FIFTIETH ANNUAL

ROUND TABLE CONFERENCEON MATTERS PERTAINING TO RACING

SHERATON SARATOGA SPRINGS HOTEL & CONFERENCE CENTER

SARATOGA SPRINGS, NEW YORK

Sunday, August 18, 2002

Lexington: 821 Corporate Drive Lexington, Kentucky 40503-2794Telephone: (859) 224-2700 • Fax: (859) 224-2710

New York: 40 East 52nd Street New York, New York 10022-5911Telephone: (212) 371-5970 • Fax: (212) 371-6123

Copyright® 2002 The Jockey Club

FIFTIETH ANNUAL ROUND TABLE CONFERENCE ON MATTERS PERTAINING TO RACING

HOSTED BY

THE JOCKEY CLUB

WWeellccoommee ttoo PPaarrttiicciippaannttss aanndd GGuueessttss page 9Ogden Mills Phipps, Chairman, The Jockey Club

AAccttiivviittiieess ooff TThhee JJoocckkeeyy CClluubb page 9Alan Marzelli, Executive Vice President, The Jockey Club

TThhee GGrreeaatteesstt GGaammee

Introduction page 12Nick Nicholson, President, Keeneland Association

The Mentoring Program page 14John C. Oxley, Owner and President, Oxley Petroleum

Advertising and Marketing Strategies page 16C. Steven Duncker, Trustee, Thoroughbred Owners and Breeders Association

RRaacciinngg MMeeddiiccaattiioonn aanndd TTeessttiinngg CCoonnssoorrttiiuumm

Progress Report page 19Scot Waterman, DVM, Executive Director, NTRA Racing Integrity & Drug Testing Task Force

A Plea for Uniform Medication page 21Gary Biszantz, Chairman, Thoroughbred Owners and Breeders Association

TThhee PPrroommiissee ooff EEqquuiinnee GGeennoommiiccss

Genes, Genetics and Genomics page 26Larry Bramlage, DVM MS, Vice President, American Association of Equine Practitioners

Current Research page 28

Douglas Antczak,VMD Ph.D, Director, James A. Baker Institute for Animal Health, CornellUniversity

TThhee GGlloobbaalliizzaattiioonn ooff RRaacciinngg

NTRA/Breeders’ Cup Ltd. Overview page 32Tim Smith, Commissioner & CEO, National Thoroughbred Racing Association

Marketing Opportunities for the Breeders’ Cup page 33D. G.Van Clief, Jr., Vice Chairman, NTRA & President, Breeders’ Cup Ltd.

The Ascot Perspective on Global Marketing page 36

Marquess of Hartington CBE, Her Majesty’s Representative & Chairman, Ascot Racecourse Ltd.

Global Wagering Opportunities page 39Greg Avioli, Deputy Commissioner, National Thoroughbred Racing Association

Summary & Concluding Comments page 40

Tim Smith, Commissioner & CEO, National Thoroughbred Racing Association

CClloossiinngg RReemmaarrkkss ppage 41Ogden Mills Phipps, Chairman, The Jockey Club

AAppppeennddiixxThe Jockey Club & Related Organizations page 42

Donald AdamOwner/Breeder

Warren AlberCorrespondent, Thoroughbred Times

Helen AlexanderSteward, The Jockey Club; Owner/Breeder

Dr. Douglas AntczakJames A. Baker Institute for Animal Health,Cornell University

Gregory AvioliDeputy Commissioner & COO, National Thoroughbred Racing Association

William M. BackerDirector, Grayson-Jockey Club Research Foundation;Owner/Breeder;

Laura Barillaro Vice President/Controller, The Jockey Club

John BarrMember, The Jockey Club; Owner/Breeder

James F. BartonVice President, American Quarter Horse Association

James E. Bassett IIIMember, The Jockey Club; Retired Chairman, Keeneland Association

Stacy BearsePublisher, The Blood-Horse

W.B. Rogers BeasleyDirector of Racing, Keeneland Association

Reynolds BellOwner/Breeder

Remi BellocqExecutive Director, National Horsemen’s Benevolent andProtective Association

Paul BerubePresident, Thoroughbred Racing Protective Bureau

Jerry BillinskiOwner/Breeder

James BingerMember, The Jockey Club; Owner/Breeder

Edward A. BishopRegistrar, The Jockey Club

William T. Bishop III Attorney, Stoll, Keenan & Park

Gary BiszantzMember, The Jockey Club; Owner/Breeder

Jerry BlackPresident, American Association of Equine Practitioners

Ira Block Senior Vice President and General Counsel, New York City Off-Track Betting Corporation

Richard BomzePresident, New York Thoroughbred Horsemen’sAssociation; Owner/Breeder

Ellen R. BongardOwner/Breeder

Edward S. BonnieMember, The Jockey Club; Owner/Breeder

Lucy Young BoutinMember, The Jockey Club: Board Member, Grayson-Jockey Club Research Foundation; Owner/Breeder

Edward L. BowenPresident, Grayson-Jockey Club Research Foundation

James C. BradySecretary-Treasurer, The Jockey Club; Owner/Breeder

Dr. Larry BramlageVice President, American Association of Equine Practitioners; Rood & Riddle Equine Hospital

Dennis BridaExecutive Director, New York Thoroughbred Breeders, Inc.

Jack BrothersConsultant

Terry BryOwner/Breeder

Cheryl BuleyCommissioner, New York StateRacing and Wagering Board

Robert BurchPresident, The Jockey Club Technology Services, Inc.

Michael ByrneMember, The Jockey Club; Chief Steward, The Jockey Clubof Canada

Alex CampbellMember, The Jockey Club; Owner/Breeder

Chip CampbellSenior Vice President, Television and Sponsorship, National Thoroughbred Racing Association

W. Cothran CampbellOwner/Breeder

Ray CaseyPresident, New York City Off-Track Betting Corporation

Norman CasseChairman, Ocala Breeders’ Sales Company

Keith ChamblinSenior Vice President, Industry Relations & Marketing, National Thoroughbred Racing Association

Penny CheneryMember, The Jockey Club; Owner/Breeder

IN ATTENDANCE

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George ChestonMember, The Jockey Club; Owner/Breeder

Winifred ChestonOwner/Breeder

Sherwood C ChillingworthSteward, The Jockey Club; Executive Vice President, Oak Tree Racing Association

Eugene ChrisiansenChief Executive Officer, Christiansen Capital Advisors, LLC

Jack CohenEditor, Sports Eye

Leo ConnollyNew York State Licensing and Wagering Board

Cornelia CorbettOwner/Breeder

Dick CorbettOwner/Breeder

Joseph CornacchiaTrustee, New York Racing Association; Owner/Breeder

Steven CristChairman and Publisher, Daily Racing Form

Robert CurranVice President, Corporate Communications, The Jockey Club

Van Cushnysteeplestakes.com

Wendy DavisUniversity of Arizona, Race Track Industry Program

Steve DiMauroTrainer

David DizneyOwner/Breeder

Donald DizneySteward, The Jockey Club; Owner/Breeder

Mrs. Donald DizneyOwner/Breeder

Pam Stokes DonehowerOwner/Breeder

Carmine DonofrioSteward, New York State Racing and Wagering Board

Allan R. DragoneMember, The Jockey Club; Owner/Breeder

C. Steven DunckerMember, The Jockey Club; Trustee, New York RacingAssociation; Owner/Breeder

Allaire duPontMember, The Jockey Club; Owner/Breeder

Robert EllistonPresident, Turfway Park

Richard EngelNottingham & Engel

John ErtmannPresident, Equibase Company

Robert S. EvansMember, The Jockey Club; Owner/Breeder

Willian S. Farish, Jr. Member, The Jockey Club; Owner/Breeder

Dan FickExecutive Director of Racing, American Quarter Horse Association

Scott FinleyAttheraces.com

Bertram FirestoneOwner/Breeder

Diana FirestoneOwner/Breeder

Hugh A. Fitzsimmons, Jr. Member, The Jockey Club; Owner/Breeder

Michael D. FlynnConsultant

Robert FlynnExecutive Director, New York Thoroughbred Horsemen’s Association

David L. FoleyExecutive Director, American Association of Equine Practitioners

Alan ForemanChairman, Chief Executive Officer, Thoroughbred Horsemen’s Association

Moustapha FostockOwner/Breeder

Craig FravelExecutive Vice President, Del Mar Thoroughbred Club

Albert Fried, Jr. Trustee, New York Racing Association; Owner/Breeder

Jim GallagherVice President, New York Racing Association

Edward H. GerryMember, The Jockey Club; Owner/Breeder

Martha F. GerryMember, The Jockey Club; Owner/Breeder

Aline GoodmanOwner/Breeder

John K. Goodman Member, The Jockey Club; Board Member, Grayson-Jockey Club Research Foundation; Owner/Breeder

Leonard C. HaleConsultant, Agua Caliente Race Track

Carl HamiltonChairman and CEO, The Jockey Club Information Systems, Inc.

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Richard HamiltonCommunications Officer, National Museum of Racing

Peter HammellDirector, National Museum of Racing

Arthur Hancock IIIMember, The Jockey Club; Owner/Breeder

Dell HancockMember, The Jockey Club; Owner/Breeder

Richard HancockFlorida Thoroughbred Breeders’ Association

Marquess of Hartington CBEHer Majesty’s Representative and Chairman, AscotRacecourse, Ltd.

Greg HawkinsOwner/Breeder

David HaydonPresident, InCompass

Charles HaywardPresident, Daily Racing Form

George Hearst Turf Writer, Albany Times Union

Matthew HegartyTurf Writer, Daily Racing Form

Bill HellerTurf Writer, Thoroughbred Times

John HettingerMember, The Jockey Club; Owner/Breeder

William HettingerOwner/Breeder

James J. Hickey, Jr. President, American Horse Council

David HicksSteward, New York Racing Association

Sally HillOwner/Breeder

Dr. Ted HillRacing Steward, The Jockey Club

Michael J. Hoblock Chairman, New York State Racing and Wagering Board

Carol HoldenOwner/Breeder

David HooperExecutive Director, Texas Thoroughbred Association

Michael HushionTrainer

Alexander IngleCheif Financial Officer and Vice President, New York Racing Associaiton

Hiroshi ItoSenior Manager, Japan Racing Association

Matt IulianoVice President, Registration Services, The Jockey Club

John JacobsOwner/Breeder

Stuart S. Janney IIISteward, The Jockey Club; Owner/Breeder

Corey JohnsenPresident, Lone Star Park

William J. JohnsonPublisher, Saratoga Summer Magazine

Ann JonesOwner/Breeder

Patty JonesExecutive Director, Nevada Parimutuel Association

Richard I.G. JonesMember, The Jockey Club; Owner/Breeder

Russell B. Jones, Jr. Member, The Jockey Club; Owner/Breeder

Mike KaneTurf Writer, Schenectedy Gazette

John K. Keitt, Jr.Partner, Dewey Ballantine, LLP

Nancy KellyExecutive Director, The Jockey Club Foundation; Vice President, Development, Grayson-Jockey Club Research Foundation

Patrick KellyTrainer

Kelly KenneyProduction Coordinator, The Jockey Club

Martin KinsellaExecutive Director, New York State Thoroughbred Breeding and Development Fund

Ken KirchnerDirector of Simulcasting, NTRA/Breeders’ Cup Ltd.

Dr. Cynthia Kollias-BakerEquine Pharmacologist, University of California-Davis

Bryan G. KrantzPresident, Fair Grounds Corporation

Peggy Vandervoort KumbleTrustee, New York Racing Association

Hon. Lawerence J. LaBelleJudge, Saratoga Springs

Tom LamarraNews Editor, The Blood-Horse

Frank LambExecutive Director, North American Pari-Mutuel Regulator’s Association

Deborah LandonOwner/Breeder

Elizabeth LavinOwner/Breeder

Dr. A. Gary LavinMember, The Jockey Club; Vice Chairman, Grayson-Jockey Club Research Foundation

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Gerald LawerenceConsultant, Autotote

Dr. Robert LawerenceDirector, Equine Industry Program, University of Louisville

Robert W. LeeCommissioner, New York State Racing Commission

Dr. Thomas Lenz President-Elect, American Association of Equine Practitioners

Robert LevyOwner/Breeder

James S.J. LiaoExecutive Vice President, Finance and Administration,The Jockey Club

Jack F. LiebauMember, The Jockey Club; President, Bay Meadows RaceCourse

Bennett LiebmanCoordinator, Staff Attorney, Racing and Wagering LawProgram, Albany Law School

Larry LucasYoubet.com

Joe LynchNew York State Racing and Wagering Board

Michele MacDonaldExecutive News Editor, Thoroughbred Times

William C. Macmillen, Jr. Member, The Jockey Club; Owner/Breeder

Robert ManfusoOwner/Breeder

Frank MansellMember, The Jockey Club; Owner/Breeder

David MarshallChief Executive Officer, Youbet.com

Edward J. MartinExecutive Director, New York StateRacing and WageringBoard

Alan MarzelliExecutive Vice President, The Jockey Club

George MaylinDirector, Equine Drug Testing Program, Cornell University

Jim McAlpinePresident, Magna Entertainment

Chris McCarronJockeys’ Guild, Inc.

