Ogden Mills Phipps: Our next speaker is making a return visit to the Round Table after 18 years. Racing in Japan was undergoing many changes at that time, and Maz Goto is going to update us on the JRA's marketing and drug control practices.

Masayuki Goto: Thank you, Mr. Chairman, for that kind introduction and extra effort for the handsome picture. I wasn't too bad, don't you think? Good morning, ladies and gentlemen. I had the privilege of presenting to you before at this conference in 1995. Thank you very much for inviting me back to Saratoga Springs. It is nice to see everyone and see your faces once again.

Eighteen years ago, I spoke on the progress of racing in Japan over the last 20 years. I remember that I was so proud of JRA's rapid growth and spoke on the marketing strategies. It comes back to me like it was yesterday. Now as you can see on the screen, JRA's annual turnover about $40 billion U.S. dollars in 1997, however, after 15 years in 2012, it has shrunk from 40% to about $24 billion dollars. The number of foals dropping equally from 8600 to 6800.

So, I'd like to tell you what transpired in JRA Racing since I left 18 years ago. First of all, I'd like to show you a day at the races on the 80th running of the Japanese Derby at Tokyo Racecourse in May.

(Video playing)

That was good, wasn't it? About 140,000 racing fans filled Tokyo Racecourse. Turnover of the Japanese Derby alone was about $237 million dollars. Over 56% was bet through internet and telephone betting. More racing fans are choosing the convenience of placing a bet without cash, broadening the wagering options for the racing fans is becoming very important.

How user friendly and smoothly racing information can be delivered to internet users is also a key. We publish real-time odds of every bet type and combination on our website. We try to provide as much data as possible on the horses and the people to aid racing fans. Also, we arrange "free to air" TV programs for all afternoon races. It takes a considerable budget, but we feel it is necessary.

Cooperation from the owner, breeder, trainer, and jockey is indispensable. That is why we need a sound structure to return the money earned back into racing. It is especially important that it is tangible to the racing fans.

Capital improvements such as creating enjoyable and pleasant racing facilities, upgrading betting infrastructure, even promotion and events will not only benefit racing fans, we feel that they will benefit racing.

Next, I would like to speak a little about our marketing and promotional activities. This is an overview of the JRA fan base. We have been conducting an annual survey since 1988. It is a fixed point survey and we also visit households at random. We collect over 5,000 samples each year. It is a great tool to better understand how racing fans are feeling about racing, and to plan our marketing and promotional activities.

The overall average age is 54 years old. It gets younger on the Grade One race days. However, the average age at OTB, fan base almost reaches the Japanese retirement age of 60 years old, same as me. The average age of our fan base in 1990 was 43, so you could say that we have very loyal fan base or we are getting older together.

Let's take a look at the Japanese adult population. There are about 96 million adults in Japan, of which, we found out that 22% have had some contact with racing. Out of this 21 million people, 28% still take part in racing. This counts for 6.1% of the entire adult population. Out of this 5.9 million customer base, 80% have answered that they intend to continue participating in racing. Therefore, if this same trend were to continue, our fan base is expected to shrink from 6.1 to 4.8. I believe a similar report was made by The Jockey Club from the McKinsey Report.

This survey also gives us the following data: There are about 15 million sleeping racing fans. 24% have indicated their willing to come back to racing. Furthermore, 2.8% of people who have never encountered racing in their life said they may try, so, between the continuing racing fans, returning racing fans and the new racing fans, the possible fan base could add up to over 10 million people. This is about 10.7% of the entire Japanese adult population. That's a big fish to catch.

So, how can we persuade them to come to the racecourse? Our survey said one of the keys to approaching sleeping and new racing fans is to create opportunities for them to attend races with someone who knows racing. I would like to show you a few commercial films taking in these ideas.

(Video playing)

We conduct various promotions targeting both young and old, and we were able to increase the ratio of racing fans in their 20s by 1.6% in 2012. Next, I'd like to explain to you about our medication rules and measures taken to uphold integrity in racing.

