee hearings, O'Farrell spoke of giant banners on buildings and advertising in subways.

And of course, there's their master plan to attract single young women, "knowing that young men will follow." Yes, that's actually written into their promotional materials. They even have a woman named Betsy Berns, who "has worked with the NFL and various corporate sponsors to reach sport’s female fan base." This is where I'm reminded of the cultural differences we've discussed, and wonder whether their plans, as earnest and well-intended as they might seem (and yes, nearly 140 pages of their 267 page bid is a proposed condition book for every single racing day of the year), are viable in 21st century New York City.

Indeed, there are times where they show some disconnect. For one thing, I'm told by someone who works on the backstretch at Belmont that Capital Play is the only one of the challengers that has not come to tour the facilities (and more than once). For another, one passage on their website expresses dismay that:
The vast majority of [New Yorkers] surveyed had no knowledge whatsoever regarding Belmont Park or Aqueduct, never attended either racetrack, and had no intentions of ever attending the tracks, even though both tracks were located within the City!
But we know that Belmont is in fact a stone's throw over the city border in Nassau County, and that to most Manhattanites, both Elmont and Ozone Park might as well be somewhere in the ozone layer floating over the city. And it's in large part because of that geography that Capital Play's insistence that successful OTBs can help maintain a high level of interest in thoroughbred racing that ultimately leads to a higher level of attendance at the tracks is, in my opinion, a strategy better off abandoned. It's just the total opposite of what we've experienced here, and just because it's been "proven over and over again in Australia," doesn't mean it has a shot in this weird little corner of the universe.

And then, of course, there's the matter of their proposed takeout rates, which includes across the board increases in two-horse exotic wagers - as high as a 42% rate increase for exactas! As someone who bets a lot of exactas, that alone just about makes them a non-starter. (Though despite all the bidders' takeout proposals, isn't the rate ultimately determined by the legislature? Not that that's something to necessarily take comfort from, but it can be pointed out that the state's WPS and exotic rates are the lowest in the country.)

That's too bad, because even if I'm not convinced that their strategy to make Aqueduct and Belmont vibrantly trendy destinations would work, nor if they really have the personnel with the right experience to pull it off here, it's the type of thing about which I'd love to be proven just dead fucking wrong. They're certainly persistent and spunky if nothing else, and gained some substantial financial credibility in the form of real estate developer Stephen Ross, who has bought in to the tune of 20%. So, once left for dead by the Ad Hoc committee, it seems as if Capital Play is here to stay. Now, why don't they do something about those takeout rates, and show that they mean what they propose to do about the backstretch, and then maybe we can talk.

5 Comments:

Anonymous said...

Alan, Green Mtn Punter checking in again- congrats on your 2,000th post! Also I've noticed LATG linked on Ben Liebman's website more and more, another good sign that LATG is gaining street cred, especially from what I consider to be the NY racing industry's # 1 website. And thanks for your further info and comments on Capital Play- I think if there is one aspect of racing that most of us diehards can agree on it is the issue of increasing on track attendance. We just can't give up on our attempts to reverse the slide, and that is where we need new blood, new ideas, new perspectives from the NY racing franchisee. We diehards want to be sure we still have racetracks where live races are run in another 10 years.

Anonymous said...

Congrats on the milestone, truly noteworthy. Thanks for all of the entertainment and information, especially regarding the franchise situation.

This has become the "go to" site.
Keep up the good work.

Late Scratch said...

Were those 2000 consecutive posts or did you have an injury or were forced to sit out a post along the way? Hey, you should know that LATG has an esteemed place on my Links toolbar between Youbet and the Daily Racing Form.

As for Capital Play's latest, they do seem to be coming on strong at what seems to be the 11th hour. Their presentation last April was certainly snazzy enough with lots of video and cool graphics. One thing you won't find on their web-site or in their promotional materials is any mention of the relationship between Robbie Waterhouse and Mr. O'Farrell. Mr. Waterhouse, a bookmaker who once was a close business associate of O'Farrell's, was ruled off FOR LIFE after a race fixing scandal in 1984. The ban was lifted in 1998. You can look it up.

alan said...

Yeah, I recently came across this Robbie Waterhouse thing in doing some recent Googling on O'Farrell, and was planning to delve further into it. I was actually looking for some reference to bankruptcy after an anonymous poster wrote that O'Farrell had recently emerged from it.

And thanks everyone for the kind words!

Anonymous said...

There's no truth in the bankruptcy rumours - just some muck-raking by Capital Play's competitors who know that they are being beaten in terms of offering solutions for NY racing.

As for the Robbie Waterhouse thing, O'Farrell has no connection with Robbie and Robbie has absolutely no involvement with Capital Play. An Australian media beat-up who see Robbie as persona non-grata and want to tar everyone who has ever met him with the same brush. Robbie's warning off has been lifted, by the way, and he is fielding as a bookmaker on Sydney racetracks.