Claude R. McGaughey III Trainer

Timothy McGinnVice Chairman, New York Racing Association; Owner/Breeder

John MeriwetherTrustee, New York Racing Association; Owner/Breeder

Dan MetzgerPresident, Thoroughbred Owners and BreedersAssociation

Terence MeyocksPresident, New York Racing Association

Linda MillerOwner/Breeder

Ellen MoelisOwner/Breeder

Herb MoelisOwner/Breeder

Virginia MoensOwner/Breeder

Steve MolnarConsultant

John MooneyPresident, Virginia Racing Circuit

Patricia MoseleyChairman, Suffolk Downs

Ted MudgeVice President, Magna Entertainment

Ed MusselmanPublisher and Editor, Indian Charlie

Manabu MutoJapan Racing Association

William Nader Senior Vice President, New York Racing Association

Jerry NeilsenChairman, New York Breeders Association

Nick NicholsonPresident, Keeneland Association

Ted NicholsonExecutive Vice President, New York City Off-Track Betting Corporation

Kenneth Noe, Jr. Trustee, New York Racing Association

John M.B. O’ConnorBoard Member, Grayson-Jockey Club Research Foundation; Owner/Breeder

Dr. Joseph O’DeaOwner/Breeder

J. Michael O’Farrell, Jr. Member, The Jockey Club; Owner/Breeder

Judith O’Farrell Owner/Breeder

Paul OrefficeTrustee New York Racing Association; Owner/Breeder

Debby OxleyOwner/Breeder

John OxleyMember, The Jockey Club; Owner/Breeder

Robert PalumboDirector of Off-Track Betting Relations, New YorkRacing Association

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Ray PaulickEditor-in-Chief, The Blood-Horse

Virginia Kraft PaysonOwner/Breeder

John PeaceMember, The Jockey Club; Owner/Breeder

Stanley D. Petter, Jr. Owner/Breeder

John PhillipsMember, The Jockey Club; Owner/Breeder

Andrea PhippsOwner/Breeder

Daisy PhippsOwner/Breeder

Lilly PhippsOwner/Breeder

Ogden Phipps IIOwner/Breeder

Ogden Mills PhippsChairman, The Jockey Club, Owner/Breeder

Brooks PiercePresident, Autotote Systems

Diana PikulskiExecutive Director, Thoroughbred RetirementFoundation; Owner/Breeder

Clinton Pitts, Jr.Steward, Ohio Racing Commission

Dr. Hiram PolkMember, The Jockey Club; Board Member, Grayson-Jockey Club Research Foundation; Owner/Breeder

Anne PoulsonPresident, Virginia Thoroughbred Association

Lonny PowellPresident, Association of Racing Commissioners International

Michael ReicherPublisher, Sports Eye

Dr. J. David RichardsonMember, The Jockey Club; Owner/Breeder

Norman RidkerPublisher, Thoroughbred Times

Christian RiegleGeneral Manager, Finger Lakes Racing Association

John RoarkPresident, National Horsemen’s Benevolent and Protective Association

Dr. Jack RobbinsPresident, Oak Tree Racing Association

J. Mack RobinsonMember, The Jockey Club; Owner/Breeder

Dolph RotfeldTrustee, New York Racing Association; Owner/Breeder

David RuffraExecutive Vice President, Sales and Marketing, InCompass

Christopher ScherfExecutive Vice President, Thoroughbred RacingAssociations

Peter G. SchiffSteward, The Jockey Club; Trustee, New York RacingAssociation; Owner/Breeder

Karl SchmittSenior Vice President, Corporate Communications, Churchill Downs, Inc.

Barry K. SchwartzMember, The Jockey Club; Chairman, New York RacingAssociation; Owner/Breeder

Andrew SchweigartDirector, Industry Relations and Development, Thoroughbred Owners and Breeders Association

Mike ShaganConsultant

Joseph V. Shields, Jr. Member, The Jockey Club; Vice Chairman, New York Racing Association

Maury ShieldsOwner/Breeder

David SiegelPresident, TrackMaster

Tim SmithCommissioner, National Thoroughbred RacingAssociation

Harry D. SnyderCommissioner, New York State Racing Commission

Joseph SpadaroDeputy Executive Director, New York State ThoroughbredBreeding and Developemnt Fund

Hans StahlPresident, The Jockey Club

George SteinbrennerTrustee, New York Racing Association; Owner/Breeder

Gene StevensEditor and Publisher, Post Time USA

Barbara StevensonStevenson & Associates Consultants

David StevensonStevenson & Associates Consultants

Dennis SwansonExecutive Vice President, Viacom TV Stations

Stella ThayerPresident, Tampa Bay Downs

Mike TragerConsultant

Tommy TrotterRacing Steward

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D.G. Van Clief, Jr. Member, The Jockey Club; President, Breeders’ Cup Ltd.; Vice Chairman, National Thoroughbred Racing Association

Jenifer Van DeinseAssistant Director of Development, Grayson-Jockey Club Research Foundation

Michael VeitchTurf Writer, The Saratogian

Charles E. Vickery IIExecutive Director, National Association ofThoroughbred Owners

John von StadePresident, National Museum of Racing

Bonnie von WeisenthalOwner/Breeder

Charles V. WaitPresident, Adirondack Trust

Dr. Scot WatermanExecutive Director, NTRA Racing Integrity and Drug Testing Task Force

Richard WatsonPresident, Charles Town Horsemen’s Benevolent and Protective Association

Janene WatsonOwner/Breeder

Charlotte WeberMember, The Jockey Club; Owner/Breeder

Wheelock WhitneyMember, The Jockey Club; Whitney ManagementCompany

Robin WilliamsChairwoman, Virginia Racing Commission

Jess YawitzOwner/Breeder

Chris YoungOwner/Breeder

William T. YoungMember, The Jockey Club; Owner/Breeder

Hank ZeitlinExecutive Vice President, Marketing and Sales, Equibase Company

The Round Table Transcript is produced and designed by The Jockey Club’sCommunications Department which can be reached at (212) 521-5326 or (859) 224-2714.

The complete transcription of the 2002 Round Table Conference as published in this bookis also accessible on the Internet where it may be downloaded in sections or in its entirety.

http://home.jockeyclub.com

9

Ogden Mills Phipps: Good morning, ladies and gen-tlemen.

When the first Round Table Conference was heldback in 1953, it consisted of only 18 people. I thinkit's safe to say that it has grown not only in size butin significance over the past five decades.

Many of our industry's most important initiativescan trace their roots - directly or indirectly - to aRound Table Conference: The McKinsey Report, theBruskin Report, the National Economic Impact Studyare but a few of these. And, of course, theThoroughbred industry's largest and most widely supported initiative -- the NationalThoroughbred Racing Association - was unveiled in 1997.

And while we're proud of the history of this event, and the contributions it has madeto the industry, we know that there are still numerous and substantial challenges we needto overcome.

Even as we celebrate a milestone, we must look ahead, not back. I think you'll beinterested by what you'll hear from all of our speakers this morning, and I would like tothank each and every one of them for their participation.

We'll get started with a report on the Activities of The Jockey Club from Alan Marzelli.

ACTIVITIES OF THE JOCKEY CLUBAlan Marzelli: Thank you Mr. Chairman,and good morning ladies and gentlemen.

Because of organizational changes thatwe first announced from this podium oneyear ago, we have a lot of activity to reporton, but we've summarized most of it in thehandout you'll find in the folder at yourseat. I'll just touch on the highlights, andI'll try to stick to tradition by keeping itunder 10 minutes.

Before I get to those highlights though,it seems appropriate to update you onsomething else that was major news in2001: Mare Reproductive Loss Syndrome,or MRLS as it came to be known.

First observed in central Kentucky dur-ing the spring of last year, MRLS causedlate-term abortions in mares scheduled tofoal in 2001 and early-term abortions in

mares scheduled to foal in 2002.We have been comparing this year's live

foal statistics to 2001 and 2000. While wesaw no discernible difference between livefoals reported by Kentucky breeders at thistime last year versus the same date in 2000,this year is another matter.

According to statistics provided by ourRegistry, The Jockey Club has received7,765 Live Foal Reports from Kentuckybreeders through August 5, compared with9,447 through the same date lastyear…and I'll do the math…it's a declineof almost 1,700 foals.

Projecting these results over the entireyear leads us to believe that the 2002Kentucky foal crop will be down by about2,000 foals, or 20 percent.

The good news in these statistics is that

WELCOME TO PARTICIPANTS AND GUESTS

Ogden Mills Phipps

they are not nearly as troubling as earlierestimates of as much as 30 percent basedon surveys of central Kentucky farms takenlate last year.

Further good news is that all indica-tions are that the 2003 foal crop will returnto pre-MRLS levels. Based on Reports ofMares Bred submitted thus far this year forthe 2002 breeding season, we are estimat-ing a 2003 North American foal crop of37,000.

Turning to some highlights from thepast year, I'd like to show you how some ofour recent strategic initiatives and techno-logical innovations have made life easierfor owners, breeders, trainers, racetrackmanagers as well as new and long-timefans of the sport.

I'll start, naturally, with the Registry.Jockey Club Interactive has greatly facili-tated the ease and efficiency with which ourcustomers can conduct business and per-form virtually all registration procedures.

Last year, 50 percent of Reports ofMares Bred and 73 percent of all namesclaimed were submitted electronicallythrough our Internet-based service.

In addition, nearly one-quarter of thefoal crop was registered via the Internet,including the submission of both the appli-cation for foal registration and digital pho-tographs for purposes of identification.

Thus far this year, an amazing 73 per-cent of Reports of Mares Bred and 85 per-cent of all name claims have been submit-ted via the Internet, putting to rest onceand for all the notion that theThoroughbred industry is comprised solelyof people who think computers make goodpaperweights.

Closely aligned with the Registry,equineline.com has become the premiereonline information service for industry pro-

fessionals.Whether it's new and innovative products

like the catalogue supplement and update,which offers up-to-the-minute changes tocatalogue pages, or our one-of-a-kindPortfolio Service, which features instanttransmission of workouts, entries andresults to owners on their personal comput-ers or wireless devices, equineline.comhas all the information industry profession-als need to manage their equine invest-ments.

In addition to enhancing its existingproduct lines, equineline.com has alsointroduced two new services this year. OurInternet-based Trainer Program, launchedearlier this year, assists trainers in manag-ing their entire operation, including mainte-nance of daily training charts, healthrecords and automatic generation ofdetailed invoices which can then be printedout or e-mailed directly to customers.

And just this past week we introducedthe Internet-based version of our popularFarm Management software. The programhelps farms track breeding, foaling andhealth information - and is now fully inte-grated with Jockey Club Interactive, elimi-nating the duplicate entry of data for farmmanagers and their staff. Automatic genera-tion of invoices is also part of the onlineversion of the Farm Management package.

The news we have to report on the rac-ing side of the business is every bit as excit-ing.

One of the principal features of the cor-porate re-structuring announced last yearwas the creation of a technology solutionscompany designed to integrate all data thatis collected at racetracks into one central-ized database and expand and enhance theservices provided across the industry'sexisting data telecommunications network.

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The natural platform from which todeliver these services is the company thatwas known as McKinnie Systems, Inc.

But because the new services will expandthe scope of our existing business farbeyond the racing office and horseman'sbookkeeper departments from whichMcKinnie traditionally operated, we felt thata name change was in order. That name,announced late last year, is InCompass.

The first order of business for the newcompany is to rewrite McKinnie's existingTrack Manager applications utilizing brows-er-based tools and a centralized databasemethodology. I am happy to report that thisproject is well underway and we expect tobe testing the new software at racetrackslater this fall.

Drawing directly from The Jockey Cluband Equibase databases, the newInCompass applications will, for the firsttime, enable racetracks across the countryto access official pedigree and racing infor-mation directly from the source and in realtime.

We wrap up this report with a briefupdate on Equibase, the Thoroughbredindustry's Official database of racing infor-mation.

The story of Equibase is one of industrycooperation and the marriage of informa-tion and technology for the betterment ofthe sport.

And one more chapter was written thisyear with the re-launch of our popularVirtual Stable as an event-, rather thanhorse-, based notification service.

With help from our friends from theNTRA, Breeders' Cup and Triple Crownracetracks, earlier this year we enhancedVirtual Stable to enable fans to track theleading contenders for the Visa TripleCrown and World Thoroughbred

Championships.In addition to workouts, entries and

results for individual horses, fans are pro-vided with a list of upcoming televised racesand are only one click away from purchas-ing race programs, or accessing full resultcharts and other valuable information.

These daily notifications have increasedfan participation in our sport by promotingrecognition of our most visible equine ath-letes as they train and compete around thecountry leading up to our premier events.

One more piece of exciting news beforeI close. Since its inception, Equibase hascontinually investigated emerging technolo-gies to improve the manner in which racinginformation is collected, stored and dissem-inated.

Recently, those technologies have devel-oped to the point that it appears possible, inthe not-too-distant future, to automate thecollection of race data, such as timing,placing and distances. That initiative--whichwe call automated tracking--would revolu-tionize the way racing information is andhas been collected for the past 100 years.

We are in the early stages of testing thistechnology, so we don't want to get too farahead of ourselves. But we think that we

11

Alan Marzelli

may be close to finding an answer. If so,this new technology will not only provideentirely new ways for handicappers to ana-lyze races, but it will also provide broadcastenhancements and new media applicationsthat will help make televised racing morecompelling and open up additional distribu-tion channels for the sport.

This is not a fantasy. Other majorsports--football, baseball, and NASCARbeing three prominent examples--arealready enhancing their broadcasts usingthis technology, and the information gener-ated by it, today.

At its Board meeting earlier this week,the Equibase Management Committee heardabout the success of our initial tests con-ducted at Keeneland in July, and authorized

management to conduct further testing laterthis fall. So stay tuned for further newsregarding this exciting initiative later thisyear.