I believe aside from the thrill of winning a bet, one of the great things about racing is it is an event that features such majestic creatures as horses. And I also think fans are attracted to the pureness of the sport and its international image. To this end, Article 6 of the International Agreement of the International Federation of Horse Racing Authorities, plays a very important part in Anti Doping policy.

It is intended to control the use of substances capable of giving a horse an advantage or being disadvantaged in the race. We feel that providing a "level playing field" is the key in any sport to upholding integrity.

I will show you the transition of drug control in Japan. JRA Rules of Racing are linked to the Horse Racing Law in Japan. Offenders of the drug rules and subject to Criminal Code as well as JRA Rules of Racing. Therefore, unlike the International Agreement, prohibited substances must be listed and the withdrawal period is set at 10 days across the board.

Also the process to update the list requires approval from the Ministry of Agriculture, which can be time consuming.

Since 2007, we introduced a new category called restricted substances. It is a new scheme to control drugs as a house rule. It is intended to control so called painkillers. We can set our own detection times and suggested withdrawal period.

This is an overview of JRA drug control. By combining frameworks for prohibited and restricted drugs and by controlling horses stabled at our training centers, we are working our way to operate drug control as closely as possible to the IFHA Article 6.

Regarding anabolic steroids, Japan takes the position to ban them completely from the racing industry. We know from the recent scandals in the U.K. that it damages racing and racing authorities must act strongly and quickly to clean it out from the field. The Asian countries are working to unify their policies and the IFHA is moving forward for strict control.

What we aim for and feel is most important is to be transparent. So that we can gain understanding from our racing fans and make them feel secure about taking part in our races.

I would like to take this opportunity to explain the governance policy of the JRA. A horseracing law amendment in 2007 created the highest governing body of the JRA called The Board of Governors. It consists of mostly outside individuals. The Board of Governors is chaired by Mr. Okuda, former chairman of Toyota Motor Corporation. They approve the JRA's management policy and assess achievements of JRA board members like myself.

A translation of the Fundamental Governance Policy of the JRA is JRA will keep running. What this is intended to show is our will to conduct safe and sound racing every week and to carry our racing forward. Under this theme, the governance policy lists five keywords to which JRA racing should be attached. They are, with customers, with thrill and emotion, with trust, with community, to the future. We conduct our racing under these principles.

I said exactly the same 18 years ago in this auditorium. It is JRA's strong belief that racing can exist precisely because of the racing fans. This has not changed since and will not change. We feel that proper medication regulations and integrity measures are the key to winning better public perception for Thoroughbred racing.

On the afternoon of the 11th of March 2011, a terrifying disaster swept the northeastern shore of Japan. It devastated my country. Racing was suspended and the Fukushima Racecourse was badly damaged. We were able to resume races at Fukushima Racecourse after one year, and we were able to raise about $54 US dollars from a percentage of our turnover and charitable contributions.

We are very thankful for the precious donations from our American friends. I realized again, at that time, it is our duty to carry this wonderful sport on to the next generation.

Racing is dear to my heart. I love the excitement of betting on the sport. Thoroughbred racing has international dimensions and it is marvelous entertainment.

Racing needs cooperation and understanding from its stakeholders, and we know domestic issues must be given priority in any country. That said, we as racing organizers must work together to put in place structure and rules that will best serve racing. Beyond the borders and to the future of Thoroughbred racing.

I would like, if I may to end on a personal note 18 years ago. I shared with you that my father before me also worked with the JRA as a veterinarian. And when I was in elementary school, other boys would look down on me a little when they found out my father was working in racing. Racing back then was not quite an occupation that was approved of. It was what you call “shady.”

I also said that racing had become a business that our sons and daughters no longer had to apologize for their appearance walking in. And through all my years with the JRA, it had to be my ambition, determination, and goal for racing to become organized and accepted as a beautiful and exciting sport, and above all, an honest and enjoyable one.

I believe that today it is still important to avoid the complacency so that racing can continue to be perceived of as an upstanding industry. Because, as we all know, the enemy of horseracing never sleeps. Thank you.