Step inside Mumbai’s iconic Mahalaxmi race course on any major race day, and it would appear that the sport with an elite reputation is thriving. Trendy jet-setters, a steady fleet of Rolls-Royces and Bentleys, and big-name sponsors—they are all there. You may even feel this is the last bastion of the burra saheb, a throwback to the Raj. But inside the club, the general enclosures point to a different truth. The crowds who stand and watch the races are drawn from the hoi polloi, and they, not the aristocracy you may associate with thoroughbred racing, constitute the backbone of attendance on the track week after week.
Like race-courses in other global financial centres—Dubai, London, Hong Kong, Singapore, or Tokyo—Mahalaxmi Race Course is Mumbai’s very own attraction. But mounting losses, Rs 20 crore currently, suggest that the sheen has worn off the turf. Gone is the exhilaration that used to be a feature of most regular race days. Instead a soporific cloud hangs over the course on weekdays when some owners, a few regular punters, and the odd corporate honcho can be seen in attendance.
Despite hosting the only sport in India where gambling is legal, the slowdown at Mahalaxmi has been unstoppable. As this magazine reported last year, the racecourse has been at the centre of heated agitations led by Shiv Sena politicians who want it converted into a public park. But even as that drama plays out unabated, the course’s totalisator betting platform or tote, the automated system that registers bets and divides winnings, has badly hamstrung business: The odds offered on the tote are almost always lower than what unlicensed bookmakers (read underground “bookies”), offer, draining legit revenues.
Another big challenge is high taxes on winnings—20%—in Maharashtra, meaning that the money flows to other centres. Suppose derby winner Quasar, who notched up 16 wins in the past season, is up for another run, and he has got odds of 20 paisa. That means a winning bet of Rs 100 would give a return of Rs 20 after a deduction on the initial bet. But a punter who has the wherewithal to place a bet through the interstate channels, say from Bengaluru where the tax rate is a far lower 8%, would get higher returns on his wager. Jaydev Mody, horse owner and committee member at the Royal Western India Turf Club (RWITC) that oversees affairs at Mahalaxmi as well as the racecourse in Pune, says this is the biggest deterrent to the growth of the sport.
To be sure, betting in racing is shrinking worldwide. A key reason is the rise of in-play betting in other sports. In-play betting, simply put, is the ability to bet online in real time. It splices betting options into many more sequences than just a single win or loss. In cricket, for instance, one can bet on whether a bowler is going to bowl a wide ball or not as opposed to just which side wins. (Though cricket betting is illegal in India, there have been several allegations of “spot fixing”, where bookies collude with players to manipulate outcomes.)
Fantasy sports betting, where software platforms create virtual games that allow users to bet, is also gaining momentum in markets like the U.S. and taking big bites out of conventional betting revenue. Digital platforms account for almost 30% of horse racing betting in the U.S.; for American football it’s even higher at 60%, says Richard Cheung, executive director, customer and marketing, at the Hong Kong Jockey Club.
In India there’s another kind of competition. Dr. Ram Shroff, RWITC committee member, says the proliferation of multiplexes, malls, and ritzy restaurants and bars means there’s plenty more for folks to do other than going to the races. The Four Seasons bar Aer, Blue Frog pub, the Palladium Mall, and the St. Regis are all minutes away from Mahalaxmi.
To arrest the slide, RWITC is betting on a dramatic innovation: evening racing. “Generation after generation, we see the sport losing interest at exponential rates,” complains Zavaray Poonawalla, the newly appointed chairman of the RWITC. Poonawalla is hoping that the novelty of racing under the lights will prove a strong pull. It will also open up a revenue stream at a time when the track traditionally stays closed.
Shroff points out that the IPL showed that night sports could totally transform the way a game is perceived. “People went for [the experience and not serious cricket], but that still helped the sport,” he says. Shroff led the subcommittee that pushed for evening racing before Poonawalla took charge. Last April, he conducted trial runs with live races over two weekends. He also helped organise the high-powered metal halide units that light up the track now.
The proponents of evening racing hope that the Lower Parel business district close to the racecourse will become a catchment area for corporate patrons. The India Bulls and Peninsula Corporate Park buildings alone are home to over a hundred companies with thousands of employees—the right target for evening racing. A key change Poonawalla and his crew have brought in keeping this profile in mind is allowing mobile phones on the premises for a lower fee—Rs 500-odd vs. Rs 7,000 earlier—making it more practical for families to attend.
Initial results have been encouraging: The first official evening race held on January 9 saw a turnout of nearly 8,000; another 2,400-odd joined in from Pune. Even if you discount the complimentary passes, the total audience was easily double of what one would see on a normal day. Helping the cause was the set-up of flea markets, bars, restaurants, and miniature ponies to entertain children.
Even as it looks to be an incremental source of revenue for now, evening races can become the fulcrum for other kinds of businesses. Mody, who also owns Deltin, the largest casino company in the country, knows a thing or two about how such ventures ought to be managed. “Live performances after racing should be amped up to keep visitors engaged,” he says. He points to Dubai’s Meydan where the likes of Bryan Adams perform after races.
