President Takashi and the JRA 2001

[Handy Harry]

Previously the administrative vice minister of the Ministry of Agriculture, Forestry and Fisheries, Takahashi took over the post of president of the Japan Racing Association in the latter half of 1999. Now into his third year in office, the 61-year-old Takahashi has clearly come into his own. His insight into the industry reflects a keen interest in racing. His opinions reflect great concern for its prosperity and a strong national pride.

Overall, the JRA president considered 2001 a successful year for Japanese racing, both at home and abroad. In addition to the Hong Kong wins, Jungle Pocket (by Tony Bin, IRE) finished first in the Japan Cup (Invitational, GI) following a Japanese sweep of the top five positions in the previous day's Japan Cup Dirt (Invitational, GI). Earlier in the year, Japanese horses turned in a strong showing at Dubai, with a win by Stay Gold in the Dubai Sheema Classic (GII) race and the impressive second-place finish by To the Victory (by Sunday Silence, USA) in the Dubai World Cup (GI).

"The wins will help show the world the high level of racing in Japan and help earn international recognition. I think they'll also serve to convince Japanese racing fans as well," said Mr. Takahashi.

The Japan Cup, started to help boost the level of Japanese racing, long served as a kind of training ground for the home team, a place to compare itself with the world's best. Accepting of its underdog status, Japan took its losses in stride, and learned from them. Losing came easily.

Now, more often on top than not, Japan has yet to take its winning easily. Victory celebrations lack the smug satisfaction of the confident victor. Ingrained feelings of inferiority linger, leaving many Japanese horsemen and fans vulnerable to doubts and self-defeating putdowns -- "The foreign team must have been weak. The win was probably a fluke. We won because we had the home-team advantage." Indeed, it's a fine line between "I think I can and I know I can."

Wins overseas, Takahashi believes, are the best medicine and the best guarantee of consistently strong performances. "More so than inviting top horses to Japan from around the world, I think having Japanese horses go abroad and win is going to serve as a turning point in making Japanese racing much more international," he says.

"We've come to the level where we want to see how our horses rate on an international level. The Japan Cup should become a measure of this and our goal must be for this race to become a worldwide standard."

The fact that 2001 ended with a key play on Hong Kong turf was significant for Japan's racing industry behind the scenes as well. Takahashi revealed that yearend talks with Hong Kong racing executives produced agreement to join forces in battling a growing threat to the racing industry -- offshore gambling. The two parties agreed to actively solicit their respective governments to take action in combating the rise of establishments targeting racing fans -- the lifeblood of both countries' thriving industries.

"Hong Kong is losing a lot of money to offshore betting and Japan is being targeted by England and Canada," Takahashi explains.

Though national-level racing in Japan enjoys huge turnovers, the key to its success is the money returned to racing, the investment in the industry. Strict gambling laws assure sufficient revenue to keep the industry thriving.

"The attitude of each country toward gambling is different. Some countries are very lenient toward gambling, others are very strict. The success of the racing industry in each country is strongly linked to this. I know it will be difficult, but we must not allow each other's opinion on gambling to affect another country's opinion." Takahashi says. "Companies profiting by offshore betting don't pay taxes. There are no meeting expenses. We cannot compete whatsoever with them.

"Gambling is aimed at people in a particular country and I believe that gambling should target the racing of the country in which it is being conducted. Laws have been enacted to deal with gambling on an internal basis. Racing and gambling were meant to be conducted within one's own country, and were established with the idea that each other's rights must not be intruded upon.

"I find it very odd for Japanese bookmakers in Hong Kong to be targeting Hong Kong residents or for foreign bookmakers to be soliciting bets on racing being held in Japan or for foreign bookmakers to be targeting Japanese.

"I think this must be taken up by governments. We are all going to be adversely affected and it's not something that is going to in any way further the racing industry."

In addition to challenges from without, Takahashi speaks of the challenges within and the work awaiting the JRA at home -- efforts aimed at continued improvement. "Like other sports, having stars, in this case, star horses, is important to keeping the sport exciting. It's very important that we work on producing star horses," he says.

Stars, though they may shine on the racetrack, aren't produced there. Takahashi believes a healthy dose of competition is needed. "We're in the process of improving all areas related to competition," he explains. "And one of the things we're working on now is producing a system more in line with the principle rule of competition -- survival of the fittest."

"It's not something you can see directly but it's a foundation that must be solid. It's not the level of competition of horses during the races, but the trainers and the stable staff that we are concerned with. That's where we have to raise awareness and the level of competition."

