ECONOMICS OF THE AMERICAN JOCKEY CLUB 140-MARE LIMIT by ROBERT L. LOSEY, PH.D.

On May 7, 2020, the Jockey Club issued a rule limiting stallions under its jurisdiction born after 2019 to breeding a maximum of 140 mares annually in North America.  The limits placed on mares bred for stallions born 2020 and later put them at a financial disadvantage relative to stallions born before 2020 and will lead to at least four significant changes in the economics of stallion markets.

  • Very popular stallion prospects born in the United States after 2019 will be worth less in North America.
  • Very popular new stallions will be increasingly likely to be exported or shuttled.
  • Potential stallion prospects born before 2020 and young stallions now at stud are now worth more.
  • Upper-end stallion seasons prices will trend higher starting in mid-decade.  Mid-level stallion seasons will trend upward to a lesser extent.

Before and After Stallions

While stallions born before 2020 will face no limits on mares bred, U.S. stallions born after 2019 will be limited to 140 mares throughout their careers.  An extremely popular stallion born in 2020 that is retired to stud in mid-decade may have bred 252 mares (as Triple Crown champion Justify did in 2019) in the absence of the 140-mare limit, but will find that 112 mares he might have previously bred will be displaced to other stallions.  That future version of Justify will logically command a higher stud fee in light of the Jockey club limit on mares bred, but the lower number of mares bred will cause a decline in his breeding revenues. 

The 112 mares redirected to other stallions from future stallions like Justify born after 2019 will increase demand for other stallions.  The increased demand will be absorbed by multiple replacement stallions, and will initially result in very modest, perhaps even no perceptible increases in posted prices for replacement stallions.  But each passing year will find more new stallions subject to the 140-limit being retired, and the rising demand for alternative stallions generated by the increasing number of displaced mares will cause prices of stallion seasons to rise, most especially for elite stallions.  By 2040, stallion season prices at the upper levels will be higher than they otherwise would have been by 20% or so, with mid-level season prices rising relative to where prices would have been absent a limit on mares bred.

More Exported and Shuttle Stallions

Popular new stallions subject to the 140 limit that appeal to European and Japanese markets will be more likely to be in play for export.  Being able to breed 200 or more mares overseas rather than 140 in the U.S. during the early years at stud may significantly increase the now rare phenomenon of popular new U.S. stallions being exported at the start of their breeding careers; and a less stressful Northern Hemisphere breeding environment for new stallions subject to the 140-limit, coupled with increased financial pressures, may increase the likelihood of new U.S.-based stallions being shuttled.

Price Adjustments for Stallions and for Racing Prospects

Had the September 2019 Jockey Club proposal on breeding limits been implemented without change for 2021, most stallion season prices for commercial stallions would have experienced substantial immediate increases.  But because the May 2020 Jockey Club rule phases in mare limits gradually, price changes arising from the phase-in of the 140-mare limit will occur gradually over the next 15 years or so, though with one significant “break point.”

Fertile stallions born before 2020 that face no limits on mares bred will be worth significantly more than similar quality stallions born in 2020 or later. Other things equal though, a stallion born in 2019 will be worth a bit more than a stallion born in 2018.  In the early part of this decade, we should expect to see newly retired stallions born before 2020 be worth more each successive year.  This is because these younger stallions will not be subject to the 140-mare limit that can potentially decrease revenues.  Stallions born after 2019 will find that their values will be substantially diminished because of the 140-mare limit.

An extensive discussion of this topic can be accessed at https://ir.library.louisville.edu/faculty/445/

Robert L. Losey can be contacted at rllosey@gmail.com

CHALLENGING SPRING BECKONS FOR TIGER ROLL, HIS TRAINER, AND OWNER

At just over 15 hands, Tiger Roll does not look like the kind of muscular bruiser who can tackle a four-mile chase over rugged obstacles.  But looks can be deceiving, and this champion with Rolls-Royce-like horsepower has demonstrated that not only can he handle it, but that he might just be the best long-distance chaser of the modern era.

As everyone who follows British horse racing is aware, Tiger Roll has some business to take care of in the coming weeks.  First up, coronavirus permitting, there is the Cheltenham Festival, where he, somewhat remarkably, could become a five-time winner if he lands the Cross Country Chase, putting him in company with the legendary Golden Miller, and just one win behind the all-time record holder Quevega, who won six consecutive Mares’ Hurdles from 2009-2014.

Tiger Roll will start as the clear favorite for the stamina-testing Cross-Country Chase and, if last year’s contest is anything to go by, the current price of 11/10 on betting exchanges looks generous.  A horse rarely goes off as odds-on in these 4-mile tests that tend to become wars of attrition, so seeing Tiger Roll at 10/11 and below with some bookmakers shows how highly he is regarded.

