Ogden Mills Phipps: Thank you, Ryan. Two years ago, the McKinsey team told us a great deal of how our sport was perceived in the marketplace. We wanted to see how those perspectives have changed, or if she had changed in the wake of recent medication reforms.

We asked Rob Green who did some of the original poling to conduct that research. He and his colleagues at PSB in Washington have done that over the past two weeks. The survey involves not only casual fans, but also some of our industry's largest bettors. This is an important group of fans. First hand feedback from these people who knew our sport well and wager large amounts of money is invaluable. Rob ...

Robert Green: Chairman Phipps, members of The Jockey Club and guests, it's an honor to speak with you today. Thoroughbred racing has been an important part of my work for some years. I've conducted studies on behalf of horse racing interests since 1999, studies concerning new products, expansion of gaming in certain states as well as sustainability issues and concerns in more recent years in my work with McKinsey.

On behalf of The Jockey Club we recently conducted a survey of 816 committed bettors and a study of 804 fans and potential fans. Today I will share key highlights from that study.

Let me say I've conducted surveys for various types of corporate, political and advocacy clients, and it has been very rare in my experience to see such undisputed commitment to change and reform as we see among bettors in this analysis.

We interviewed committed bettors about problems facing horse racing, including drug and integrity concerns. After exploring those issues thoroughly, we asked them about specific drug and integrity of the sport reforms.

This survey demonstrates that drug and integrity issues shape the way that horse racing is viewed, and they lead horse players to bet less. Drug issues are not just about leveling the playing field, achieving international consistency or cooperation, and they're not just about improving equine welfare, as important as those issues are. Drug and integrity concerns directly damage the economics of the sport.

The data you're going to see in this presentation comes primarily from the survey of 816 committed bettors, that includes 98 big bettors, essentially big bettors and whales. This data the sampling of margin of error is 3.5. We surveyed 403 current horse racing fans, as well as 401 potential fans. The results are statistically significant. It's a unique study. Nothing like it ever seems to have been done.

The bettors that we contacted were enthusiastic in their response. At this point I'd like to thank both Jeff Platt of HANA, as well as Jerry Brown of Thoro Graph, for making it possible to conduct this survey with the right people. It would not have been possible otherwise.

To give you an idea of the level of enthusiasm, our response rate on this study was 4 to 5 times higher on average than typical opt in research. I've never really seen anything like this. As I was saying, we asked bettors about the most important issues facing Thoroughbred horse racing, drugs, integrity issues, takeout rates, the image of the sport, facilities, leadership.

As the graph illustrates, bettors see a pressing need to address drugs, integrity, takeout, and leadership issues, that's why we boxed those four that you can see on screen.

When we asked bettors how important these issues were for horse racing to address, these four issues leapt out. 69% say drugs are very important. 66% say integrity and corruption are very important issues. 63% say that takeout rates are very important. 62% say no leadership or the leadership void.

Those are the key issues. That is from them right at the beginning of the survey.

When we breakout the biggest bettors, those who bet more than $10,000 a month, we learned that an overwhelming 80%, four out of five big bettors say that drugs as well as takeout rates are the most important problems for the industry to address. We also learned that these issues don't just affect the way that bettors and fans view horse racing as a sport.

They also affect the way they wager on races. Almost eight in ten bettors, 79% considered illegal drug use when they're betting at certain tracks and states. Further, 76% of bettors avoid betting at some tracks and in some states. Three in four or 75% of bettors in the United States say that trainers show different form at different tracks.

Three out of four, the suspicious majority, they might be called, the three out of four of committed bettors who bet less rather than more because of their suspicions. Among this suspicious majority, as I said earlier, 3 and 4, 54% will bet less, only 6% more. That is a 9 1 margin. The pattern is the same for big bettors.

When we drilled down, we saw that many say they have to accept short odds on the juiced horse or lose the bet to a “super trainer.” By the same token, and this is looking at the responses from all bettors and in greater detail, we learned that bettors have every type and description. Told us they changed their strategy to bet less often in smaller fields, and stay away from more obscure tracks.

Many bettors say they account for trainer win rates or suspected illegal drug use as part of their handicapping.

Bettors want a level playing field with uniform medication rules across all states. This was a very strong conclusion from this study. This is the bettor audience to the uniform medication rule discussion, especially the largest bettors. Fully 65% of bettors have heard about efforts to institute uniform medication rules across all racing states. That is the 25% and 40% you see on the left side of the screen. Overwhelmingly, 86% of bettors strongly support uniform medication rules.

Bettors are tired of waiting. 91% want uniform medication rules to happen faster than they're happening now.

We also asked bettors about a variety of proposed reforms to address drug and integrity issues. In fact, we looked at ten altogether. Every drug and integrity reform we tested, all ten were highly popular with bettors. None of the reforms that we tested enjoyed less than the support of two and three committed bettors. Among big bettors, the most strongly supported reforms are publishing all drug test results with all drug levels included in the reports as a way to demonstrate the sport is clean.

This is strongly supported, strongly supported, that's hot button, top box, strongly supported by 82% of big bettors. Implementing more out of competition testing for performance enhancing drugs, strongly supported by 79% of big bettors, and longer suspensions for trainers that have horses with illicit substances, strongly supported by 75% of big bettors.

Bettors want more transparency also, with 73% who strongly support disclosure of attending veterinarians. These are among the ten reform rules we tested. Bettors also want to see stronger punishment. 65% of big bettors strongly support new, massive fines for trainers. And an identical 65% of bettors strongly support the notion of three strikes and you're out as a policy for drug testing, where a trainer that's acquired three significant drug suspensions would be banned from racing.

Three strikes also sends a very strong signal, like pushing a reset button, to current and potential fans. For example, 44% of potential race horsing fans say they would trust the integrity of horse racing much more with the three strikes and you're out policy. So this would be key with people who are casual fans of the sport.

In closing, please let me note that the drug and integrity issues that I talked about today based on the findings from this poll of survey of bettors across the United States, let me stress that drug and integrity issues aren't just a threat at the finish line, they're also a threat to the bottom line. Your bettors are frustrated with drug and integrity concerns, and they're ready for reform. Thank you for this opportunity to share these findings.