Activities of The Jockey Club
James L. Gagliano James L. Gagliano - Executive VP & Chief Administrative Officer, The Jockey Club.

James L. Gagliano: Thank you, Dinny, and good morning, ladies and gentlemen. The tradition of the Round Table Conference calls for me to provide you with a summary of the activities and achievements of The Jockey Club family of companies, which I will do today in brief.

For more detailed information about The Jockey Club, I would encourage you to go through and read the information we've included in the folders at your seat and to visit our websites when you have a chance.

Since 1894, the mission of The Jockey Club has been the same: We are dedicated to the improvement of Thoroughbred breeding and racing.

Through the years, we have continued to build upon our success and evolved to meet the pressing needs of the Thoroughbred sport. Whether through our leadership, our resources, or our technical know-how, we are constantly reinventing our companies for the advancement of breeding and racing.

A good example of adapting to the changing needs is found in our century-old registry where cutting-edge technologies, such as DNA-typing and online registration, have dramatically reshaped the way we conduct business.

First utilized with the 2001 foal crop, DNA-typing of foals gives us a modern tool that ensures accuracy of the pedigrees recorded in The American Stud Book, while providing excellent byproducts for customer service.

For example, we have identified a number of analytical tools that leverage the precision of the 342,000 identified DNA-types and allow us to quickly and easily resolve difficult questions of parentage.

Customer access to the Registry has also been greatly improved.

Interactive Registration - or IR, the online access to Registry applications - now touches approximately two-thirds of all Thoroughbreds registered, whether through naming, application or another process.

We continue to upgrade IR and are in the midst of a series of customer improvements that are building blocks toward our ultimate goal: providing breeders and owners with a same-day registration capability.

The Registry team is also responsible for monitoring trends in breeding - most importantly the state of the foal crop.

The production of Thoroughbreds has been stable since the 2002 MRLS decline. As we announced yesterday, we anticipate the foal crop of 2008 to remain identical to this year at 37,500.

In keeping with our commitment to improve the Thoroughbred breeding and racing industry, The Jockey Club has developed several commercial companies that support distinct industry markets through our information collection and technological expertise.

Equibase, the general partnership between the TRA (Thoroughbred Racing Associations) and The Jockey Club, is the Thoroughbred industry's official database for racing information and serves as an excellent example of reinvention and innovation.

At the start of this decade, attracted about 23,000 individual users per day. Now, that number is almost 100,000.

Within the past year, has been completely redesigned with improved navigation and product placements and has added about a dozen new features, including Euroform, a product that provides European format programs on American races; programs en Espanol; and products using the rich Trakus data, which we made available in packages for the Del Mar and Keeneland meets this past year

The addition of video links, which take the functionality of a past performance to a whole new dimension, have proved very popular with our fans. We project over the course of the next year 15,000 individuals will buy a video product on

These improved services, coupled with our strategy to diversify the overall product lines, have had a profound financial impact to the partners of Equibase. By the end of this year, Equibase will have paid out $21 million in dividends since 1998.

In addition, again this year the limited partners of Equibase will receive more money in dividends and workout reimbursements than they will pay in royalties for their use of Equibase data.

Our flagship company, The Jockey Club Information Systems, which services the data needs of owners, breeders, trainers, publications, sales companies and industry organizations through applications such as, has continued to innovate with upgrades to its pioneering Horse Farm Management software. Today, more than 500 farms and 150 trainers use our online programs to track detailed health and breeding records, manage bills and manage their businesses.

The Jockey Club Information Systems also collects about 67,000 international race results - the most in the world and a valuable service to North American wagering outlets - as they seek to import more and more international races.

Last year at this conference, I announced plans for a new business line for our company InCompass Solutions, which provides software solutions and services to racetracks. We have subsequently named this business line InCompass Financial Services, or IFS.

Modeled after online banking services that many of us use, IFS allows owners to view their account balances, print statements and transfer funds from their racetrack's horsemen's bookkeeper account to another track's bookkeeper account - or directly to their own personal bank account.

At $7.50 a transaction, IFS is far cheaper than standard wire transfers, and far more efficient - and definitely more timely - than a printed or mailed check.

Earlier this year, we completed software development of IFS and, after substantial testing, have focused our rollout in states such as New York, Kentucky and California, and we expect to add more locations and more states over the next couple of years.

Admittedly, the rollout of IFS has been time-consuming and a slow process - a process reminiscent to the members of the management team here at The Jockey Club of the early days of Equibase. However, we firmly believe IFS to be a forerunner of future Web-based products designed to meet the needs of horsemen and tracks, and we are appreciative of the support we have received thus far from those in the industry.

This past June, InCompass announced the acquisition of the racing office business from IMS of Billings, Montana.

Doug Haacke and Tom Tucker, the owners of IMS, developed an excellent reputation with racetracks for their innovative software and quality service. We look forward to our association with Doug and Tom and continuing to provide that same top-notch system to their racetracks.

We now have a very broad platform from which to deliver our innovative products, such as InCompass Financial Services.

The Jockey Club Technology Services, which was formed from an in-house department of The Jockey Club a few years ago, has now grown into a commercial-grade resource servicing both internal and external clients. It now consists of full-time staff of 50 technology professionals, including software developers specializing in racing and breeding data; engineers, including a full-time cyber security manager; analysts, including a certified disaster recovery specialist; and 24-by-7 technicians that operate our fully redundant network of 130 servers.

From this base of operations, The Jockey Club Technology Services continues to attract external clients seeking access to best practices and subject matter expertise. These include

  • the Daily Racing Form, our oldest and first external customer;
  • the TRPB, which, in conjunction with InCompass, last year began developing a series of data collection and analytical tools to detect suspicious patterns in racing and wagering; and
  • racetracks such as NYRA, for which The Jockey Club Technology Services has consulted on network configuration and Web products.

As part of our long-term strategic plan, The Jockey Club Technology Services will soon be implementing a research and development function that will seek out new technologies, such as mobile applications, microchip products, automated tracking and high-capacity networks, all for purposes of bringing these innovative technologies to our sport.

Before I close on the activities of The Jockey Club, I'd like to take a moment to speak about the charities of The Jockey Club, of which many of you actively support through direct donations and events.

In 2007, Grayson-Jockey Club Research Foundation is providing more than $1 million in grants for the first time - later today you will hear more about equine research.

The Jockey Club Foundation, which provides assistance to needy individuals throughout Thoroughbred racing, distributed $541,000 last year. Since 1985, the foundation has helped more than 1,000 individuals and their families.

Finally, a quick word about what we call industry initiatives. We are actively involved with and support many. Several will be addressed later at length.

It is our constant hope that our involvement in all of these activities will reinforce the fact that we are indeed "dedicated to the improvement of Thoroughbred breeding and racing."

Thank you for your time today and I hope you enjoy the rest of today's Round Table program.

Ogden Mills Phipps: Thank you, Jim.

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