Throughout our 108-year existence, themission of The Jockey Club has remainedthe same - we are an organization dedicatedto the improvement of Thoroughbredbreeding and racing.

The only differences between the initia-tives we speak of today and those that wespoke of 50 years ago when the first RoundTable was conducted, are due to the rapidadvances in technological innovation andthe power of information that is enabled byit.

Thank you for your time, and enjoy therest of the program.

12

INTRODUCTIONNick Nicholson: The video you have justseen was produced through a new industryeffort to promote Thoroughbred owner-ship. It's called The Greatest Game.

This panel will unveil the structure andfuture plans for this exciting new coopera-tive industry program. The objective is toattract investment for the purchase ofThoroughbreds from new owners, increaseinvestment from existing owners and toreduce barriers and time to entry.

Now we should say at the outset,encouraging new investment inThoroughbreds is certainly a complexundertaking and The Greatest Game cer-tainly cannot solve all aspects of the puzzle.

There is no question that some ele-ments of Thoroughbred ownership that,while important, are for the most partbeyond the control of The Greatest Game.Three good examples that need the com-bined effort and the continued efforts of the

entire industry are:One: The basic economics of

Thoroughbred ownership. It is essentialthat we continue to focus on the growth ofpurses. Purses have increased over the lastdecade, but this needs to continue. Thistrend is a very serious economic indicatorfor the health of racing.

Also, the process of obtaining all of thestate licenses necessary needs to continueto be simplified. And the third example isthat tracks need to emphasize the hospitali-ty aspects of Thoroughbred ownership… the enjoyment of a day at the races watch-ing your horse run will always be one ofthe most special aspects of Thoroughbredownership.

These areas will continue to requireindustry-wide attention but they alone arenot enough. We also need to create anenvironment where someone interested instarting or increasing their investment with

Video prelude to The Greatest Game and introduction of Nick NicholsonTHE GREATEST GAME

Thoroughbreds can receive a proper intro-duction and an appropriate education to allof the aspects of Thoroughbred ownership.

It is this introduction and this educa-tion that are the focus of The GreatestGame.

So what is The Greatest Game and howis it structured?

It is a cooperative effort betweenKeeneland, NTRA, TOBA and The Blood-Horse -- and anyone else who is willing tohelp. It has been underway for approxi-mately one year and, up until now, most ofour efforts have been spent on research andon planning.

We have an executive director and wehave funding. There was a pilot project con-ducted in April where a number of coupleswere flown into Lexington for a weekend ofracing. They were hosted at a lovely dinnerparty at Darby Dan Farm on Friday night.On Saturday morning they went toKeeneland to watch workouts, and they metseveral prominent owners and trainers -among them Debby and Jack Oxley fromwhom they learned how easy it is to win theKentucky Derby. Or at least they met a verynice couple that did win the race.

While at the races they met WayneLukas. Wayne Lukas was so excited aboutProud Citizen's chances in the CoolmoreLexington that afternoon, that before therace he invited the entire group to join himin the winner's circle.

That night there was a wonderful din-ner with several prominent owners includ-ing Jack and Debby, Carol and TraceyFarmer, and several others who came tohost. It was a lovely weekend. We learned alot that weekend. The guests learned, andwe did too.

This weekend, there are 13 guestsexperiencing wonderful Saratoga. There hasbeen a nice dinner at the Reading Room,

trackside breakfasts, the Alabama, and thismorning right while this meeting is goingon, they are touring the backside and visit-ing trainer Rusty Arnold's barn. We hope tohave more of these visits not only toLexington and Saratoga, but also to Del Marand other sites as well.

But most important and what will prob-ably be the most important aspect of TheGreatest Game is follow-up. After theseweekends there will be communication witheach guest. There will be an innovative newMentoring Program that will be made avail-able to each of them, which you will hearmore about. It will be accompanied by astrong code of ethics that will be agreed toby all industry participants.

Two new aspects of the overall programare being launched this month. One is anoutreach television advertising seriesunprecedented in the industry. You will hearmore about that today too.

Another is a new web site, which youare invited to visit…thegreatestgame.com.It is managed by The Blood-Horse. Wewould also like to acknowledge and thankTVG for airing our promotional video, aswell.

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Nick Nicholson

Nick Nicholson: So this morning, to educate us on The Greatest Game we are fortunate tohave two prominent Thoroughbred owners: Jack Oxley, president of Oxley Petroleum; andSteve Duncker, a recently retired managing director of Goldman Sachs.

Gentlemen, thank you for joining us to participate this morning. Mr. Oxley will lead off,and then immediately, Mr. Duncker will follow. Let's watch this introductory video and meetMr. Oxley…

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John C. Oxley

John C. Oxley: Thank you, Nick. It certainlylooked easy and I hope we can make iteasy again, and I hope each and every oneof you can if you wish. It's a pleasure to bewith you this morning to share my racingexperience and comment on aspects of TheGreatest Game.

My wife Debby and I have and continueto share wonderful Thoroughbred experi-ences. Debby is from Louisville, Kentucky,home of the Kentucky Derby. She hasenjoyed the Derby since childhood.

I am originally from Tulsa, Oklahomawhere I became acquainted with andenjoyed riding Thoroughbreds as a child.Later, my parents, and dad particularly,introduced me to Polo - again involving theThoroughbred.

I first became fascinated with racing asa nine-year-old upon hearing the call of the1946 Kentucky Derby won by Assault. Later,

in my high school days, dad took our fami-ly to the Kentucky Derby - won in 1954 bya gray colt named Determine. I had a greattime and, thrilled by the Derby, I think Idecided that someday I wanted to own aracehorse.

Someday came for me at age 35 when Iattended a two-year-olds in training salewith a polo friend and racing enthusiast. Ipurchased my first racehorse and discov-ered the joys of ownership and the win-ner's circle. Hooked on the greatestlifestyle on the planet…I've stayed with thegame and, ironically, after 30 years in thebusiness, I have been fortunate enough towin that Derby with another graycolt…Monarchos…Our thrill of a lifetime!

Today we thoroughly enjoy our lifestylein the equestrian world. With 40 horsesnow in training and 50 broodmares at ourFawn Leap Farm in Midway, Kentucky, weare enjoying the experience more thanever.

We are especially thankful for theexcellent dedication and performance ofour trainers, John and Donna Ward, towhom much of our success is attributable. Additionally, we appreciate the enjoymentwe share with our friends and associates inracing, which is such a nice benefit of thislifestyle.

Properly approached, we believe thereare a multitude of people that can enjoysimilar wonderful racing experiences. TheGreatest Game represents an attractive

THE MENTORING PROGRAM

approach to these prospective owners. One of the most important components

to the Thoroughbred industry, and the pri-mary focus of The Greatest Game, isrecruiting new owners. From the researchdone by the Matrix Group in 2001 we knowthat our prospect is likely to be usheredinto the business by others, often in part-nership, and is likely to encourage othersto join the ownership ranks.

Psychologically, the prospect enjoys thesatisfaction of accomplishment, fun, excite-ment, competition and contact with thehorses. Ownership gives people a sense ofbeing part of the club. Forty-six percent ofthe group surveyed cite "love of the sport"as their primary reason for becoming own-ers.

The pilot project held in April demon-strated the value of this program. Jerry andJana Klauer are a couple who were recom-mended by John Amerman and who madethe trip from New York to Lexington andwho have maintained contacts from theirvisit. They have remained friendly withTracy and Carol Farmer who hosted themthis past week in Saratoga.

Follow-up is an important componentto The Greatest Game. The consultant pro-gram is designed to provide prospectivenew owners with as many qualifiedresources as possible so they may makeeducated and informed decisions. The pro-gram will provide new owners with up tothree qualified "consultants" from whichthey can choose. All qualified consultantswill have one opportunity to be teamed upwith a prospect until the list of consultants

is exhausted, at which time the lotteryprocess will begin with a fresh list. Anaccounting firm will conduct the lottery.

The consultants will have to becomemembers of The Greatest Game. In carryingout their role of providing service to theThoroughbred industry, members must rec-ognize the need to do so in a professionalmanner and to deal with the public andcolleagues with the highest degree ofintegrity. The consultants who agree to par-ticipate in this program agree to competentrepresentation and full disclosure on allmatters involving transactions betweenthemselves and their principals. The mem-bership will have an oversight committee toensure the guidelines are being followed.

Consultants, hosts for the variousGreatest Game weekends and industry lead-ers will take the lead in making sureprospects who funnel through The GreatestGame receive the follow-up and guidancethey need to become involved and to besuccessful.

Finally, the web site… thegreat-estgame.com has a new look. It isdesigned to focus on the fun of ownershipwhile providing important information andlinks to industry information. The site willprovide stories of ownership from all levelsof the business. The web site will also actas a tool for prospective owners to contactThe Greatest Game personnel to requestinformation and guidance.

As I said before, this is the greatestlifestyle on the planet. Thank you and goodluck in all of your racing endeavors.

15

Video introduction of C. Steven Duncker

C. Steven Duncker: Every time I see thegreatestgame.com video with everybodyjumping around it gets my blood boiling.Even at home, I tape it so I can play it overagain when it is not on TV. I guess I am alittle bit jealous, Jack, of your video whenyou are winning the Kentucky Derby andthings like that. Although, I must say theRound Table Stakes and the BernardBaruch Handicap were big thrills for me.

I just wanted to start, since TheGreatest Game is about getting new ownersin the business, by just briefly telling youhow I got my start in the business.

I grew up in St. Louis, Missouri and thelocal tracks there are Fairmount Park andOakview Downs…I trust that maybe not allof you have heard of [them]. But, at age14, I found myself spending every Fridayand Saturday night there. Many times, hav-ing to pay seniors in high school that coulddrive to take me over.

My best friend shared this passion withme and we decided at 17, that the next stepwas to buy a racehorse. So, we figured outhow much money we had if we committed95 percent of our net worth to the project,and realized that we had to get a few otherpeople involved. So we talked a few of ourother friends into it, and we had a theorythat if you went to Kentucky and bought ahorse and then brought it to FairmountPark, no matter how poorly they had beenrunning in Kentucky, they could do betterin the St. Louis environment.

So we did that. We bought a horse inKentucky. We realized we didn't have atrainer. We went over to Fairmount Park,my friend Ted and I. We took the programout and ran our fingers down it until wecame to a name that we kind of recognized.

We paged the trainer over the PA sys-

tem, asked him to come to the racing secre-tary's office, stuck out our hand and said,"I'm Steve Duncker, I'd like you to train ahorse for me."

The guy said, "Could you put up $1,000for bills? That's the way we do it."

Anyway, the big day came about threeweeks later. We had been talking it up and Ithink half of our high school showed up.And when Informal Affair won the race byfive lengths, with half of our high schoolgoing crazy, I think the hook was set aboutas deep as you can set it.

That day at Fairmount was a little bitnotable for one other thing. They werebreaking in a new track announcer that day,and as they said in the Racing Form the nextday, "Twenty-eight-year-old Irishman TomDurkin was especially well received by thefans." He's come a long way fromFairmount Park!

Obviously, our group had a burningdesire to own a racehorse. What TheGreatest Game is trying to do is not onlyfind people who also have that desire, butfind them and make it a little easier forthem to own a racehorse.

The first step, and Jack mentioned this,was a study by the Matrix Group. What itshowed was there was an extremely strongpotential for new owner developmentthrough advertising and public relations.The first step in this was to get a specificprofile for the candidates, and you can seeit on the bottom there: males, late 40's, andearly 50's. I won't go through it all.

The second part of that was finding:what are the hot buttons for these people?What is going to get them excited? What dowe touch on?

Some of these things are: the contactwith the horses, the fun and excitement of

16

ADVERTISING AND MARKETING STRATEGIES

the game, and the satisfaction of accom-plishment.

One other thing that came out of this,and I think Nick mentioned this a little bit,is that is takes a long time from the timepeople start thinking about owning a horseuntil the time when they actually do. It is anaverage of five years from when you areinterested until when you pull the trigger.One of the things all this can do is really,not only get people interested, but also justshorten that time. It is a complex process,so if we help them through it, it really helps.

The ad campaign that we are about togo through has a tag that really shows thepassion for the game. Once again, I am surethis is as good as it gets in terms of showingthat. The ads that you are about to see takea little bit different tack, but once again,they really do showcase the owner…some-thing that is a little bit lacking in the sport.

Really, where they go with this is toshow that people who have been extremelysuccessful in other businesses…how muchpassion and love they have for theThoroughbred game…and how much what-ever thrills they had in their career arematched or topped by the Thoroughbredgame.

Once again, going back to the demo-graphics that are targeted, we have a veryspecific group of spots and where we aregoing to run them. I think we have a tapethat shows that. {Video of programs during which adver-tisements will air}

I think if we are targeting a demograph-ic of males age 40-to-50, certainly the GolfChannel and the "Squawk Box" are about asgood as it gets for that.

Now, I would like to show a couple ofexamples of the ads that we are talkingabout. So let's roll that, please.

{Video of advertisements}I think having seen those, you can see

how the target audience could identify withthe people in there, and look to have thatsame thrill that Gary [Biszantz] and Kenny[Trout] are talking about.

The second part of this focus is thepublic relations campaign. It has a fewcomponents to it. Certainly, pitching ourstory to magazines like "People" would bebeneficial.

The second point…information onThoroughbred sales and features onThoroughbred sales is an interesting topicbecause anybody that goes to the salesknows there is an energy to it…there is anexcitement to it that I don't think has reallybeen captured much for people out there. You go and you watch this, but when youare there, I think it is really captivating. AndI think if we can bring that to people, wecan draw them into that world a little bit.

