As a sport and industry that are inextricably linked, horseracing and betting both have a huge range of interest groups and stakeholders. And few have been at the forefront of recent trends as much as UK Tote Group CEO Alex Frost.
Reflecting on the ups and downs that racing has faced in recent years, Frost observed from his position of leadership the challenges the sport must overcome and how this can be done – including the central role that the UK Tote and its international pool betting partners strive to play in this task.
From passion to professional
A graduate of Eton College and Southampton University, Frost’s interest in horseracing began at a young age. Like many sporting enthusiasts, it was shaped by family interests, specifically his father – who, as he put it, ‘is totally obsessed’ with the sport.
Source – UK Tote Group
Prior to Frost’s professional engagement with the sport – starting with the purchase of a stud in 2016 – his career began in the trading floors of London, where he worked in Equity Sales for Dresdner Kleinwort and Bank of America Merrill Lynch.
It was during his time in the City that Frost first began to notice the ‘many parallels’ between the ways that financial markets operate and the liquidity of pool betting, adding that the racing and wagering sectors both ‘can learn a lot’ from his former profession.
“Crucially, the common factor is that both rely on liquidity to be successful. Everything we are now doing at the Tote is aimed at growing the Tote’s liquidity to create a successful and sustainable business,” he explained.
On how racing can benefit from studying the intricacies of the finance sector, the Tote CEO continued: “I’ve always felt that racing could learn a lot from how markets use data, and specifically the pool has so many similarities to how capital markets are traded around the world.
“It’s always interesting when the data provider doesn’t have an axe on winning and losing, as winning customers are always the best customers. It struck me as a great opportunity for the Tote that hadn’t been recognised.”
Having joined the Board of Epsom Downs Racecourse in 2017, and assuming leadership of the then-newly-formed UK Tote Group in 2019, Frost has had first hand experience of the challenges faced by the sport over the past decade.
One of the most pervasive of the issues faced by the racing industry has been funding, he observed, pinpointing this as a widely recognised problem ‘that absorbs so much time and energy’ and ‘manifests itself in an almost constant conversation about prize money levels’.
“The big picture has to be a very clear plan and north star,” Frost continued. “Our challenge has been that lots of people are focused on different north stars, and a lot of them conflict.
“We all need to row behind a master plan, but we’ve found it difficult to hone in on what the master plan is, despite the Tote being inextricably connected to the sport.
“There’s no racing jurisdiction in the world that isn’t backed by a successful pool. So there is plenty of material evidence that an effective pool in the UK is very important. The challenge has been making sure it is presented in the right way.”
Facing the hurdles head on
As a sport which, as Frost noted, is interwoven with betting, horseracing has a distinct advantage over other sports such as football with regards to fundraising potential.
However, the Tote’s CEO observed that this has not quite been realised, and there are some harsh truths to admit – that betting can survive without horseracing, but not the other way around.
“It’s then a question of how do you make the product better from a betting and consumer perspective” he remarked, citing the customer experience as being ‘central to the sport’s long-term success’.
He added: “Given the financial impact of British racing, and the significant number of people who work in the sport, it is crucial for British racing to work to make its product as attractive as possible to racing fans.
“This will ensure that as many people as possible want to watch, bet and be involved in the sport, either as a bettor, fan, spectator or owner.
“The sport needs a joined up plan, and in order to get people to really enjoy horseracing we need to bring them closer to the horse. We need to recognise that the underlying product is fascinating.
“But from a betting and consumer perspective, we also need to bring people closer to technology and understand how data can work for them. We’re bringing in tournaments and Tote Fantasy, which are much more innovative ways than people are used to betting on racing.
“We want to present people with a fair and fascinating proposition where it is a game of skill – the ‘six and a half hour puzzle’ as it’s called in Hong Kong, where people understand the mathematical way behind picking their horses.”
Broadening the reach and appeal of the Tote and horseracing in general is, of course, a challenging prospect – one that was not denied at all by Frost.
“It is a challenge, and I’m not sure if we’ve got it right so far. But people do get very enthusiastic about what they’re doing and we have a very loyal customer base,” he said.
“We are going to keep chipping away and trying new innovations and ideas, such as our tournaments. We want people to keep sharing their views and enjoy the social element of betting, which I think is much more appealing than a one-on-one battle with a bookmaker.”
Reaching the winning post
To make racing appeal to a wider audience, the Tote has implemented a new suite of products, with a focus on entertainment and engagement. In some cases this has involved taking inspiration from overseas parimutuel betting operators.
This has included the Tote Fantasy product, as well as its tournaments, which were rolled out across the 17 World Pool days, as well as Cheltenham and Aintree Festivals and continuing into the 2022/23 jumps season, enabling players to compete against each other for big prizes that have now exceeded £300,000.
Held in the UK and Ireland, World Pool days, where pool liquidity is combined across over 20 operators around the world, have also been an area of innovation for the Tote and its partners, including the Hong Kong Jockey Club, which has, in turn, had a substantial impact on financial support for horseracing.
As Frost observed, World Pool has also positively impacted the ability for global Tote operators to share information and examine ways in which they can better support the sport.
“We’re very fortunate to be co-chairing the World Tote Association with our friends at ATG in Sweden, who have a very similar philosophy to us, and everyone involved is very similarly aligned,” Frost continued.
“There are more than 20 countries that are working together in World Pool on a regular basis to explore opportunities to make the pools more effective and more appealing to bettors.
“There is also a lot of intellectual capital, data, international connections and technology, and there is the set revenue stream from the sport that comes directly from the pool which ultimately benefits everybody.”
The success of World Pool as a global initiative has been praised by a wide range of industry stakeholders in the years since its inception, such as Irish thoroughbred owner John Magnier, who has agreed with Frost’s assessment that stakeholders should ‘row in behind’ such plans.
Looking ahead to the future of tote betting and the sport it supports, Frost reiterated that the company’s primary objective moving forward is to ‘play a bigger role in financially supporting British and Irish racing’.
He asserted: “This is central to our mission and a key tenant of our success for investors, the vast majority of whom are racehorse owners and breeders.
“Another way to address the challenges is maybe for the industry to assess where it wants to be in 10 years’ time and then plan towards this, and it could get to an incredibly exciting place.
“If you look at how transformative World Pool has already been in the past two years and annualise that growth trajectory, racing will be in a phenomenal place. World Pool can close the gaps, but it needs everyone to get behind it.”