Takahashi, facing much opposition from trainers and horse owners, is reluctant to go into detail concerning JRA's plans. "Much of what we're aiming for is taken for granted outside of Japan. But in Japan, the JRA's highly regulated, highly controlled system of racing management is based on everyone working well together, with an allotment of profit for all.

"Till now, for example, even if someone didn't win or rarely won, he was more or less protected by the system. But we need to make winning even more profitable. I think that will lead to better horses, horses that are capable of winning outside of Japan. That is our next step," the president says.

"Of course, this is not something that is going to happen overnight. Bringing about change is fraught with problems. We have to make progress slowly, bit by bit."

Like any good business organization, the JRA's success depends on staying in step with the times. Today, Japanese workers no longer are assured lifetime employment and no one can risk the luxury of complacency. "Survival of the fittest" is on everyone's mind, not just the JRA's.

"Many people are under the mistaken impression that the JRA is merely in the pari-mutuel betting business. Step by step, we have worked on developing our racing industry, by developing our breeding and pre-training operations, and health and training facilities. I believe we can consistently produce top-quality racing, racing that is nothing to be ashamed of on an international level," Takahashi says.

The JRA has chosen "Good Luck" as its slogan for 2002, the Year of the Horse. And, in the spirit of good sportsmanship, Takahashi appeals to all. "I urge everyone to take part in the international races hosted in Japan. Come and compete -- for the world of racing."

2001 JRA Statistics of Pari-mutuel Betting Handle

JRA held races on 288 days in 2001, the same as an average year, at 10 JRA tracks around Japan.
Betting proceeds of 3,258,696,881,300YEN represented a 5.1% decline compared to the previous year and this was the fourth year in a row of falling turnover. The breakdown was 66.1% for cash bets (10.4% at the venues, 11% for betting dealt at other race tracks outside of the venues, and 44.6% for WINS) and 33.9% for telephone betting. Although the 2,154,687,805,200YEN in earnings from cash bets fell to 90.1% from the previous year's turnover, the 1,104,009,076,100YEN in proceeds from telephone betting represented an increase of 105.7% from the previous year's results. Broken down by type of bets, 3.1% were to win, 2.42% to place, 9.9% bracket number quinellas, 70.4% horse number quinellas, and 14.2% "wide" quinella places.

Attendance dropped 12.1% compared to the year before, to 9,701,128, falling for the fifth consecutive year.


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Mr.Takahashi(second from the right),JRA President and CEO, was happy with the victory
of Stay Gold in the Hong Kong Vass(GI)

[Handy Harry]

For many, Japan has always been something of an enigma, its mystery heightened in large part by a cumbersome language and the resulting scarcity of information that reaches the outside world. In the racing industry, Japan has been referred to as a "black hole."

The Japan Association for International Horse Racing (JAIR), which this year marks its 10th anniversary, has been working to not only right the one-sidedness of things but to facilitate an overall exchange of knowledge between Japan and the rest of the world.

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The association deals with those international concerns its parent organization, the Japan Racing Association (JRA), does not. "Things basically got to be too much for the JRA to take care of and thus we were formed," says JAIR President Yoshitaka Kitahara. "The JRA, specifically, its international department, will deal with things directly affecting international races or related to international affairs, such as the recent bilateral agreement with Hong Kong on offshore betting. We more or less deal with everything else."

Improving knowledge and communications

Study programs, both to and from Japan, are organized and carried out by the JAIR. Representatives from Asian Racing Federation member countries travel to Japan to observe and study race and track management and breeding. Japanese breeders and owners, when organizing group trips abroad, are advised and assisted by the JAIR. The association also invites a variety of horse industry experts, from horse trainers and behavioralists to equine masseuses and consignors, to lecture in Japan.

The 14 employees at the Tokyo-based association include many racing and horse experts themselves. A number have excellent translation and interpreting skills, a much-needed ability, as a major role of the JAIR is relaying news of Japanese racing to the rest of the world. For Japanese horsemen, a biweekly newsletter in Japanese carries translated articles from racing publications around the world. Glossy-paged, hardcover translations of racing-related books published regularly by the JAIR have brought the history and racing culture of major horseracing countries to Japanese readers. For English readers, the Japan Racing Journal, which carries major horseracing reports, items related to events, commentary on horseracing organizations, interviews with the Japan's horseracing leaders, and various racing statistics, etc., as well as information on both national-level racing and local municipally run racing, is published six times a year and distributed to individuals and groups interested in horseracing around the world.

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Belt tightening

Despite an increasing workload, the JAIR has had to tighten its belt in recent months. Dropping race revenues have induced its main subsidizer, the Japan Racing Association, to order cost-cutting measures. "We have had to cut back on a lot," Kitahara says. "The number of publications that have to be printed are being reduced and there is more reliance on the Internet." The association's bilingual homepage (http://www.jair.jrao.ne.jp), which is regularly updated with news and race results, now receives some 700,000 hits monthly, nearly triple what it received when Kitahara first came to the JAIR in 1999.