Biographies of owners and their recentpurchases of the Thoroughbred…onceagain, this is an issue where we highlightthe owner, not at the expense of the trainersor jockeys or horses, but show that theseare important participants in the game.

17

C. Steven Duncker

We will also be sending out these TVspots and asking our track partners to helpus promote all this. They are going to be anintegral part of this whole process.

In finishing up, this is exciting stuff.This is the first time there has been a coor-

dinated effort over mass media to show theexcitement of Thoroughbred ownership. Iwatch these commercials and I get excitedand I've been doing it for 25 years!Hopefully, it will catch on with the peoplewe are trying to target.

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CONCLUSION

Nick Nicholson: Well you now know aboutthe initial launch of The Greatest Game.Future programs hopefully will include newways to participate as an owner…we willsearch for ways to become involved withThoroughbred ownership without the sub-stantial initial investment.

You may ask how you can help.Research tells us that the next new ownerscurrently are sitting in our grandstands.Racetrack operators can assist by providingowner recognition and appreciation pro-

grams. There is a track kit that containsvideo spots you can run on your in-housenetwork and camera-ready copy in varyingsizes for your daily programs.

If you are an existing owner, perhapsyou know of people who have the interestand means to become an owner. We will doour very best to assure that any newprospect you pass on to us will receive asolid basic education, fair and honest treat-ment and certainly a good time.

Ogden Mills Phipps: Thank you Nick, Steve and Jack for your report. The Greatest Gamereminds all of us what really is our greatest game. We all share your optimism in the program.

C. Steven Duncker: Nick will now take over and talk a bit about how everyone else can helpwith this. Thank you.

Dr. Scot Waterman: Thank you, Mr.Chairman.

One year ago, my predecessor JimGallagher stood before you and detailed theresults of the NTRA Racing Integrity andDrug Testing Task Force's Supertest proj-ect. It was our hope that the results, alongwith the three years of research into thestate of drug testing included in the report,would serve as a catalyst for an industry-wide movement towards better and moreuniform testing procedures.

At the same time, the AmericanAssociation of Equine Practitioners waswell into the planning stages of theRacehorse Medication Summit, whichbrought 35 individuals representing 21industry stakeholder groups together at theUniversity of Arizona's Annual Symposiumon Racing in order to build consensus onthe most basic elements of a nationwideuniform medication policy.

The confluence of these two efforts leddirectly to the development of the RacingMedication and Testing Consortium, and itis my hope that 20 years from now they willbe viewed as the defining moments in theindustry's attempt to address these issuessuccessfully.

The Racing Medication and Testing

Consortium, which is now the working titleof the group originally brought together bythe AAEP, has had two additional face-to-face meetings since December.

On May 1st in Louisville, the groupdivided into three task forces to work con-currently on key issues related to the devel-opment of a national organization and uni-form medication policy. At Hawthorne RaceCourse on July 16th the group receivedprogress reports from each of the threetask forces and discussed and debated theirwork along with logical next steps.

This morning, I will outline theprogress of each task force, and where theConsortium now stands.

The Business and Organizational TaskForce, chaired by Hans Stahl of The JockeyClub, was given the mission of developing apermanent structure and governance forthe Consortium as well as exploring bothshort- and long-term funding options. Atthe July 16th meeting, Alan Foreman of theThoroughbred Horsemen's Association pre-sented draft Articles of Incorporation andBylaws. The group agreed in principle tothe concepts presented in the documents,including the makeup of the governingboard of directors and those issues requir-ing a supermajority vote. Both documents

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RACING MEDICATION AND TESTING CONSORTIUM

Ogden Mills Phipps: The issue of medication is one that we have addressed at this venuemany times but it's doubtful that we've ever had as many organizations and individualspulling in the same direction as we do now.

The next two speakers have devoted countless hours of their time and energies to thetopic. Their work is truly a labor of love. Dr. Scot Waterman has been an important partof the NTRA Racing Integrity and Drug Testing Task Force for the past few years and,more recently, the Racing Medication and Testing Consortium. It is a pleasure to welcomehim here for an update. Scot…

PROGRESS REPORT

will undergo minor revisions and should befiled officially by the end of the year.

The Business and Organizational TaskForce has also developed an extensive firstdraft of a business plan for the Consortium.Because the business plan is still in draftform, it would be premature for me to dis-cuss it in specifics today. However, one sec-tion of the business plan needs to be men-tioned this morning, and that is the organi-zation's funding.

While the long-term goal of theConsortium is to develop a funding mecha-nism that will ensure the ability to realizeour goals and objectives, it was recognizedearly in our discussions that developingand implementing a mechanism that isequitable to all industry stakeholders wouldtake time and effort.

Short-term funding is required, though,to maintain the Consortium's momentumby achieving initial strategic successes inidentified high priority areas, such as thedevelopment and implementation of amodel medication policy or the develop-ment of new tests and technologies fordetecting novel, performance-alteringdrugs. Therefore, the Business Task Force

has asked prospective board members ofthe Consortium to make a three-year finan-cial commitment that would be reduced asrevenue from a permanent funding mecha-nism is realized.

I am happy to report to you this morn-ing that our industry is responding to thecall for bridge financing. At this point, wehave a total of $625,000 committed by theThoroughbred Owners and BreedersAssociation, the Thoroughbred Horsemen'sAssociations, the New York RacingAssociation, The Jockey Club, the KentuckyThoroughbred Association, ThoroughbredOwners of California, NTRA/Breeders' Cup,the American Quarter Horse Associationand their member tracks and the AmericanAssociation of Equine Practitioners. I wouldlike to take this opportunity to publiclythank those who have already committed,and those who plan to contribute, for theirsupport as we work towards our target ofone million dollars.

In order to put that money to the bestpossible use, it was necessary for theConsortium to establish short-range priori-ties. This job was assigned to the ResearchPriority Task Force, led by Dr. Rick Arthurof the American Association of EquinePractitioners and Dr. Rick Sams of The OhioState University. A draft list of priorities waspresented to and agreed on by theConsortium at the July 16th meeting.

In addition, this Task Force also devel-oped a system for the Consortium to acceptand evaluate grants based on the modelcurrently being used by the Grayson-JockeyClub Research Foundation. The projectsthat we will attempt to fund in the initialyear will reflect a balance between ourgoals of developing new tests for substancesof no therapeutic value to the horse that aresaid to be in use--such as erythropoietin--

20

Dr. Scot Waterman

and research on drugs of known therapeu-tic value to the horse--such as procainepenicillin--so that we can understand howthey best fit into a model medication policyand, most importantly, have the scientificdata to support us when the policy is takento state regulators.

That leads me to the final Task Forceupdate: the Model Medication Policy TaskForce. Chaired by Jim Gallagher, now withthe New York Racing Association, theModel Policy Task Force has the mission ofpreparing a model medication policy thatthe Consortium can unanimously endorseand advocate to state regulators - resultingin a single, national set of medication rules.

Using the Tucson consensus documentas a template, the Task Force prepared anine-page draft policy that was discussedon July 16th. While it would be unrealisticto think that we could work through all ofthe difficult issues related to a uniform pol-icy in three short meetings, I believe that inthe end a consensus can be reached.

However, it is clear to me that this con-sensus can only be achieved through apatient and methodical approach thatmerges the findings of unbiased scientificresearch with realistic views of the issuesinvolved.

For a group only eight months old, wehave covered an extraordinary amount ofground. The Racing Medication and TestingConsortium will hold its fourth meeting inOctober to build on what has already beenaccomplished. A passionate dedication tothis issue has gotten us this far. It's certainto be sternly tested in the future, but thealternative - the status quo - is unaccept-able.

We have already seen several examplesthis year of how badly a sport's image andreputation can be tarnished in the eyes ofits fans by a "bury-your-head-in-the-sand"attitude. The Consortium is, slowly butsurely, developing the framework to pre-vent that from happening to our sport.

21

A PLEA FOR UNIFORM MEDICATION

Gary Biszantz: Thank you Mr. Chairmanand distinguished guests.

I'm pleased and very proud to beasked to present my views on uniformmedication and why it is critical and essen-tial to enhance the integrity ofThoroughbred racing and thereby supportthe NTRA's effort to elevate Thoroughbredracing to major league status.

Last week I had the opportunity tospend a day with my daughter in NorthernCalifornia and on Sunday morning we jour-neyed to church and I listened to a Baptistminister give a little talk on "commonsense as it applies to religion." It impressed

me so much that it made me think thatmight be a good topic for me to discussthis morning as it applies to medicationgiven to the race horse in a very appropri-ate way.

So let's take sort of a common senseapproach to some of the obvious questionsand problems I think owners and theindustry face.

The first one would be: does it makesense for trainers and owners to ship andrace horses all over the United States andbe confronted with figuring out the existingmedication rules which apply in the statethat they're running in, but are totally dif-

Dr. Scot Waterman: It is now my pleasure to introduce Gary Biszantz, the chairman of theThoroughbred Owners and Breeders Association, and a passionate and inspirational forcewith the Racing Medication and Testing Consortium. Gary…

ferent from the state that they came from orwhere they're going? Does this confusioncause unnecessary positives to occur,unnecessary bad publicity and create a badimage for Thoroughbred racing when it'sreally not necessary?

Does it make sense to race horses ontherapeutic medications under the impres-sion that these medications do not improveperformance? I personally believe that wewere led astray years ago by some - justsome - in the scientific community whomade us believe that increased medicationusage would increase field sizes, allowhorses to race longer, and make morestarts per year, when the facts today clearlyshow the reverse is true of every promise.An old expression that I grew up with "Wellintentioned, but misdirected" may wellapply to some in the veterinary community.

Interestingly, Webster defines therapeu-tic very simply: to heal an injury or illness.Interestingly, the veterinary community, oradvisory committee, rewrote that definitionas follows: therapeutic medications admin-istered by or under the supervision of a vet-erinarian that support the health, welfareand fitness of horses during training andracing or facilitate their safe and humanehandling during routine procedures.

That sounds pretty good but I question,myself, the veterinary community to explainto me, this audience or any audience how ahorse that has an injury or an illness -- suf-fering from a conceivable stress fracture,possibly a chip or maybe a soft tissue injury-- treated with therapeutic medications andasked to run six furlongs in 1:10.1 with 10horses chasing it around the track, is in thehealing process. It's hard for me to under-stand how that healing of the injury isoccurring during that program.

I believe the truth is just the opposite! Ibelieve that permissive and injudicious use

of medications get you to the next race,with less pain, but the long-term results aregenerally disastrous for the horse.

Common sense also tells us to look atsome critical statistics -- and statistics rela-tively don't lie although we hate to acceptthem sometimes -- on horse starts per year,which are down nearly 50 percent over thelast 20-to-25 years. Where they used torace 12 or 13 times a year on a regularbasis, we're now down to 6 or 7 times peryear.

Interestingly, horse careers have short-ened from four years to two years. So we'velost again another 50 percent over the last30 years…and in the last three years theyhave gone down to just two years as theirlength.

The trend is down in every five-yearperiod that we look at as far as the oppor-tunity for the horse to race. Field sizes havediminished. Veterinary bills have escalatedto record heights, at the expense of own-ers, in an industry that I believe desperatelyneeds the owner to fare better if you'regoing to ask them to reinvest and stay inthe game.

These graphs really do not lie, andsome in the veterinary community have adifficult time accepting reality at the risk ofgiving up income. The dollars do speakloud. Owners are paying for the services.

Owners listen to trainers, many ofwhom rely too much, in my judgment, onveterinarians to help them make the nextrace.

Economic decisions outweigh thehorse's health, fairness, and safety for boththe horse and the rider. A playing fieldwhich is level for all participants is all weall ask for.

The drug task force, which I am proudto be a member of, has worked really hardthe past 1 ½ years to analyze testing, drug

22

performance and what constitutes an unfairadvantage medicinally.

Many meetings have been held andmuch progress has been accomplished, butwe continually face difficulty in arriving atdefining a policy for uniform medicationthat all jurisdictions would accept andcomply with.

Part of the delay is the call for moreresearch, and who could be opposed tomore research? I hope - and I'm sure youdo - that research goes on forever and newfactual data is provided to us so we canadjust whatever policy we start with andagree to. We should always be a work inprogress - always changing somethingthat's better.

Some people spend their focus on raceday - what should happen to theThoroughbred on race day? Should horsesreally be clean on race day and free ofmedication or should they be allowed torace on medications? We know enoughtoday, in my judgment, to approve the med-ications that we know do not improve theperformance of the horse.

Some argue, knowledgeably, that with-drawal times for medication are appropri-ate. Some argue that decision levels andthreshold levels are appropriate. And someargue that we have to have both.

For me, I am confident in a simplerphilosophy: less is better than more. Moremedication, in my judgment, has all thearrows that we've looked at in the chartspointing the wrong way. I cannot defy thecharts and I cannot defy the logic that'strue to them.

The breed essentially may well beweakening. The distance of our races arecontinually shortening. Being a member ofthe Graded Stakes Committee I get to seethe opportunity consistently of tracksreducing the length of many of the great

races in America. The racing life of thehorse is half what it used to be, two yearsinstead of four. Starts per year are downfrom 12 or 13 times to six and still falling.Field sizes are smaller and tracks struggleto fill the races. And too many horses at theend of their competitive careers are use-less, primarily, in my judgment, from over-use of medication. And those of you in theaudience, like myself, who are involved inThoroughbred retirement centers see thatvividly when the horses show up at ourfarms.

