TeleTrak Aims to Revolutionize Horse Racing for the Internet

TeleTrak, the Australian company that just broke ground on its first straight-track racing center, is dreaming big dreams for the horse racing industry. The company has already spent five years developing its plan and convincing government officials of its viability.

While administrating the plan, TeleTrak put together a wish list of how to correct all the "wrongs in racing", according to John Hodgman, the company's communications director. They have addressed every aspect of the racing industry in competitive terms, he said, and have come up with a few solutions, such as awarding prizes to all horses competing in a race. (The minimum purse will be $50,000.)

Horses might appreciate the change to a straight track. According to TeleTrak, several veterinary experts have lauded the straight-line concept, arguing that four-legged animals are not built to run around turns and that a straight track reduces the number of leg injuries among horses.

Still, the company faces stiff opposition from the thoroughbred industry. Hodgman acknowledges the concerns. "Anything that might erode 150 years of tradition, they (the thoroughbred racing industry members) would react (to) very strongly," he consented. "Their activities are very important to the (thoroughbred racing) industry." But according to Hodgman, the industry need not worry because TeleTrak won't be a direct competitor of traditional thoroughbred races. "We designed our racing time for evenings, when they can't race," he said.

In fact, TeleTrak's business model promotes "proprietary racing" as inevitable. The company notes that with the exception of club-based racing (such as that in Australia), all other forms of gambling product management are conducted by corporations or governments.

The straight-line tracks aren't coming cheaply (reportedly costing as much as $80 million), requiring an infusion of capital. The company offered a public float to garner a reported $20 million to complete the project. The tender, which closed at the end of September, was conducted through PriceWaterhouseCoopers. The bulk of the tenders came from companies in Canada, plus one in Mexico and two tenders came from U.S. companies. At this time, no deals had been struck and Hodgman wouldn't name any potential investors. He said that the tenders included offers for up to 80 percent of the company.

TeleTrak wants to have ten racing centers in the southern hemisphere. According to Hodgman, the company expects to begin construction on centers in South Africa and New Zealand within a year. Of the ten centers, seven are planned for Australia. That will give them a 2,100 annual race capacity. In comparison, TeleTrak quotes AJC Thoroughbred Racing Statistics that show 400 spectator-based thoroughbred racecourses offer a combined total of 3,335 meeting annually.

TeleTrak is developing racing centers that will offer three types of racetracks and will eventually run seven thoroughbred, three harness and two greyhound races weekly. Hodgman admitted that it would take time to build up to this amount of weekly racing, figuring that "it takes about a year to get everything together."

Work has already begun on the Waikerie thoroughbred track and a greyhound track is in development, too. In about six months, the company intends to break ground on a harness track at their Port Augusta location. "We hoping to open the thoroughbred and harness tracks at the same time. The second track at Waikerie for greyhounds will probably open then, too," Hodgman said. Eventually, both locations will offer all three types of racing.

"Our thoroughbred tracks are 2000 meters long, 90 meters wide with moveable rails. We keep moving the rails to make a clean field every night. This gives us the capacity for 360 races a year on separate surfaces," said Hodgman. He added, "Our capacity is extraordinary in comparison to spectator based oval tracks."

TeleTrak's straight-line track will also offer unparalleled visual quality. With the straight track comes the opportunity to film racing up close using overhead cameras on high-speed rails. "We're really a television production company," Hodgman explained. As such, film of the races will be copyrighted by TeleTrak and will be shown to subscribers who log onto one of their two sites, www.teletrak.com or www.e-teletrak.com.

Hodgman claims that "there is a direct correlation between the quality of information, including the visual signal, and the quality of wagering sales." As proof, he cites the 17 percent increase in wagers when Australian races were first televised. TeleTrak suggests that a penetration of just 1 percent of the Internet gambling market could net a $180 million annual after-race profit.

"All bets accessed through the TeleTrak web site by registered subscribers will have [to] go directly to those betting agencies who have entered agreements with TeleTrak to pay it commissions on all wagers sales generated. The betting agencies themselves may be situated in various locations throughout the world," Hodgman said.

Hodgman told IGN in a previous article that the company is negotiating with a number of sportsbooks for wagering opportunities, although he wouldn't name any of the agencies with which it is negotiating. He stressed, however, that the company won't broadcast races to U.S. viewers or acceopt wagers from U.S. bettors.

Some news articles indicated that TeleTrak was giving consideration to preventing South Australians opportunity to wager on the races.

"We're capable of doing it, but we're not volunteering to do it," he responded, adding, "If the South Australian government required it, we could file a $10 million suit for anti-competitive activities, according to what our lawyers have told us." He doubted that the issue would ever come up, though.

The company related the following information about planned sites:

Fiji The Fijian Government Trade & Investment Board, with concurrence of all relevant government instrumentalities, has given conditional approval for the establishment of a TeleTrak Straightline Racing Centre in that country. Current planning involves the conduct of races over a six month season in each year.
South Africa Preliminary discussion have been held in South Africa to determine if it would be a suitable and practical location for a TeleTrak Racing Centre.
New Zealand A company, Straightline Productions Ltd., has been incorporated by local business people in the Christchurch area. A licensing agreement has been exchanged between that company and TeleTrak International Ltd.
Straightline Productions Ltd. is seeking government approval to establish a TeleTrak Racing Centre at Ashburton, in New Zealand's South Island.
Australia Each Australian state has varying legislation in respect to the conduct of race meetings. In many instances Acts that have served spectator-based racing for decades have been framed and enacted before cyberspace was invented.
Considerable work has been undertaken in regard to both local and state governments to ascertain legality and/or government consents.
Victoria Without legislative amendment the conduct of TeleTrak racing in Victoria is illegal.
New South Wales The company has a legal opinion from a leading QC, well qualified in respect to the racing industry in NSW, to the effect that there is no conflict with, or impediment, to commencement of TeleTrak Racing Centres in NSW, however, government attitudes are currently a sufficient impediment to establishing in that state.
Tasmania In April 1996 the Tasmanian Liberal Coalition Cabinet approved amendments to the State's Racing Act to allow the introduction of proprietary racing in that State. The government was not able to obtain the agreement of its coalition partners to proceed the matter.
In February 1997, the then opposition Labor party publicly claimed that if they were elected to office they would immediately amend the Act to allow TeleTrak proprietary racing. They were elected to office in December 1998.
South Australia In South Australia there is no legislative impediment to TeleTrak's commencement of its racing formats provided that neither horses, nor licensed personnel, competing in existing racing, participate in any TeleTrak events.
The state government has granted Development Act Consent for construction of a TeleTrak Straightline Racing Centre at Waikerie in the state's northeast, two hours drive from the state's capital city of Adelaide. On 12 December 1998 required local government building approvals were also granted with state government consent.
Together with local government agreements in Port August, in the west of the state, and at Millicent, in the southeast, a total of three locations with suitable land have been identified, and conditional purchase options have been exchanged.
On 3 August 1999, the South Australian Minister for Racing, the Honorable Iain Evans MP, with Cabinet approval announced to the Parliament that there was no legislative impediment to proprietary racing, that his government would not amend legislation to prohibit it, and that his government would introduce a licensing regime to provide security of tenure for investors and to ensure maintenance of probity levels for the conduct of a betting related business activity.

As far as dreams go, TeleTrak's is as expensive, expansive and imaginative as they come. The coming year will likely reveal whether the company's plan is of the revolutionary caliber of Wilbur and Orville Wright's historic first flight or if the company proves to be more like the Man of La Mancha, tilting at windmills.