International commingling and increased technology opportunities were core points in the opening plenary session of the Asian Racing Conference (ARC) in Cape Town, South Africa, on Wednesday.
Mr. Winfried Engelbrecht-Bresges, the Hong Kong Jockey Club's (HKJC) Chief Executive Officer and Chairman of the Asian Racing Federation (ARF), delivered a presentation via video titled ‘Wagering and Digitalisation - Current trends and Innovations in Global Pools and Wagering’, and apologised for his absence due to the coronavirus situation in Hong Kong.
He welcomed the growth of racing as a truly global sport and outlined a vision in which the historic first World Pool staged at Royal Ascot in 2019 will yield further growth of international commingling which, in turn, will lead to expanded wagering opportunities including a global racing bet yielding potential Lottery-like returns.
“I believe international commingling will be key for future development of racing as a global sport and through this concept we have the chance to really harvest the potential of our international racing,” he said.
Mr. Engelbrecht-Bresges pointed to the globetrotting exploits of star horses and riders in recent years as a means of illustrating racing's increasingly cosmopolitan attraction: “If you look at a horse like Deirdre. She was a perfect example of the globalisation of racing in 2019, travelling from Japan to Dubai then on to Hong Kong, England and Ireland then back to Hong Kong to participate in eight international Group races in five different countries. Another amazing example is Ryan Moore, who recently racked up over 25,000km in the air across three continents to ride in G1 races in America, Hong Kong and South Africa in the space of a week.”
Mr. Engelbrecht-Bresges revealed that international commingling now accounts for between US$15 billion to US$17 billion in annual global turnover - equating to between 15 and 20 per cent of total global turnover on racing - and stressed that strong international pools play a vital role in fighting illegal bookmakers and helping customers in smaller jurisdictions to access and benefit from far greater pool size and liquidity.
He added that it is essential to strengthen the protocols that govern commingling to match the best practice of stock exchanges in order to combat money laundering and pointed to the remarkable success of commingling in Hong Kong and the launch of the historic World Pool at Ascot last summer as examples of how enhanced international links can lead to significant growth.
“The commingling development in Hong Kong is an astonishing success and we are seeing in the 2019-2020 season that it has gone up to around 20 per cent of turnover,” he said. “Riding on that success, with our partners at Ascot and Totepool, we created a new dimension to commingling with the first global pool at Royal Ascot which enabled people around the world to make use of huge liquidity and led to a 60 per cent increase in turnover.”
Discussions are taking place to launch a world pool based on racing in Dubai, with particular emphasis on the Dubai World Cup meeting, and Mr. Engelbrecht-Bresges highlighted “a unique opportunity with a new protocol to expand offerings on Exotic bets and create interesting value propositions for customers.”
One such proposition involves a long-discussed global bet which could finally come to fruition thanks to the march of technology and the significant growth in liquidity brought by an expansion of World Pools.
Mr. Engelbrecht-Bresges continued: “With new protocols available we can create a racing bet type that is attractive to customers who look for higher returns - and even Lottery-like returns - while retaining the skill-based differentiation which is important in racing.”
He noted that increasing the number of participating countries is key to further growth, and identified high wagering turnover nations such as Japan and Korea as suitable partners for the next phase.
“I personally believe, and it is a little bit of my dream, that Japan could be the strategic partner to take commingling to the next level,” Mr. Engelbrecht-Bresges said.
“If you look at the quality of Japanese racing and its world class horses - along with races like the Japan Cup and Arima Kinen with around US$600 million in liquidity - this would be an amazing value proposition and would definitely create another dimension in commingling.”
Mr. George Irvine, the Hong Kong Jockey Club’s Commingling Development Director, also addressed delegates to discuss the next generation of commingling protocol. He outlined how the Club now has 61 commingling partners from 27 jurisdictions generating annual turnover of HK$20 billion.
Earlier in the session, Mr. Richard Cheung, the Hong Kong Jockey Club's Executive Director, Customer and International Business Development, spoke to the convocation via a video presentation, in which he gave an update on the Club's latest Digital Transformation Opportunities and identified 5G, Artificial Intelligence (AI) and the Internet of Things (IoT) as three key areas of development that must be embraced to advance effective positive changes in the customer experience.
“In the last few years at ARC we have talked about how mobile technology is going to change the racing betting landscape but, going forward, we believe there are three exciting opportunities,” he said. “5G will enable greater speed, lower latency and a greater number of connected devices, and we need to think about how we use AI for personalisation and the Internet of Things to datafy the physical world.”
Mr. Cheung also outlined how the Hong Kong Jockey Club is continuing to digitise each customer's personal 7-step Wagering Customer Journey and how 5G and AI could help create a planned Super Equine App to revolutionise the way owners, trainers and racing fans engage with horses.
The time to open an HKJC betting account and transfer funds will reduce to four to five minutes by 2021; a facility for customers to input personal notes will enable AI to generate alerts for future wagering; speech recognition to generate betting tickets will be introduced by 2022; an AI recommendation engine similar to those used by Netflix and Amazon will supply data on upcoming events; and plans to adapt China's Little Red Book platform - with over 200 million registered users - will incorporate social community features similar to those used in e-Sports betting apps.