Medicine, technology and science havesignificantly lengthened the life of humans.I heard just the other day that we are at apoint where the average age of a womanhas been extended to 79 years of age and aman to 74 which is phenomenal. Why arethe statistics so opposite for the horse?What is it about medicine, technology andscience that tells us just the opposite fig-ures for the animal? They don't last as long.They don't race faster. But they are morebrittle and they run less.

In just this past year though, we havemade some great progress on developingsome new concepts, called "ProhibitedPractices" which Scot mentioned. Under

23

Gary Biszantz

this guide, Epogen and Darbepoietin havebeen outlawed, a drug that increases bloodcell counts, but can also cause disastrousresults for the horse.

We've taken a good position, I believe,on shock-wave therapy so that it is usedjudiciously to do what it is supposed to doin the healing process but not used to dis-guise pain so a horse can perform on raceday.

And we are now discussing, as some ofyou probably read in today's Racing Form,anabolic steroids, which are being out-lawed in all major league sports and which,in my opinion, horseracing cannot afford tocontinue the use of and have the publicknow that it's illegal for all other sports,but okay for Thoroughbreds and we'regoing to give it to them and it does enhanceperformance. These are difficult things butwe're making progress here.

I don't want you to be dismayed againabout the progress. NTRA is making greatprogress, and it is my hope that solid think-ing horsemen, supported by all owners,will work together to blend a uniform med-ication policy for Thoroughbred racing inAmerica that everyone can comply with. Wejust can't know what's right. We have to dowhat's right. It's the responsibility, in myopinion, of those who have custody of thesegreat animals to know what's right and todo it.

When instituted, and if approved even-tually, lab testing can concentrate on what itshould be looking for and owners andtrainers will know the field is level.The benefits of uniform drug testing areenormous: health and welfare of the horsewill be improved; integrity for the sport willbe bolstered; fans trust that they do notneed two forms for handicapping, one forthe performance of the horse and one for

the performance of medications; hopefullywe'll have fuller fields; we'll have longerlife cycles of the horse; we'll get morestarts per year when horses are sound andrace reasonably free of medications onrace day; probably we'll have reduced costsin overall national drug testing whichshould be comfortable for many becausethe labs and chemists for the first time willbe in sync on something that we've present-ed to them.

America has many, many quality veteri-narians who endorse uniform medication.They recognize that their income may be alittle bit less or reduced in some cases, butowner's costs are also reduced and honestyand fairness will be enforced in the sport.Long term it's a win-win for everybody.

I grew up believing that the horse wasfirst, the trainer was in charge and the vet-erinarian was there if we had injury or ill-ness. I can still remember years and yearsago when if a horse was sick or had aninjury, you had to call on the loud speakerand say, "Jack Robbins, would you go toBarn 37" because there were only threeveterinarians on the grounds and it wasserious. Today, on the backstretch of mosttracks, you can't find a place to park yourcar because there are so many veterinarytrucks--there's one for every barn.

I never believed that the vet in manycases was more important than the horseand the trainer, unless we had an injury orillness. Times have changed a lot today andowners are paying a huge price for manymedications, in my judgment, some ofwhich are given for the wrong purpose,and some of which are given to just get anedge.

I'm hopeful we can go back to thinkingthat the horse, safety, and fairness are moreimportant. I hope all of you in the audience

24

can endorse these views and help move thisgreat sport forward. This year 2002 isshowing some significant signs of improve-ment in attendance and handle…Saratoga'shaving a great meet…Del Mar's having agreat meet. We have a chance to moveThoroughbred racing to a major league sta-tus.

Uniform medication across Americacan only help our great sport. I urge all ofyou to encourage your representative to getthe job done. The country is crying for uni-form medication. We can't stall or delayany longer. We need to move ahead anddevelop a best practice that will comple-ment the great sport. Thank you.

25

Ogden Mills Phipps: Thank you, Scot and Gary. Your hard work, and the work of the taskforces, seems to be paying dividends. We've talked about it a long time and I hope you'll beable to report next year on a lot of progress.

Dr. Larry Bramlage: Thank you, Mr.Chairman.

Last century was the century of physics.We went from the horse to the space shut-tle in transportation and from the quill pento the computer by unraveling the laws ofphysics.

The upcoming century is going to bethe century of biology. We're not really surewhere we'll go by the end of the centurybut we do know what's going to take usthere and that's the study of that moleculeDNA.

DNA contains the genetic code of everyindividual in the center of every cell in thebody. We recognize this shape as beingDNA when it's clumped up in the form of achromosome but it only does that forreproduction. During most of the cell's lifeit is unwound, untwisted and unraveled intowhat is sort of a spiraling ladder.

Now, the entire genetic code is writtenin an alphabet of four letters - A, T, C andG. If you flatten out this ladder you'll seethat A and T are always combined and Cand G are always combined and they canoccur as a T and then an A, or a G andthen a C, but they're always in combination.

DNA is uniquely positioned to preservethe genetic code because once you need anew cell, you just split the ladder along thelong axis and reconstruct the appropriate

half and you have an exact copy. If you thenseparate the copied chromosomes into twoparts, you get two daughter cells that areexactly alike. If you separate them into fourparts and recombine half of the parts froma male and a female you get reproduction,or inheritance, the study of which is calledgenetics. That's an old science.

The rest of this is new science happen-ing along here in the recent past. Now, inorder to understand genes, you have tohave a cursory understanding of proteinsynthesis because every cell does its workby the production of a protein which itsends out to accomplish a goal.

DNA is too valuable to risk outside thenucleus of a cell because if you disturb theDNA, you've changed the genetic code forthe rest of that individual's life. So it staysin the cell at all times.

It's translated by this molecule calledRNA which is sort of like half of the ladderof the DNA. That code goes to the manufac-turing centers in the cells and each of thesequential triplicates of those letters of theDNA code codes for one amino acid. Anamino acid is represented by these littleballs in this sequence. When the aminoacids are chained up, they form a protein.We all know about amino acids from nutri-tion. A protein is just a combination ofamino acids from that sequence.

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THE PROMISE OF Equine GENOMICS

Ogden Mills Phipps: In recent years, we've read and heard much about The HorseGenome Project. We're honored today to have with us Dr. Doug Antczak of CornellUniversity, who will give us a glimpse at what the future may hold in this area.

Before Doug comes up, our good friend Dr. Larry Bramlage, who always does sucha good job of making scientific and veterinary terms a lot easier for us to understand,will give you a brief introduction. Larry.

GENES, GENETICS AND GENOMICS

So, conceptually, we've got the masterplans in the nucleus…they never leave. Thejob blueprints go out to the manufacturingsite. We have a delivery system. When theycome together a protein is produced and itgoes out of the cell to do its job.

So what is a gene?A gene is nothing but a segment of DNA

that codes for the production of one pro-tein. It has the order of assembly for eachof these amino acids represented by thosegeometric shapes and the instructions forassembling that protein. It's one segment ofDNA, one gene, one protein, one effect.And everything gets done in the body in thatmanner.

Now, you can manipulate genes andthat process results in a science calledgene therapy. This is a very busy slide toshow that viruses are the number onemanipulator of genes. Viruses can't repro-duce themselves. They insert their own littlesegment of DNA into the nucleus of a cellwhich, when it's translated, causes the cellproduction mechanism to produce virusesinstead of whatever protein might havebeen intended at that time.

In fact, they produce so many virusesthat they actually rupture the cell and liber-ate the viruses again to wreak havoc on thenext cell. This process going on in multiplecells at the same time causes the cell deaththat you associate with the fever and chillsof a virus.

Now, the viruses are kept in check bythe immunity of the body…and theGrayson-Jockey Club Research Foundationhas been involved in many immunity proj-ects, as have all research foundations…buta new area is to attempt to produce immu-nity to DNA. Viruses are very effectively neu-tralized by immunity but bacteria and someother disease carriers are not. The reason

is that their DNA is protected in the middleof the organism just like it's protected in acell.

So we have three projects underwayright now attempting to expose this DNAand tag an antibody to it which stops thereproductive process and one of the placeswhere this would have a lot of benefit is aninstance like Rhodacoccus pneumonia inthe foal where the treatment is very diffi-cult.

Now, other funded research, and this isthe prime crux of gene therapy, is to trick avirus into working for you. You assemble aDNA sequence which would be a gene,insert it into the virus, let the virus insert itinto the cell and then that DNA will tell thecell to produce something you need…something like an anti-arthritic. This will bethe frontier where the first gene therapybecomes practical.

There are two funded projects from theGrayson-Jockey Club Research Foundationgoing on right there. This is biologic treat-ment targeted exactly at the disease processwith a very efficacious treatment methodthat has few by-products. It's much moredesirable than chemical or pharmacologi-

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Dr. Larry Bramlage

cal treatment which we use today. That'show your grandchildren will treat theirhorses. How fast and how well we get there

depends upon how well we fund theresearch and how fast we make theprogress.

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CURRENT RESEARCH

Dr. Douglas Antczak

Dr. Douglas Antczak: Good morning. It's agreat pleasure to be here and I want tothank The Jockey Club for inviting me torepresent my fellow scientists who work onthe Horse Genome Project.

Racing, breeding and science itself aregoverned by a series of probabilities and,in many cases, improbabilities. This articlecame out in the Science section of The NewYork Times in May of 2001 and if you hadasked geneticists how likely it was that theHorse Genome Project would be featuredin The New York Times in January of thatyear, they'd say it's about as likely asMonarchos breaking Secretariat's record inwinning the Derby a couple of months laterin May. But things like this happen.

Now, I reckon the Oxleys and theWards were believers and they thoughttheir horse could do it…and the peoplewho work on the Horse Genome Projecthave had that same kind of belief andthey've worked with a very small budget ona very large project and I want to tell yousomething about our successes over thelast seven years.

When a mouse or a fruit fly geneticistthinks about studying horse genetics this iswhat they think about…{slide} an animallike this throwing off a rough stockrider…Horses are very large, they'reexpensive, they have a long gestation, theyhave no litters, they kick, they bite…thereare a dozen reasons why you'd never wantto study horse genetics if you're a geneti-cist.

But if you're a horseman, there are athousand reasons why you'd want to studyhorse genetics, and they're embodied inthis slide right here which shows the threefoundation sires which led in a couple hun-dred years to Carson Hollow and You inthat wonderful battle in the Test Stakes acouple of weeks ago.

Now this is a plug for New York-bredsbecause Carson Hollow was foaled abouttwo miles from my house at the PurdyFarm, and I can tell you the Purdy's havebeen working in genomics for the past 10

Dr. Larry Bramlage: Now if you study all of the genes in all of the chromosomes, you'restudying the genome…or you have genomics. Dr. Doug Antczak is an expert in that areaand he's going to tell us about that field. He's a Cornell graduate…a Penn veterinaryschool graduate…a Cambridge Ph.D.

Besides being a polo player at Cornell, he is now the director of the Baker ResearchFoundation and the Havemeyer professor of surgery. Dr. Antczak…

or 15 years. They're breeding horses, mak-ing crosses to select for characteristics thatare determined by multiple genes. They'reconsidering all the genes of the organism atthe same time. And any of you out therewho've bred horses, you're doing the samething…we're working in the samefield…we just don't call it the same name.

The Horse Genome Project consists ofabout 20 laboratories around the world andthis {slide} is their locations…about 120scientists altogether who are collaborating.And collaboration for scientists is unusual.Scientists are about as competitive as own-ers, trainers and jockeys…but the HorseGenome Project is such a large undertakingand it's so complicated that we've bandedtogether and divided ourselves up and havetaken bits of the project and have broken itup so that we can make fasterprogress…and that's what we've done.

In the same way, some funding agencieshave banded together to provide us with theinitial funding that's been necessary. It waskick-started by the Dorothy RussellHavemeyer Foundation which provided anumbrella grant and a challenge grant in1995 and this has been supplemented byfunds from the Department of Agriculture,Grayson-Jockey Research Foundation Club,the New York State Zweig Memorial Fundand other agencies around this country andaround the world and it's working reallywell so far.

Now, this slide shows the differencebetween genetics and genomics. Genetics isa relatively simple subject these days and itrelates to the inheritance of single genes,like the kind that cause eye color or, inmost cases, coat color, or some of theblood groups. Genomics considers theaction of all the genes of the genome at thesame time…{slide} and here's a cell, as

Larry spoke to you about so well a few min-utes ago…here are the chromosomes…and here's an unraveled chromosomewhich has its DNA strand out here andthere's a gene down in this part right here.

The Horse Genome Project's goal is tounderstand all of the genes of the horse sothat we can study them and consider theireffects in single experiments and singleundertakings.

To do this, we've tried to parse thegenome, or reduce it, to a manageable size,and we've done it by breaking it down bychromosome. {slide} These are all thehorse chromosomes…a picture or pho-tomicrograph of the chromosomes…thereare about 30 of them. And in the horsegenome there are about 30,000 genes andthey're encoded in three billion bits ofinformation.

Now three billion is too big a numberfor most of us to understand…only peoplelike Bill Gates can understand those num-bers with his financial resources. If you takea single horse chromosome, it'll containabout 100 billion bits of information andonly about 1,000 genes…and that's a verymanageable number. It's not billions andbillions, it's just 1,000.

A single horse gene might occupy a tinylittle line on that chromosome and it wouldtake only about 5,000 of these bits of DNAinformation. So the Horse Genome Projectscientists are parsing and reducing thehorse genome to manageable bits of infor-mation that we can understand.

