10/27/2011 12:24PM

Q&A: Ken Kirchner

Email
Shigeki Kikkawa

The president of FalKirk International, an industry consulting company, he has been the manager of the Breeders’ Cup’s wagering and simulcast operations since 1996.

Birthdate: Sept. 11, 1956, in Lancaster, Pa.

Family: wife, Kelley; sons Derek, Justin.

Got into racing because . . . I started going to the Preakness infield with a group of 20 college friends in the late 1970’s. I never saw the horses, but it was by far the best party scene anywhere. Then in the early 1980’s, I was working in Washington, D.C., and hung out at a neighborhood bar, Poor Roberts Pub, on Connecticut Avenue, where a large number of patrons were avid handicappers. That’s where I first met Andy Beyer and Paul Cornman, among others. Soon it was Daily Racing Form, speed figures, and weekends at Bowie and Laurel.

From a wagering menu standpoint, what are the biggest changes in the 15 years you’ve been overseeing things? It would have to be the increase in exotic wagering. In the early years, the wagering menu on Breeders’ Cup was rather sparse. We’ve long since added trifectas, superfectas, and rolling doubles and pick threes on every race. In 1998, we made a significant change when we removed coupled entries, which eliminated those three-horse D. Wayne Lukas entries and mutuel fields. By doing so, we expanded the number of betting interests and our wagering options. In 2000, the Breeders’ Cup was the first to add the pick four to the menu, and that’s now the most popular exotic bet in the country. We’ve experimented with head-to-head betting, future bets, jockey bets. We moved to reduce bet minimums, thereby giving more players the ability to cash in on the monster payouts offered every year at the Championships.

What’s new on the menu for this year? A pick five has been added to the first five races on each card, priced at the 50-cent minimum − the same as the trifectas, pick threes, and pick fours.

And now let’s tackle that from the simulcast side. What are the biggest changes in that realm? I’d say three things. First, the consolidation of wagering pools. Fifteen years ago, there were still many sites in the United States and Canada that offered separate pool wagering on the Breeders’ Cup. We moved to consolidate betting into a single pool in order to maximize the pool size and the betting value.

Second, international racing. Mr. Ted Bassett and D.G. Van Clief were strong proponents of a global image for Breeders’ Cup. In 1997, we were able to bring the France PMU into the U.S. common pools, which was a first for any international commingling. PMU now wagers over $5.5 million each year on the Championships. An estimated 20 other countries will participate in those pools this year.

And third, account and Internet betting have forever transformed the way punters participate in our sport in every country in the world. Last year, over $41 million was wagered on the Championships through account and internet betting outlets. That’s 24 percent of the $174 million wagered.

In the past, the host track for the Breeders’ Cup was prohibited from importing simulcast signals from other tracks, but this year at Churchill Downs, Santa Anita, and Aqueduct will be on the menu. How did that come about? That was proposed by our chief executive officer, Craig Fravel, and is designed to help boost ontrack handle amongst those punters who want more betting action, and also to develop closer working relationships with our current and future host tracks.

What was the thought on not doing that in previous years? Part of it was simply due to the compressed time frame that we operated within. With the expansion to two days and longer programs, we have additional time now between the races.

One of the biggest complaints of players at simulcast outlets is overlapping post times of races at different tracks. Could this, at long last, be the impetus to help coordinate post times? The optimist in me would say maybe, but the cynic would say no.

How much has the pie grown in terms of overall handle since you’ve been in your position? For Breeders’ Cup, the growth has been substantial. In 1996, wagering was $64 million. Last year, it was $174 million. There has only been one down year for the handle in the last 15 years, and that was a 3 percent decline in 2001 at Belmont Park after the tragic events on 9-11.

It has long been acknowledged that foreign markets, particularly in Asia, could be potential bonanzas in terms of simulcast wagering. What are the obstacles to making that a more significant aspect of the Breeders’ Cup? Wagering handle figures for Japan, Hong Kong, and Australia is over $50 billion. But there are several major factors inhibiting expansion into Asia. One is legal − Japan by statute cannot accept wagering on simulcast racing, while Hong Kong is restricted to importing a dozen signals per year, and each of those countries also have governmental taxation issues. Second, time of day is difficult for a U.S. product in those countries, as our signal arrives there very early, between 3 a.m. and 8 a.m., and there are no OTBs or racetracks open for betting. Next, there are still a myriad of technology issues related to common pooling that need to be resolved. And, lastly, there are pricing and financial constraints in selling the Breeders’ Cup signal there. As a result of all these factors, we won’t be simulcasting the Championships to Hong Kong this year.

The Breeders’ Cup has been at many different tracks over the years. From a simulcast standpoint, what are the advantages and disadvantages to holding the event in each specific time zone? I believe the best results are when we can provide a race schedule that maximizes our exposure during the peak wagering hours, ideally later in the day. West Coast handle suffers if we have to start the betting at 10 a.m. Pacific, 1 p.m. Eastern. The movement to the first weekend in November is beneficial in that regard, because of the delay in changing daylight savings time, and the extra hour of light we can get in the East Coast time zones.

This will be the third straight year of the Breeders’ Cup Betting Challenge. How does that work? The BCBC is one of the big success stories at the Championships. In only the third year, it is now the biggest real money racing tournament in the world. It requires a $10,000 buy-in, of which $7,500 is the player’s betting bankroll, and $2,500 is applied to the prize pool. This year we expect upwards of 120 players, and a total prize pool of $320,000. Some 26 of those players will have qualified online − most winning their $10,000 entry fee for as little as $100. The best part is talking with the players, who are our sport’s biggest fans – and sometimes critics – and who are very passionate about racing and the Breeders’ Cup. I’m very optimistic that this type of live money betting tournament offers advantages for expansion because this is the reality of what horseplayers do every day – they bet real money.

Hobbies? Golf, more golf, and bike riding.

Best horse seen? I have to say that what Goldikova has been able to accomplish with three consecutive wins in the Mile, against all comers on foreign turf, is the most outstanding feat I’ve ever seen from a racehorse.

Future ambitions? Personally, it would be winning the Kentucky Senior Golf Championship, but I make that a 50-1 shot. Professionally, creating that first truly global common pool and taking the Breeders’ Cup handle over the $200 million mark.