Tiger Roll Tops Ante-Post Betting

But if the Cheltenham Festival is seen as the appetizer of the racing spring, the Grand National is the main course for jumps racing fans.  One can learn about the latest betting odds and markets for the Grand National at freebets.com, but this race is all about Tiger Roll.  He currently leads the betting markets at a best price of 11/2 with Unibet, but those odds will certainly tumble if he runs well at Cheltenham next week.

Competition could come from anywhere in the field of 40; after all, 100/1 winners are not unheard of in the National.  But Burrows Saint (12/1), Definitly Red (12/1), and Any Second Now (14/1) seem to be the candidates taking the most money in the ante-post markets (all odds from Bet365).

A Nation Gets Behind One Horse

If a person is not an avid follower of British jumps racing, it’s difficult to comprehend the high regard held for Red Rum’s three Grand National victories (1973, 1974, 1977).  It was a record that racing fans felt would never be broken.  Few horses had even come close to winning two Grand Nationals until Tiger Roll scored his victories in 2018 and 2019.

And now, on April 4, 2020, the nation will watch as Tiger Roll goes for that hat-trick.  It’s been an interesting lead-up, especially when owner Michael O’Leary played chicken with the handicapper over the weight given to Tiger Roll.  O’Leary was well aware that the media and racing public felt they were “owed” this race, and his threatening to pull Tiger Roll felt a little underhanded.  Tiger Roll received top weight for the race, and O’Leary seems resolved to the assignment.

As for his trainer, Gordon Elliott, a win will be confirmation that he currently is the best jumps trainer in the British Isles.  He has a friendly rivalry with compatriot Willie Mullins, but Elliott has arguably stepped out of Mullins’ shadow in recent years.  A Tiger Roll victory next month will add further weight to the consensus that the younger Irishman has outstripped the old master.

GUIDANCE ON WAGERING ON CHELTENHAM FESTIVAL RACES

The 2020 Cheltenham Festival has nearly arrived.  Between March 10 and 13, the British and Irish horse racing worlds will be focused on Cheltenham. The famed race course will offer four days of the best national hunt racing of the year, with plenty of betting opportunities.

Highly competitive fields at Cheltenham always challenge bettors to pick winners. An important first step is to determine the right bookmaker to patronize. However, it’s not a cut-and-dried decision. As with the increasingly popular sports betting in the United States, bettors in the UK have an array of choices and selecting the right bookmaker requires due diligence.

Don’t Just Join One Site

For starters, joining more than one site is a good idea. Plenty of special offers are extended for the Cheltenham Festival; therefore, it is potentially profitable to find out what is being promoted and by whom. Different bookmakers offer a range of prices on the chasers, so registering with more than one is wise.

Check Out the Offers

Online bookmakers tender various types of welcome offers to entice new customers. To illustrate, a bettor might see the first deposit matched up to a certain amount. Another offer is a risk-free first bet wherein the bettor is indemnified by cash back or a free bet if the initial wager with the bookmaker is a loser.

Then there are the enhanced odds offers. For example, there may be enhanced offers on the favorite for the Cheltenham Gold Cup with extra winnings paid as free bets.

The fine print describing the terms and conditions of welcome offers needs to be read. Not all are as good as they sound and some come with conditions such as high wagering requirements or restrictions on how free bets can be used.

So delve into the promotions a site has to offer, as there are many available. These include, for instance, money-back, enhanced odds, and extra payouts.

Get Reliable Advice

To be sure, there are lots of great options when it comes to choosing Cheltenham Festival betting sites. To narrow the possibilities and sort the good from the bad, a website that reviews online bookmakers can be a go-to source for bettors. Especially, a bettor can learn of a variety of welcome offers and which are most attractive.

Join a Site You Can Trust Financially

Knowledge of the trustworthiness of an online bookmaker is imperative in order to avoid fraud. An online bookmaker should have a UK Gambling Commission licence, which mandates strict regulatory compliance.

Doing business with a site that has an assortment of payment methods is also a must. Moreover, a bettor is well advised to find out how long a bookmaker takes to process withdrawals.

Odds and Markets

Odds quoted by bookmakers can and often do vary, which is another reason why it is prudent to sign up with more than one site. Additionally, look to register with a site that offers plenty of plays. That way, a bettor can wager on, say, who the top jockey or trainer will turn out to be or how many Irish-trained horses will be winners.

A site that has an easy-to-navigate app full of relevant information is a particularly useful benefit to seek. Another feature is the amount of support and guidance a site provides, not just for queries pertaining to offers but also about blogs and statistics that can help a bettor to handicap.