In 1995 there were only about 20 genesidentified and mapped. There was nounderstanding of the overall organization ofthe horse genome and no comparisons pos-sible with gene maps of other species. Nowin 2002, we can take each horse chromo-some and tell you that there are a number

29

of linkage markers on each chromosome. And if you think of a chromosome like aninterstate highway, the linkage markers arelike the exit signs…and the genes, the bitsof the DNA which actually perform tasksand make proteins…we also know thelocation of some of those. And they'relinked to these anonymous markers whichyou don't really need to know about for thisproject but they're important for having usmake our maps of the horse genome.

There are over 500 mapped markers inthe horse genome…many on every chro-mosome…many, about 500 more, beingcharacterized. There are about 300 physicalgenes that are mapped and that numberincreases weekly. There are about 3,000genes that have been sequenced and thatnumber is increasing daily.

We've also developed a comparativemap which compares the organization ofgenes in the human and the horse chromo-somes. That's shown here {slide} and it'svery hard to see because it's so small butyou can see the different colors, I think.This shows all of the horse chromosomesand the different colors represent genes ofthe human genome that are found togetheron single horse chromosomes.

And the important thing is that mosthorse chromosomes are not a mosaic likethis one. This one has genes from four orfive different human chromosomes. Most ofthe horse chromosomes have only a singlecolor on them which means the genes onthat horse chromosome can be foundtogether on a comparative, or homologous,equivalent human chromosome. That meansthat the gene order has been maintainedbetween horses and humans for over 20million years. And we can use much of theinformation from the Human GenomeProject to study the horse genome…and

that's been very important for us.This is the kind of magazine you buy

when you're in the checkout line at the gro-cery store. This is August 18, 1992, and it'stheir predictions and prophecies issue ofThe Sun. Now, if you'd read that the HorseGenome Project was going to make greatstrides in the next decade and that there'dbe genetic tests available for severe com-bined immuno-deficiency of Arabians…forHYPP, the muscle disease of QuarterHorses…and for lethal white of PaintHorses…you'd believe that about as muchas you'd believe all the other propheciesthat they'd make in that same issue.

But right now, horse owners in thesebreeds can test for those simple genetic dis-eases. You've got to suspend your disbeliefand believe that science is making enor-mous progress and that rate of progress iscontinuing faster than we can comprehend.

There's a promise in equine genomicsbut it's going to be relatively hard to fulfillbecause the problems that are left for usare difficult ones. There are very few simplegenetic diseases in horse breeds and, inparticular, in the Thoroughred. MostThoroughbred traits that we're interested inare determined by multiple genes actingtogether and that's why we need to know allabout the genes of the horse…thegenomics of the horse in order to studythem.

But genomics can be applied to infec-tious diseases through studies of vaccinesand making better vaccines…West NileVirus is a current threat. In lameness wecan work on arthritis…and Larry spoke abit about gene therapy and its use in gettinghorses back to racing form earlier oncethey've been injured. There are applicationsin cancer…and this is a condition in horsescalled sarcoid which many of you may have

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seen in your horses. In reproduction thereare many applications including MareReproductive Loss Syndrome…and, on amore global scale, there are the areas ofnutritional genomics and physiologicalgenomics of performance which can helpus understand how to condition and trainhorses better to keep them sounder forlonger. You might recognize that horse inthe picture too…some of you might.

My own research is involved with howthe fetus escapes destruction by the moth-er's immune system during pregnancy andit involves a consideration of gene regula-tion in the placenta, that interface betweenthe mother's uterus and the fetus.

A second area of interest in my labora-tory is the maternal grandsire effect. We'retrying to understand why certain stallions,like Secretariat, are known more for siringdaughters that can produce runners thanfor producing a first generation runner. Princequillo, as you probably know, wasone of the leading sires of broodmares inthe early 1970's…he producedSomethingroyal who was the dam of

Secretariat and of course Secretariat'sdaughters now are sought over throughoutthe world.

We don't understand the genetic basisfor this…how a performance trait can skipa generation and flip-flop back and forthbetween the male and female line…but wehave some hints as to how this might occur.

So finally, in closing, I just want to saythree things about the promise of equinegenomics.

First of all, genomics holds the poten-tial to help us breed sounder horses. Thiscan decrease wastage in the Thoroughbredindustry…it can increase our economicbottom line…and it can increase our imagewith the public.

Second, genomics can help us developbetter therapeutics and medicines that canhelp us treat the horses who do get injuredalong the way.

And the third thing I want to say is thatwe scientists can't do it alone. We've had alot of help from the industry and we'regoing to need more. Thank you.

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INTERMISSION

Ogden Mills Phipps: Thank you, Larry and Doug. We're going to show our traditionalvideo from the NTRA and then we're going to take a very quick five-minute break.

Tim Smith: Thank you, Dinny. As you can see, the NTRA and

Breeders' Cup now spend just under $60million per year, mostly on marketing --and, of course, purses -- along with otherindustry priorities like legislation.

Fundamentally, the industry's strategyof raising the profile of Thoroughbred rac-ing is working. With increased andimproved television exposure, public inter-est in horseracing, predictably, has grown.To turn interest, which is good, into rev-enue, which is essential, a range of market-ing tactics is used...from co-op advertising,with our members, to promotions likecharity wagering with Don Imus, to directmail programs.

We are now adding corporate sponsorsat an encouraging pace, and two or threemore should be joining this list in comingweeks. As you'll hear in a few minutes, theNTRA's legislative efforts also remain veryactive. NTRA Purchasing is growing steadily,saving our members real money while pro-ducing new sales to our marketing part-ners.

It bears repeating from time to time,that really all of this progress links to the

same, rather unusual level of industrycooperation that led to the formation of theNTRA. As demonstrated by our combinationwith the Breeders' Cup last year, muchmore can be accomplished if this big,important industry--and resurgent sport--sustains its commitment to working togeth-er.

As part of this update, I'd like to high-light two of the most important lessonswe've learned--or re-learned--during ouryoung life.

First is the multi-faceted power ofnational television. You've just seen theinter-related results of more visibility andnew public interest. Increasingly, we're alsoseeing that nationally televised races resultin higher handle and, thus, in related pursegrowth.

So we're especially pleased with tworecent agreements. First, we will beexpanding our summer racing tour on CBSnext year to four straight weeks, runningfrom mid-June on consecutive Saturdayafternoons from 5-6 p.m. Eastern time untilmid-July.

Earlier this month, we also reached animportant agreement in principle with

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Ogden Mills Phipps: The NTRA, in five short years, has made immense progress in mar-keting our sport. Tim Smith and his staff are to be commended for these efforts.

And while they continue to make important strides in this country, they are alsolooking abroad. Emerging technology continually makes this a smaller planet...andcooperative global initiatives can and will benefit Thoroughbred racing the world over.

To tell us about some of those international efforts, and to update us on the NTRA'sdomestic progress as well, it's a pleasure to welcome back to the Round Table theCommissioner of the NTRA, Tim Smith.

THE GLOBALIZATION OF RACING

NTRA/BREEDERS’ CUP LTD. OVERVIEW

ESPN that extends its significant program-ming commitment to Thoroughbred racingthrough 2008, their longest commitment toany sport besides the NFL.

Happily, I can also report that oursummer ESPN ratings are significantly upthis year, as much as 50 percent. And, withnews of TVG's recent ratings in connectionwith Fox Sports, this pattern also is holdingtrue for regional coverage, which is goodnews to our sponsors.

The second major lesson learned is thestrategic importance and untapped poten-tial of the Breeders' Cup and the relatedraces that directly connect to it. Together,they provide context and continuity, givingour fans both a much-needed road map tofollow the game and then, of course, a ter-rific conclusion.

As you'll recall, tactics were launchedlast June to help stake out the Breeders'Cup's rightful territory: In short, the bestsingle day of horseracing anywhere in theworld.

So what happened? The national andinternational media responded as wehoped. Sponsor interest increased, as weexpected. World championships are inher-ently compelling. Global events appeal toglobal brands.

All of which leads to our assigned topicthis morning. In racing and breeding, likemost other industries today, the world isbecoming a much smaller place. Horse-racing is one of those sports, like golf anda few others, that crosses national bound-aries with relative ease…plainly a potentialstrategic advantage.

In our time this morning, we'll touchon just two aspects of the globalization ofracing:

· New marketing opportunities; and· New wagering opportunities…or,

more precisely, what we see as someremovable barriers to the ladder.

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Tim Smith

MARKETING OPPORTUNITIES FOR THE BREEDERS’ CUP

D.G. Van Clief, Jr.: Thank you, Tim, andgood morning everyone.

We have undeniably arrived at a pointwhere the combination of a shrinkingworld and the value of racing's premierevents presents us with a global marketingopportunity.

During its initial 19 years, theBreeders' Cup has developed assets and

relationships that now allow our joint oper-ation with the NTRA to capitalize on thisopportunity.

The partnership with NBC Sports,extended through 2005, has expanded tocarry the World ThoroughbredChampionships to more than 150 countriesannually. And our partnership in the WorldRacing Series puts us in regular touch with

Tim Smith: To discuss the first of these, the global marketing picture, it's my pleasure tointroduce D.G. Van Clief.

major racing events and authorities aroundthe world.

Our simulcast signal has taken theevent live to Europe, South Africa andSouth America, with France's Pari MutuelUrbain offering commingled pool wageringfor the past five years.

Breeders' Cup sponsors historicallyhave included corporations with globalreach, such as DeBeers, Piaget, Anheuser-Busch, Mumm Champagne, Delta andEmirates Air Lines. And, of course, we havehad great support for the event itself fromowners, breeders, and racing fans aroundthe world.

Re-branding the event last June as theBreeders' Cup World ThoroughbredChampionships was a first step. We havesince rolled out Phase Two of the re-brand-ing, which was announced early this sum-mer. It includes:

World Thoroughbred Rankings, pre-pared by an international panel of handi-cappers and racing secretaries. Theserankings of the world's top 10Thoroughbreds in each of the Breeders'Cup divisions appear weekly in leadingnewspapers, including USA Today as well

as our industry trades. They're also usedduring NTRA's "Road to the WorldThoroughbred Championships" telecasts tohelp fans make sense of who's who in eachdivision.

We've integrated new wagering prod-ucts into our overall strategy, particularlyfor our televised races, as well asEquibase's new handicapping product, theVirtual Stable, which Alan Marzelli dis-cussed this morning. Breeders' Cup willoffer a new wager this year, Head2Head,challenging fans to pick which of two hors-es will finish ahead of the other. OurHead2Head bets on Breeders' Cup day willfeature "Europe versus America" in at leastone of the three turf events - a mini RyderCup within the race.

We're also pleased to announce anagreement in principle with "At the Races,"the new racing television network andwagering service for the United Kingdom. Itwill provide television coverage and com-mingled pari-mutuel wagering on theWorld Thoroughbred Championships. "Atthe Races" will broadcast all eightChampionship races via Sky DigitalTelevision. The Sky programming will beaugmented by Channel 4's "Morning Line,"Britain's horseracing show that airs to anaudience of one million viewers. It willspotlight the Breeders' Cup in programsairing on October 19 and on Breeders' CupChampionship day.

With thanks particularly to LordHartington and his management team atAscot, we've also cemented a strategic mar-keting alliance with Ascot Racecourse andLongchamp Racecourse in Paris. This newrelationship enables us to cross-promoteworld-class racing, beginning with RoyalAscot in June and concluding with theBreeders' Cup.

D.G. Van Clief, Jr.

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Selected Group races from Ascot willbe linked with the relevant Breeders' CupWorld Thoroughbred Championships racesthrough the newly created Ambassador'sCup. The owner of any winner of a desig-nated race at Ascot, which, in the sameyear, wins a World ThoroughbredChampionships race will be presented atrophy by the United States Ambassador tothe Court of St. James. That presentation isplanned to take place at Royal Ascot thefollowing June.

Additionally, key European races thathave traditionally produced Breeders' Cuprunners, such as the Arc de Triomphe andthe Queen Elizabeth II Stakes, will be inte-grated into the "Road to the WorldThoroughbred Championships" broadcastson ESPN, CBS and NBC. This year, our tele-casts include 16 races from England,Ireland, Germany, France, Hong Kong,Singapore and Canada. Our weekly ESPNmagazine show, "Wire to Wire," also fea-tures international races and the WorldThoroughbred Rankings.

The races from Ascot and Longchamp,which are featured on our "Road to…"telecasts, serve two roles. First, they help useducate American audiences about oursport as it's played in other parts of theworld. Second, they help reduce what werefer to as "the Johnannesburg effect,"which occurs when top-class runners fromoverseas come into the Breeders' Cup as avirtual unknown to many of our Americanracing fans.

Most importantly, the alliance allows us

to provide corporate partners with accom-modations, exposure, and sales opportuni-ties, both here and abroad. As we reach outto sponsors, it's essential that we provide atrue global presence through packagedmedia and on-site hospitality. We also mustdeliver a global consumer audience.

With horseracing in 53 countries, oursport has widespread popularity as enter-tainment. It's the second-most popularsport by attendance in Australia, the third-most popular spectator sport in Japan anddraws cumulative audiences of more than450 million for telecasts in England.

As a whole, racing offers an excellentprospect for global sponsors. Already,we're exploring the possibility of extendingNTRA's group purchasing through our affil-iates in other countries, including theBritish Horseracing Board.

Worldwide, we have an enormousinfrastructure of owners, breeders andother industry personnel. In England alone,horseracing and wagering support 100,000jobs. Through the Breeders' Cup and, nowmore broadly, through the NTRA-Breeders'Cup-Ascot-Longchamp alliance, we canreach a global audience of world-class con-sumers: our own industry members.

