Ogden Mills Phipps: Thank you, Maz, and thank you again for coming all the way from Japan to be with us today. Our next speaker, Brian Kavanagh is widely respected in international racing circles and we look forward to hearing from you.

Brian Kavanagh: It is a great honour to be able to speak at the Round Table Conference here at Saratoga. It is well known that it was an Irish immigrant John Morrissey from County Tipperary that first established a Racecourse here in Saratoga Springs 150 years ago. While John Morrissey was a colourful character, at one stage I believe he was the champion bare knuckle boxer in the United States, it is highly appropriate that it was Tipperary man who had the vision to first develop what is now one of the world's greatest racecourses.

As many of you may know, Tipperary is at the heart of the Irish bloodstock industry. The John Morrisey story does emphasize two points:. the Irish love affair with horse racing, and secondly, the contribution of Irish immigrants to American life.

American racing is followed closely in Ireland, and before I start my presentation, it would be wrong of me not to acknowledge the success of the Stuart Janney and Phipps Stable-owned by Orb in this year's Kentucky Derby. [Applause.]

In my presentation, I'd like to give you some background on the horse racing industry in Europe and Ireland in particular. And then focus on three major challenges that I see facing all of us at this time and consider how we might work together to address them. The European and Mediterranean Horseracing Federation was founded in Stockholm in 2010, and represents the racing authorities of 23 countries in the European and Mediterranean region. Just two weeks ago, Holland became our newest member.

The membership includes larger racing and breeding companies such as Great Britain, France and Ireland, as well as smaller developing countries such as Morocco, Hungary, and the Czech Republic.

Overall, this region accounts for 23% of the Thoroughbred foals born in the world, 20% of the races run in the world, and 27.5% of the betting on racing around the world. The region also staged 11 of the world's top 15 flat races in 2012 by way of the international handicappers rankings at the end of the year.

Our objective is to develop relations between the established racing authorities in the region, and to insure that the more developed countries provide support to emerging nations. We promote racing and seek to defend its integrity, and we also represent the interests of horse racing where necessary before the European Union bodies.

I'm pleased to report that there have been a number of positive developments in European racing last year. In particular, the French Funding model which we all envy so much, has been approved by the European Commission. While in Britain and Ireland, new media rights deals are being reflected in higher purses and more racecourse development. Racing is also showing signs of a resurgence in some countries with Spain and Switzerland recently having races upgraded to black type status.

Within Europe, the centre of Thoroughbred breeding is Ireland. And on the basis that a picture says a thousand words, I will show you a short video of the industry in my country.

(Video playing)

Ireland is a small country of 4.5 million people, and we have a climate and soil structure that is particularly suitable to the raising of young horses. As a result, Ireland has long been one of the biggest Thoroughbred producing nations in the world.

Our foal crop is roughly equivalent to the size of Kentucky. 7,546 foals last year. Given our relatively small size and population, this has led to an emphasis on exports and in 2012, Ireland exported over 4800 Thoroughbreds to 34 countries worldwide, for a total value of 175 million Euro. That is double the amount of horses exported annually from the United States.

Because of our high level of exports, Irish people are operating at a senior level in many of the stud farms, sales companies and racing organizations through the world. Nowhere is this more noticeable than here in America, and in particular, Kentucky.

The evolution of the Irish breeding industry in the last 25 years is fascinating, and whereas 25 years ago European breeders came to America to secure the best blood lines, the traffic is now in the opposite direction. Europe and in particular Ireland has become home to the best stallions in the world. However, if you look at the top Irish stallions and go back just two generations, you'll find most of them are based on American blood lines: Galileo, Danehill Dancer, See The Stars, Raven's Pass, Cape Cross, Invincible Spirit, and Holy Roman Emperor and Shamardal all have at least two American grandparents while Teofilo has four.

What does this say about our breeding industry? It tells me that bloodstock is a highly mobile commodity and any country that has developed or is developing a bloodstock industry should never become complacent about its situation. Fortunately, the Irish government has never been complacent and has historically taken a positive approach to the horse racing and breeding industries. It is one of a small number of sectors in which Ireland is a genuine world leader.

Irish trained horses won 131 races overseas last year, winning prize money of just under 19 million Euro. While an Irish based stallion has been the leading sire in Europe in each of the last 22 years. From a government's point of view, the industry ticks a lot of boxes and horses are a very positive image for our country.

Racing and breeding are environmentally friendly activities, export driven, labour intensive, particularly in rural areas and lead to a direct investment into our country. These are themes that we need to constantly reinforce, as too often racing is dismissed as the Sport of kings.

I'm pleased to say that we are now seeing an increase in the number of American investors choosing to race, breed, and buy horses in Ireland. American accents have become more familiar at our breeding stock and yearling sales and American owners are buying farms in Ireland. This is consistent with the mission statement of Horse Racing Ireland which is to develop and promote Ireland as a world centre of excellence for horse racing and breeding.

What can any investor expect? They can expect to be racing in a very competitive environment. If your horse is able to win a race in Ireland, it is likely to significantly increase its value for sale or breeding purposes.

In Ireland, we set out to offer a high quality, competitive race program, with a minimum of 10% races being black type races. That is a higher proportion to other countries. In the United States, the percentage is just 3.6%, but these races are closely monitored under the ground rules of the European Pattern Race Committee.

We also operate a minimum rating policy whereby horses rated below a certain level are not qualified to compete in certain races and must be removed from training. We also aim to offer a high level of prize money, and in 2012 the average purse offered for flat races was $26,500. The idea of these policies is to stimulate trade, encourage investment and support our breeding sector.

However, that is not to suggest that everything is perfect in European racing. It is not, and I would like to speak about three major challenges which I see facing our industry at this time. I believe these challenges apply equally to the United States as to Europe.

One, attracting and retaining racegoers. The first challenge is to find and influence potential racegoers and make racing relative and interesting to the general public. Ireland has a remarkably loyal group of racing fans. In all of our market surveys over the last ten years, over 1 in 5 people, 22% of the population have expressed an interest in racing. There is a 2 1 male to female bias, which is similar to other mainstream sports and the distribution is fairly even across age groups with the exception of the young, under 24, who are under represented, and the old, over 65 who are over represented.

I understand that an aging demographic is a concern for racing in the U.S., and as we saw from Maz's presentation in Japan.

Despite our loyal fan base, attendances in Ireland have been under pressure and fallen from a high of 1.5 million in 2007, to 1.25 million in 2012. This is mainly due to the terrible recession that has gripped our country. This has seen disposable income fall by 44% from their peak while racing attendances have fallen by 18%. As in other countries, the social appeal of racing adds to the dedicated racing crowds. And despite the concerns of some purists, this is a valuable asset that can make the difference between keeping a Racecourse in business.

Horse Racing Ireland runs national marketing campaigns to attract and retain racegoers with a mixture of national advertising, mainly in radio, press, and online. We also provide direct financial support and marketing services for racecourses. Our marketing campaigns work with a number of themes that we know will appeal to our audience history, tradition, great sporting contests, socialability, and authenticity.

Ogden Mills Phipps: Thank you, Brian. We appreciate you coming here. We appreciate your words of wisdom.