Focusing on issues

Like many of the JAIR members, Kitahara's responsibilities often take him abroad. This March he will travel to New Zealand for the 29th Asian Racing Conference, to be held in Auckland. There, he says, Japan will be involved in discussions on two topics in particular. Firstly, much attention will be given the ongoing fight against illegal offshore betting. "Japan will be seeking either an expansion of the Good Neighbor Policy to include other countries, or, using that policy as a model, try to reach other, similar agreements," Kitahara says.

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Another topic of discussion involving Japan will be the formation of an Asian Racing Series, modeled after the World Championships. "First, which countries can host races has to be decided. Right now we can think of Japan, Hong Kong, Australia, New Zealand, Singapore, and Dubai, and perhaps India. There are obstacles to overcome, such as transportation, quarantines, and ratings for Asia. If those problems are worked out, we're hoping to get the series started for 2005."

Back in Japan, international issues are of much concern as well. But, hard times are hitting all and the racing industry is being affected in serious ways, Japanese breeders especially. These hardships are seen to have a great impact on what has been the JRA's long-term plan to open its races to the outside world.



Pursuing internationalization

The JRA is currently in the second phase of its "internationalization" plan. In 2005, the third phase of the plan will go into effect. What that phase will entail is now most likely the topic of heated discussions.

Kitahara, a former JRA vice-president and the man largely responsible for inaugurating the Japan Cup, has always been an advocate of free exchange with the racing world outside Japan. He considers the continued further opening of races to be vital to raising the level of racing, and, in short, to the survival of the industry. The first Japan Cup, he explains, was like a shock treatment for Japanese racing. "It brought about a whole revolution in thinking, in how things were done here, how horses were trained and cared for. That, in turn, helped horseracing to the level it is today."

"Today, the environment for breeders is very bad indeed," he explains. "On the local racing scene three tracks folded last year and racing in Hokkaido is in the red with debts of about 1.57 billion yen. Racing there could collapse at any time. Fewer tracks mean fewer people to buy horses, and with this deflationary environment the prices drop and the number of horses sold drops," the JAIR president explains. The recent year-end saw 1,000 yearlings unsold in Hokkaido, up considerably from the previous year's 600.

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"The breeding world is suffering and no economist here thinks things are going to get better anytime in the near future," Kitahara points out.

"I believe breeders should expand their sights to include other countries in Asia and aggressively target them for sales. Last year six horses were purchased by Hong Kong. It's only six but it's a first. Hong Kong is a potential market. Singapore too, with its international race, will be looking for good horses and Korea as well.

"Those countries must raise the level of their domestic horses and that is where I think Japan can help. It's near and has the ability to help, with horses of good quality. If the prices are lowered somewhat the horses can be sold and exported."

As for the new internationalization plan, Kitahara says, "It will affect mostly breeders and there is going to be great opposition from them. But the road Japan has been walking can't be allowed to freeze over. We have to continue the opening of races. It's the JRA's responsibility to determine the extent. It's going to take a lot of diplomacy, a lot of persuasion. I, for one, am greatly interested in seeing how they handle this."

Opening up to foreign-based horses

Kitahara also believes in opening more and more races to foreign-based horses. Currently, there are 22 international races in Japan. Providing a variety of races, with a number of different conditions--distance, age, surface, time of year--will help to attract competition from abroad. It is only true competition from the outside, he says, that will lead to international recognition. This, in turn, would enhance the value of Japan's stock.

Opposition, unfortunately, comes not only from the breeders. "The trainers and jockeys are affected, too, if foreign horses come in and win. But the fans want this kind of excitement. A series of surprises is one of the best things to make racing interesting."

"There are people who say if foreign horses come and win the betting will suffer. But that is myopic thinking. You cannot just think of the immediate profit. The sport must be kept interesting to hold the fans' interest."

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Kitahara makes an analogy to baseball. "We have Japanese stars going to the Major League--Nomo, Ichiro, Sasaki, Matsui. People were worried. They said fans would lose interest in baseball here. But news of the players abroad comes back, and it actually has led to an overall increase in interest in the sport."

"Remaining closed is to cut your own throat. Racing is a sport that is integrally bound to betting. This is something the breeders must understand and it is imperative that we gain their support for the further opening of racing."

"Crying that things in Japan are bad now just won't cut it. The very march of progress will come to a stop. You have to overcome these hard times," Kitahara emphasizes. "Progress will be the outcome."