Over the course of the next fewmonths, we expect to announce severalnew marketing partnerships in which welink Breeders' Cup, NTRA and their interna-tional partners in sponsorship and grouppurchasing programs to benefit our indus-try and our partners.

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D.G. Van Clief, Jr.: And now to provide his perspective on the globalization of racing is LordHartington. He is a former Senior Steward and Chairman of the British Jockey Club, servedas the first chairman of the British Horseracing Board, and currently serves as her Majesty'sRepresentative and Chairman of the Ascot Authority. He is no stranger to many of you in thisroom and, it is a great pleasure to welcome him back to this conference…Lord Hartington.

Marquess of Hartington CBE: Thank you,D.G. Good morning ladies and gentlemen.And may I say what a great honor it is forme to be here again at The Jockey ClubRound Table…what a pleasure it is to beback in Saratoga…and how good it is to bewith so many old friends.

I am here as your guest, of which I amextremely grateful, and on behalf of AscotRacecourse. I am here to add the Ascotperspective on the globalization of racing.

Why do we need to globalize? It's veryexpensive; it takes time, money andresources; it has all sorts of language andcultural problems; and anyway, it workedquite well before, didn't it? The sport ofkings…open the gates, preferably made ofgold, and let the customers roll on in.

Do we really need this globalization?Does it mean transporting horses in unsuit-able climates on different surfaces with dif-ferent rules on medication, ridden by eithertheir familiar jockey who does not knowthe track or by a local champion who doesnot know the horse or understand thetrainer's instructions?

With a few exceptions, most of whomwill have already won at Royal Ascot…lastyear we had Johannesburg…we had BanksHill…we had Fantastic Light. There is notyet a proven route to stardom. And star-dom? Global champs? Sheikh Mohammedunderstands…Coolmore understands…Mr. Yoshida understands…GeorgeStrawbridge and a few other of your coun-trymen understand.

But how many trainers feel they needthis globalization? They want their owndomestic Group One's and the prizes thatgo with them. There is no internationalranking for trainers, owners or jockeys.

Only very recently, as we've justheard…and at last we do have a globalclassification of horses, but that's all so far.

But it is, at least, a start.Or, ladies and gentlemen, does this

globalization mean grabbing headlines inoverseas media? Interviews with JerryBailey when he has won at Royal Ascot, orFrankie Dettori in Dubai, or, most memo-rably, Lester Piggott at Belmont. These andother similar excitements take racing intothe news pages. Even, occasionally, ontothe front pages.

Godolphin, Ambassador Farish,Sunline, Sir Alex Ferguson…these andother international names help and we'regetting there, but racing doesn't have itsTiger Woods yet.

I can't talk for British or European rac-ing except through the eyes of AscotRacecourse.

We don't have a D.G. or a Tim Smith.We don't even have Les Benton from Dubai.But I am glad to say that we do have PeterSavill. Peter Savill is the Chairman of Britishracing's governing body, the BritishHorseracing Board. And Peter Savill doeshave a globalization vision and an itty-bittycentral marketing budget to promotehorseracing nationally. We've had it for twoyears only.

We at Ascot do also believe in the glob-alization of horseracing. Not because it willget tens of thousands of Americans payingto come into the racecourse, welcome asyou all will be. We want racing to be seenas an international sport for two main rea-sons…

Firstly, we wish to attract internationalsponsors…stronger, bigger, better spon-sors than hitherto.

THE ASCOT PERSPECTIVE ON GLOBAL MARKETING

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At Ascot we have DeBeers, the SouthAfrican diamond trading and mining con-glomerate. DeBeers have been sponsoringour championship 1 ½ mile all-aged racefor 31 years. This sponsorship startedbecause the late Sir Philip Oppenheimerwas a great race fan and involved as anowner-breeder. Now it is serious businessfor DeBeers.

When I told Anthony Oppenheimer,who runs sponsorship for DeBeers, aboutthe Emirates sponsorship of the EmiratesWorld Series Racing Championship, I wasworried that he might think that his "own-ership" of "Diamond Day" that his familycompany had invented and nurtured, mightbe diluted. Not at all…he couldn't wait tocall his marketing director who was asthrilled as Anthony.

DeBeers saw this as a wonderful piggy-back into eleven other major Internationalraces and a higher global profile for "their"race. I instantly realized we should havebeen charging them rather more!

The next year they took a fabulous dis-play of Millennium Diamonds to Dubai andshowed them off at a wonderful party thenight before the Dubai World Cup. Thatevening I was well aware of the benefit thatAscot was getting from its close associationwith DeBeers. DeBeers would not havebeen hosting that party in Dubai at thattime without their association with a leg ofracing's World Series. Both parties werewinners.

Six weeks ago, at Royal Ascot, D.G. VanClief, Louis Romanet and I announced a tri-partite alliance among Breeders'Cup/NTRA, Longchamp and Ascot. Thethree events will now be linked closer thanever and form part of the "Road to theWorld Thoroughbred RacingChampionships." I know that benefits will

accrue to the three parties in all sorts ofways and, in fact, there are already twointernational businesses talking seriously tothe three of us…which is not bad going injust six weeks.

The excellent work that NTRA is doingto raise awareness of the Thoroughbredindustry here in the U.S. and the workbeing similarly done by Peter Savill's teamat home is important to us at Ascot. Wecannot afford a continuing national cam-paign, although we do promote our ownrace days pretty energetically to our domes-tic market.

Don't forget that our income stream isvery different from, say, Saratoga's. Only sixpercent of our total annual turnover comesfrom the off-course betting handle. Putanother way, Ascot gets under one percentof the off-course betting turnover for whichwe are responsible…not much, I know,but over the years we have learned to livewith it. It has, at least, forced British race-courses to look for other and additionalrevenue streams.

So these national marketing campaignsare important to us because they makehorse racing worldwide desirable, attrac-

Marquess of Hartington CBE

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tive, "the thing to do," "the place to go,""the sport to watch." We like to think thatracing at Ascot strongly reinforces thesemessages. That brings me to the secondreason why Ascot is so supportive of glob-alization of the Thoroughbred industry.

Ascot's brand, our ethos, our image,whatever, is to a degree known in the U.K.and we are working on that. Here, or inNew York, or in Tokyo, in Milan, LosAngeles…I'm not so sure. Ascot, isn't thatsomething you tie around your neck?

So we are working on this lack ofawareness. We want to expand the RoyalAscot brand into markets beyond thosewho wish to go to a field in Berkshire towatch beautiful horses race from the dimdistance to a funny little red stick.

As I have said we do not benefit direct-ly from wagering on our product to a sig-nificant degree, so expanding the wageringmarket is not a high priority for us. Ourbrand, however, belongs to us and we seepotential to earn from that brand. The lux-ury market is not at its best just now but wedo believe that over time and with the rightadvice and commitment from ourselves it isa market we should be and will be in.

But to the shoppers on Bond street, onMadison Avenue, on the Faubourg St.Honore, in the Ginza district, when they seea window of "Royal Ascot Since 1711"products, we want them to know that labelmeans smart, stylish, maybe a little conser-vative but certainly aspirational, and defi-nitely top quality.

This brand extension is going to be along process and a difficult one. Just have alook next time you are in a major city, seehow many shops sell perfume, watches,hand bags, ties and ask yourself how long itwould take to establish a brand to competewith these household names.

But we do believe that we can succeed.

We think that the Royal Ascot brand is areally strong one and we intend to establishit gradually all over the world. We intend tobecome a global luxury brand but we willnever lose sight of our core business, andthat is the racehorse.

Since Royal Ascot, our flagship meetingheld in June every year and this yearattracting over 300,000 racegoers duringjust five days, we have launched the plansfor our major redevelopment of the trackand facilities, which will be by far the mostsignificant and extensive ever seen on aEuropean racecourse.

Ascot is investing £180 million to cre-ate the finest arena possible for the sport.As the action on the track becomes global,it is essential that the facilities for horses,jockeys, owners, sponsors and, of course,racegoers, meet the expectations of thenext generation of global sports fans.

There are plenty of reasons for us tobe optimistic for the future of racing at andin the ever-shrinking world in which weoperate. The sport is played on a trulyinternational stage now and it is Ascot'sintention to ensure that it remains a majorplayer on it.

The efforts of Breeders' Cup/NTRA area significant pillar supporting the rapidlyexpanding edifice that is global racing. Iam sure that our recent alliance is only abeginning.

Globalization of horseracing is happen-ing, and we want to be a part of it. Theobstacles are formidable but not so great inreality as they appear in some people'sminds. With the leadership you have hereand we too at home…with the greaterawareness of the tangible benefits of inter-nationalization…we are pushing at anincreasingly open door.

Thank you.

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Greg Avioli: Thank you, D.G. and LordHartington. Good morning everyone.

Over the past year, we have focusedour efforts in Washington on passing newlegislation to allow for the export ofAmerican racing to the world market.

Remarkably, while the U.S. runs twiceas many races as any other country andoffers some of the highest quality racing inthe world, of the $85 billion internationalU.S racing gets less than one percent ofthat.

We believe there are two primary rea-sons for this. The first is an IRS require-ment that U.S. racetracks withhold 30 per-cent on all winning bets placed outside theUnited States. This tax is a direct disincen-tive to wager into U.S. betting pools, as theforeign bettor receives 30 percent less onany wager placed into American pools thanhe would otherwise receive.

For example, last year Canadians bet$700 million on American races. However,

none of that money came into U.S. bettingpools. Instead, the Canadians created theirown wagering pools with smaller participa-tion and less attractive odds and payoutsthan would be available had they wageredinto American pools without the 30 percentwithholding. To address this issue, our lob-bying team in Washington has successfullyintroduced new legislation, H.R. 4474,which would eliminate the 30 percent with-holding for all countries.

We have received bipartisan support inboth the House and Senate for this legisla-tion and remain optimistic that it can beincluded with other tax legislation that'sexpected to pass Congress most likely inthe lame duck session after the Novemberelection.

We believe this legislation will have animmediate and positive impact on wageringinto U.S. pools. For example in France,which currently has a special tax treaty withthe U.S. that eliminates the 30 percent with-

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D.G. Van Clief, Jr.: Stoker, thank you. Even though our industries do have different bet-ting infrastructures, it's obvious that horseracing on both sides of the Atlantic needs todiversify and strengthen its revenue streams.

Ascot's commitment to gaining new sponsors and extending the Ascot brand globallyare very much in line with what the NTRA is working to accomplish on behalf ofAmerican racing. No doubt there are more than a few in this room who would welcomenew revenues to supplement the pari-mutuel income stream.

However, as long as handle remains the key indicator for the North American indus-try's health, we have to pay close attention to the laws and regulations which govern it. Inparticular we are focusing on the potential to access what is now a $100 billion annualbetting market for horseracing, of which 85 percent lies offshore.

Here to give you an update on the legislative challenges and opportunities forexpanding global wagering is NTRA Deputy Commissioner Greg Avioli who does ourheavy lifting in the legislative arena.

Greg…

GLOBAL WAGERING OPPORTUNITIES

holding requirement, wagering on U.S. rac-ing has steadily increased. Last year'sBreeders' Cup…$2.2 million came into thepool from France, with more than two per-cent of the overall handle on the event.

But, as I noted before, there is an evenmore significant barrier to internationalwagering that also must be addressed. Many of the world's major racing marketscurrently have laws that prohibit wageringon horse races in other countries.Wagering in these countries that prohibitwagering on U.S. races currently accountsfor well over half of the total world market.

Changing these protectionist policiesand laws will require a multi-year commit-ment by the U.S. racing industry, as well asby the U.S. government, through tradeenvoys and trade missions. It will alsoinvolve working closely with our partners at

other international racing authorities todevelop mutually beneficial solutions toexpand worldwide wagering. We do notexpect that this will be easily done, butconsider…if over the next decade we areable to capture five percent of the interna-tional market, that would increase U.S.wagering pools by at least $4 billion, 25percent of the entire handle domestically,right now.

An important corollary of this entireissue is the continuing need to educatemembers of Congress and the administra-tion on the importance of the Thorough-bred racing and breeding industry to theU.S. economy. We have grown theCongressional Horse Caucus, announced atthis conference last year, to more than 30representatives from 15 states. We holdregular meetings to brief members of Congress and their staffs on our issues. Andwith funds raised through the NTRA ¼ per-cent voluntary auction program and therecently announced NTRA Political ActionCommittee, we are now in the position tomake necessary contributions to federalcandidates and parties to put racing on amore equal footing with our competition inthe gaming and entertainment industries.

In closing, I would like to thank thoseof you who have participated in the NTRA'svoluntary programs. Your continued sup-port will enable the NTRA to move forwardwith these international initiatives. Thankyou very much.

Greg Avioli

SUMMARY AND CONCLUDING COMMENTS

Tim Smith: Films, popular music, a num-ber of consumer brands and several othersports all share some common traits withThoroughbred racing: They require largecapital investments; they face lots of com-petition for the entertainment dollar; and,thus, they've come to increasingly rely on

non-domestic revenue to help cover theirhigh costs.

Racing, for these same reasons, has lit-tle choice but to embrace the global mar-ketplace.

As we've heard, American racing inter-ests must work together to remove the U.S.

40

tax barriers to new international revenuegrowth, then expand efforts to remove theforeign trade barriers that also restrict thedevelopment of American horseracing asan export product.

Starting with the Breeders' Cup andour partners at Ascot and Longchamp, andour friends at the World Racing Series, theleading events in the world need to worktogether -- even more closely than they donow -- to boost worldwide media, sponsorand fan interest in a game whose appeal ismost definitely global.