Poonawalla says the club is working on bringing in both premium and mid-range dining options as well as shopping arcades and a variety of entertainment acts every other race evening. Then there are theme nights. One weekend the club hosted an Ivy League theme night with races named after Harvard, Yale, and Wharton. Another one was dedicated to clubs across Mumbai, so races were named after Willingdon Club, the Mumbai Gymkhana Club, and so on. The idea, of course, is to expand the follower base, but Poonawalla is quick to clarify that it will take at least two to three years for these plans to mature, and it’s vital that officials are given a free run till then.
The fear is, Mahalaxmi may have already fallen too far behind. At the Asian Racing Conference, which Mumbai hosted in January after a gap of 20 years, the difference between Mahalaxmi and some of the other global racing centres became starkly evident. The conference featured some 500 international delegates, including Zahra Agha Khan and Her Majesty’s (the Queen of England) representative Johnny Weatherby. For industry insiders it was no revelation to see the sport’s evolution on the international stage. Smaller centres like Dubai and Hong Kong have smartly deployed customer-oriented marketing and technology to shape the racing experience that has boosted them into major global centres—a far cry from how the sport is managed in India. Cheung of the Hong Kong Jockey Club says mobile betting helped the club grow betting revenue from $8 billion (Rs 50,536 crore) to $14 billion over the past five years. The use of a second screen that offered live information, live betting, race replay, and the option to scan information for contenders all rang in cash that would have been lost if wagering was restricted to bookies and totes, like it is in India.
A particularly sore point for Mahalaxmi is its infrastructure, which is outdated at best and primitive at worst. The betting counters on the ground floor have iron grills with cubbyholes through which visitors have to peer in, their necks at 45 degree angles as they place bets, struggling to ensure that their silk ties or blouses don’t get snagged in the process. Almost always, the tote employees or the punters have to repeat themselves because there’s too much ambient sound, meaning that there’s a strong chance of your bet going haywire. It happened to me just two weeks ago. I asked to place a bet on horse No. 7 and was given a receipt for No. 11.
Then there’s the murky world of offline gambling, where bookies field illegal bets via their phones or in person, almost always at much higher odds than the official figure. Neither is this new, nor are officials unaware, but curbing bookies is almost impossible because it’s too hard to prove. For example, how do you stop someone sitting in an apartment miles away from Mahalaxmi and fronting bets on his phone?
Before the club elections it was his mandate to clean up the sport, says Poonawalla, admitting that there has been a loss of confidence among the public. Sure it’s a game of skill, according to a Supreme Court judgment in 1996, but it’s also what is classically referred to as a “mug’s game”. There have been instances of jockeys being threatened and asked to pull horses and not win when they could. In the 1990s, ace jockey Aslam Kader was hauled up for “pulling” Rollerball, a horse tipped to be in line for an easy win going by its past record. Kader was banned for three years after he pleaded guilty, but he declined to reveal at whose behest he had acted.
Trainers doping horses with performance-enhancing steroids is another scourge. As recently as last August, at least five horses tested positive for banned substances. Of those horses, three have won major races such as the Indian Derby in the past. Under Poonawalla, the RWITC is looking to hand out bans to all offenders with greater stringency. “Doping is not new in any sport. Those who are involved are always one step ahead of the labs and the regulators, and it’s imperative that club laws keep evolving,” says Poonawalla.
His corporate governance misadventures notwithstanding, beer baron Vijay Mallya has been to horse racing in India what Amitabh Bachchan was to Bollywood—a hero. In the mid-’80s he gave it a booster shot by not only stocking his stables with top-quality race horses but also by hiring the best professionals in the field and allowing them to do what they thought best, says former ace jockey Pesi Shroff who once rode most of Mallya’s champions. In addition, Mallya sponsored some of the largest races in the country. Sure, these were also prime showcases for his liquor products, promos for which are banned in India, but Mallya’s involvement undeniably benefitted the sport.
In fact it was Mallya who first dreamt up evening racing, in the late ’90s. “They had set up lights for around 800 m and even had a few mock races,” says Zeyn Mirza, managing director of United Racing and Bloodstock Breeders, but the idea failed to gather steam because of the inability of senior stewards to coalesce around it.
It’s not going to be a short-term play to turn racing around, Poonawalla reminds me again. “The critical mass will take a couple years. If there are 5,000 new visitors, 200 may come back every week,” concurs Mody. For that to happen, the RWITC will have to step up marketing, notably social media promotions and cross-promotions with brands. But if evening racing is to orchestrate what many hope will be a turnaround for the sport, then mobile betting is the silver bullet. As of now online wagering is banned in India, but with the right support, racing stewards say hundreds of crores in betting revenue could be generated. In the big picture, it adds to the government’s coffers (betting taxes have been falling in the past five years; see graphic).
Mahalaxmi could also lead the way in implementing evening racing across the other eight racing centres in India. Harish Ramchandani, steward of Kolkata’s Royal Calcutta Turf Club, says that in principle there’s nothing holding back evening programmes from starting in West Bengal. Other centres, however, may have a problem. In Hyderabad, for example, the racecourse is situated far from the city centre, and for its largely female staff who sit behind the counters, commuting can be a challenge.
It’s clear the sport needs a Vijay Mallya figure to jump in and rally senior members of the racing community to take things to the next level. On his part, Poonawalla is trying to step up to the plate, but as of now he only has a year as RWITC chairman. Can racing find more champions to pick up the cudgels? It has to find answers soon, lest the lights on the turf begin to dim again.
