Caymanas Park purse dispute exposes hard realities for Jamaican horse racing

Ministry Paper 89 of 2018, titled Caymanas Track Limited Annual Report for the year ended March 31, 2017, gives a clear picture of the weak position of the state-owned racing promoter shortly before divestment on March 6.

The report stated that “CTL recorded an operating deficit of $120.65 million, reflecting a deterioration of $73.22 million on the deficit of $47.43 million for 2015-16.” It also showed the company’s insolvency position, including “a net shareholders’ deficit of $669.97 million”, while cash at the end of the period stood at $20.58 million.

That financial backdrop was why then finance minister Audley Shaw described Paul Hoo, chairman of Supreme Ventures Limited, as “the bravest man in the room” when the divestment was announced to journalists at ATL Automotives’ showroom on Oxford Road.

The years that followed did not bring an immediate cure. Supreme Ventures Racing and Entertainment Limited, the SVL subsidiary that received the track under the deal signed by then finance minister Nigel Clarke, quickly added $100 million to purses. The sector had long absorbed similar increases, along with bookmakers’ rights fees, without solving the deeper problem.

That $100 million was soon gone. SVREL later recorded losses totalling $607.7 million over 22 months, with $355.6 million lost across 10 months in 2017 and another $252.1 million for the full 2018 period.

Since 2017, relations between SVREL and horsemen have remained tense. Some interests have pressed for purses to be calculated as a share of gross sales, but Clarke, while stepping into a May 2024 standoff, made clear that such an arrangement could not stand as a business model.

Two years have passed since Clarke asked racing stakeholders to come back with a practical structure that could serve all sides. In the meantime, the Thoroughbred Owners and Breeders Association of Jamaica, working with the late Don Wehby as mediator, examined several ways to connect purse levels to what owners spend. That approach would effectively treat racehorse ownership as a business, although that is not how the activity has traditionally operated.

Owning racehorses began mainly as recreation for people with enough spare income to afford it. Owners entered horses with the hope of earning the advertised prize money put up by the promoter.

Over time, however, racing has drawn in owners with more limited means, by their own choice, and that has helped change expectations. Some now argue that purse earnings should cover owners’ costs. Commercial breeding is different: stud farms operate as businesses by selling horses to owners, offering accommodation, providing stallion services, and caring for resident mares.

At the track, trainers work under contract for owners and rely on jockeys, exercise riders, grooms, and farriers to prepare and race the horses.

A government-owned CTL could rely on public funds to keep adding money, but SVREL cannot do the same, especially after last reporting accumulated losses of $400 million while trying to operate under a revenue structure that has not proved sustainable.

That type of arrangement is not the norm internationally. In North America, horse racing is heavily subsidised, supported in large part by tax concessions, state assistance, and laws linking the sport to the casino industry.

Those subsidies are intended to protect thousands of jobs and the wider racing economy, not to deliver windfalls to racecourse owners or operators.

In Jamaica, SVREL recently proposed buying Caymanas Park outright and pointed to a US$100 million development plan that it said would support purse subsidies. Rather than exploring the offer, or even considering a mixed structure similar to Florida’s model where casino licences are attached to racetracks through a combine, horsemen rejected the proposal outright.

Yet North America is often held up as the successful comparison when Jamaican purse levels are debated. The unresolved question is whether local racing interests can demand North American-style purses while refusing the subsidy framework that helps make them possible.