When the Irish fans at Belmont jumpedonto the track waving their country's flagafter the Bessemer Trust Breeders' CupJuvenile last year, we saw, I think, a glimpseof what racing can look like at the highestlevels of quality, competitiveness andfriendly rivalry.

Now, Lord Hartington would tell youthat the result of that race and several oth-ers on the day easily could have been fore-told…simply by following Ascot earlier in

the year. Well, fair enough.But we're in New York today, not

Newmarket, so naturally we'll end withanother race on that wonderful card--indeed, the final race that chilly afternoon--and Tom Durkin's unforgettable call. {Video of Tiznow's victory in the 2001Breeders' Cup Classic}

That one was so good, we had to showit to you twice today. I also want to mentionthat there is a particularly interested spec-tator in row 8 that I think we ought toacknowledge…Tiznow's rider and all-timegreat, Chris McCarron.

Fans and customers--including the newones we all seek--want to invest theirscarce time and entertainment budgets inevents that matter and connect to eachother…in competitors they've heard of andseen before…in the best a sport has tooffer, preferably, in world championships.As you've heard, we're on the cusp of newand better ways to give them exactly that,and extending the benefits to the industryas a whole. Thank you.

Ogden Mills Phipps: Thank you, Tim. Today, we've heard reports on a wide range of industry topics. In some respects, they

are very different but in another, they are very much the same. Each of them reflects asincere "commitment" by organizations and individuals, people who appreciate andbelieve in our sport, people who believe they can and will make it better.

I would ask each of you in this room to lend support to their efforts in any way youcan. When these programs mature and succeed, our sport will flourish and we will allbenefit.

There could be no better legacy for the 50th Round Table Conference. Thank you all for coming. We'll see you at the 51st conference next year.

CLOSING REMARKS

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RegistryThe primary responsibility of The Jockey Club is tomaintain The American Stud Book in a manner whichensures the integrity of the breed in North America.

http://home.jockeyclub.com

TECHNOLOGY CREATING EFFICIENCIES

Following the successful transition toDNA typing for parentage verification withthe foal crop of 2001, which required theadditional re-typing of some 70,000 stal-lions and mares, the Registry seeks to cre-ate additional efficiencies in foal registra-tion for owners and breeders throughoutNorth America.

With more than 14,700 users, JockeyClub InteractiveTM enables completion ofthe entire registration process, except forDNA typing, over the Internet. The serviceeliminates several manual processing stepsthat can affect turnaround times, as well asthe time lag inherent to traditional mail,resulting in quicker issuance of Certificatesof Foal Registration.

As the user base has grown, so too hasutilization. In 2001, Jockey ClubInteractiveTM was used to submit 58% ofname claims; 48% of mares bred; 43% ofLive Foal/No Foal Reports; and 17% ofapplications.

In addition, digital foal identification

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108th Annual Report of

THE JOCKEY CLUB& Related Organizations

For more than a century The Jockey Club has pursued its goal as an organization dedicated tothe improvement of Thoroughbred racing and breeding, earning recognition as an industryleader through its competence and, in recent years, technological expertise.

www.jockeyclub.com

TTHHEE JJOOCCKKEEYY CCLLUUBB(tax-exempt non-stock membership corporation; governed by board of Stewards)

TTHHEE JJOOCCKKEEYY CCLLUUBBTTEECCHHNNOOLLOOGGYY SSEERRVVIICCEESS,, IINNCC..

(wholly owned subsidiary)

TTHHEE JJOOCCKKEEYY CCLLUUBBRRAACCIINNGG SSEERRVVIICCEESS,, IINNCC..

(wholly owned subsidiary)

TTHHEE JJOOCCKKEEYY CCLLUUBBHHOOLLDDIINNGGSS,, IINNCC..

(wholly owned subsidiary)

EEQQUUIITTYY IINNVVEESSTTMMEENNTTSS &&AAFFFFIILLIIAATTEEDD OORRGGAANNIIZZAATTIIOONNSS

(all tax exempt)

EEQQUUIIBBAASSEE CCOOMMPPAANNYY,, LLLLCC(general partnership)

AAXXCCIISS TTRRAACCKKMMAASSTTEERR(wholly owned subsidiary)

IINNCCOOMMPPAASSSS SSOOLLUUTTIIOONNSS,, IINNCC..

(wholly owned subsidiary)

TTHHEE JJOOCCKKEEYY CCLLUUBB IINNFFOORRMMAATTIIOONN SSYYSSTTEEMMSS,, IINNCC..

(wholly owned subsidiary)

NNTTRRAA IINNVVEESSTTMMEENNTTSS,, LLLLCC

TTHHEE JJOOCCKKEEYY CCLLUUBBFFOOUUNNDDAATTIIOONN

GGRRAAYYSSOONN--JJOOCCKKEEYY CCLLUUBBRREESSEEAARRCCHH

FFOOUUNNDDAATTIIOONN,, IINNCC..

photos for more than 3,500 horses weresubmitted through the service in 2001 afterthe capability was added earlier in the year.To encourage submission of digital photos,the Registry, in conjunction with the NTRA,is testing digital cameras with farms inCentral Kentucky to determine the bestmodel(s) for use by breeders.

Regardless of the method of submis-sion, all foal identification photos beginningwith the 2002 foal crop will be stored elec-tronically, which will improve processingtimes and reduce storage space and cost.

Utilization of Jockey Club InteractiveTM

is expected to grow as more owners andbreeders become comfortable with thetechnology and also as a result of the ser-vice’s integration with the recently launchedequineline.com Farm Program. Through aseamless interface, farms can communicatepertinent breeding and foaling informationto the Registry while simultaneously updat-ing their Thoroughbred portfolios.

The Jockey Club Information Systems,Inc.The Jockey Club Information Systems, Inc. (TJCIS), incor-porated in 1989, is a wholly owned subsidiary of TheJockey Club Holdings, Inc. All profits from TJCIS activitiesare re-invested in the Thoroughbred industry, helping tostabilize registration fees and fund industry projects.www.tjcis.com

PROVIDING INFORMATION & MANAGEMENT TOOLS

As a leader in the provision of technol-ogy and information services to industryprofessionals, The Jockey Club InformationSystems, Inc. (TJCIS) effectively serves thebreeding, racing and sales communitiesthrough its three divisions - InformationServices, Cataloguing and Software Salesand Consulting.

The primary focus of InformationServices continues to be expansion of serv-

ices offered through equineline.com (pro-filed below).

In support of its ongoing commitmentto provide equineline.com customers andthe industry at large with the most compre-hensive information, TJCIS augmented itsinternational database in April with detailedracing and breeding information fromBrazil. In addition, several new productshave been added to the equineline Reportsservice, including a Premium EditedPedigree which more closely resembles asales catalogue page.

The Cataloguing Division once againwrote more than 27,000 catalogue pagesfor client sales last year, despite a decline insales entry levels due to MRLS.

The Software Sales and ConsultingDivision has spent much of the past 12months developing the equineline.comTrainer and Farm Programs. The Divisionhas also re-designed the national HBPA’sweb site in a manner that provides affiliateswith a low-cost entry point for having theirown site under the national’s banner.

equineline.comequineline.com, launched by TJCIS in December 2000, isan Internet-based information and communication net-work for owners, breeders, trainers and farms.

www.equineline.com

TRAINER & FARM PROGRAMSLAUNCHED

Established as a comprehensive Internet-based information network that would revo-lutionize how industry professionals managetheir equine interests, equineline.com hastaken several important steps toward fulfill-ment of its vision in 2002.

Already featuring a Portfolio Service forowners and breeders and the full slate ofequineline Reports for Thoroughbreds andAmerican Quarter Horses, equineline.com

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expanded this year to include a TrainerProgram and Farm Program. Both providean extensive set of management tools thatsimplify the many business-related details oftraining and breeding operations.

The Trainer Program, launched inFebruary, contains progressive and innova-tive features that allow trainers, along withtheir assistants and bookkeepers, to stream-line and in many cases automate the admin-istrative tasks of their profession, includingbilling, accounts receivable, charting andowner communication. Based on the infor-mation entered for each horse, the programwill automatically calculate and produce avariety of reports upon request, includingbilling statements and percent-of-earningsreports.

The Farm Program, launched earlier thismonth, operates similarly and is suitable forfarms which want an online managementtool to organize all of the billing, healthcare, breeding and foaling records uponwhich successful operation of their businessdepends. The program calculates board andallocates charges to the appropriateowner(s) for billing and accounts receiv-able and interfaces with Jockey ClubInteractiveTM to allow simultaneous com-munication with the Registry.

equineline.com utilizes a secure centralserver which allows account holders to viewand update their account from multiplelocations.

The monthly subscription fees for theTrainer Program and the Farm Program are$29.95 for up to 20 horses, and $10 permonth for 10 additional horses. ThePortfolio Service is available for a flatmonthly fee of $2.49 per horse.

Equibase Company, LLCEquibase Company is a partnership between the TRA andThe Jockey Club founded in 1990 to provide theThoroughbred racetracks of North America with a uni-form, industry-owned database of racing informationand statistics. That goal was achieved in 1998 whenEquibase became the industry’s sole data collectionagency and provider of racing data to the Daily RacingForm. www.equibase.com

USING INFORMATION IN NEW WAYSAs the Official database for racing infor-

mation and statistics, Equibase Company LLCutilizes its information in ways that benefit itspartner tracks and the Thoroughbred racingindustry at large.

One example of leveraging proprietaryinformation for the industry’s benefit isVirtual StableTM, the free e-mail notificationservice that helps fans follow designatedhorses and participate in the sport. The con-cept was expanded this spring whenEquibase, in conjunction with the NTRA andthe host tracks of the Triple Crown, createdthe Virtual StableTM Triple Crown notificationservice. More than 14,000 fans signed up forthe unique service and received a once-dailye-mail of entry, result, workout and broad-cast information for the leading Triple Crowncontenders.

As a result of the service’s popularityamong fans and effectiveness in buildingconsumer awareness of the Triple Crownand its leading contenders, Equibase createdthe Virtual StableTM Breeders’ Cup WorldThoroughbred Championships notificationservice. Launched in July, this newest serviceupdates users on the progress of top con-tenders in every division leading up toBreeders’ Cup Day.

Ever-increasing traffic on equibase.comrepresents a cross-section of industry fansand participants, currently accounting formore than two million visits per month.equibase.com has more than 45,000 uniquevisitors and approximately 850,000 page

44

views daily. Equibase is leveraging its information to

expand awareness of horseracing in otherways as well. The Company serves as theOfficial supplier of Thoroughbred racinginformation and statistics to the NTRA, TVG,Youbet.com, Xpressbet.com, ESPN.com, theAssociated Press and other value-added dataresellers.

The Company has also utilized technologyto enhance the quality and timeliness of datacollection and dissemination. Through itseBaseTM field collection system, Equibase haseliminated the dual collection of workoutdata at tracks. Similarly, implementation ofan Internet File Delivery system allowstracks, simulcast outlets and value-addeddata resellers to log onto a secure web siteand download complete simulcast, workoutand result files according to their individualproduction schedules.

In 2001, Equibase Company distributeddividends totaling $1.65 million to its part-ners – Equibase Holding Partners LP andThe Jockey Club Racing Services.

TrackMasterFounded in 1989, TrackMaster in 1993 became the firstelectronic distributor to sell handicapping products usingEquibase® data. Equibase acquired TrackMaster in July2000. www.trackmaster.com

trackmaster.com RE-LAUNCHEDAs the only company to provide a line of

handicapping products for all three majorracing breeds – Thoroughbred, AmericanQuarter Horse and Standardbred –TrackMaster furnishes the highest qualitydata to handicappers of every skill level.

Facilitating this capability was the com-plete re-design of trackmaster.com inMarch 2002. The new site reflects the lookand feel of equibase.com and, through aquick-download menu on the home page,provides easy access to the company’s com-

plete line of handicapping products, manyof which have been enhanced or introducedin the past year.

TrackMaster continues to work with theleading interactive wagering providers todeliver information-rich products and serv-ices to their subscriber bases in support oftheir production schedules.

InCompassInCompass, a wholly owned subsidiary of The Jockey ClubHoldings, Inc., was created as part of The Jockey Club’scorporate restructuring in November 2001 when leadingracetrack software solutions provider McKinnie Systemswas re-named and re-focused as InCompass.

www.incompass-solutions.com

BUILDING FOR THE FUTUREFormerly known as McKinnie Systems,

InCompass is a technology solutions com-pany that is implementing a centralizeddatabase strategy for racetracks. Leveragingthe power of a centralized database willallow InCompass to deliver a wide array ofre-engineered solutions designed to helpracetracks achieve operational efficiencies,reduce costs and increase revenue.

The first phase of the re-engineeringproject is expected to be complete in the4th quarter of 2002 at which time the initialsuite of products will be rolled out. Serviceswill include state-of-the-art web browser-based racing office and horsemen’s book-keeper applications that interface directlywith the central database, as well as infor-mation management products and reportsdesigned to meet the needs of executivemanagement at a facility.

Achieving its vision as the centralizedinformation database for racetracks in the21st century would be virtually impossiblewere it not for InCompass’ leadership posi-tion in the racing marketplace. In 2001,InCompass software products were utilizedat 66 racetracks that represented 93% of

45

the total handle in North America. In aneffort to serve the entire market, the newscalable applications are being developedso they can be utilized by tracks of any sizewhich want to realize resource savingsfrom this unified approach to the manage-ment of data and technology.

TJC TechnologyThe Jockey Club Technology Services, Inc. was created aspart of The Jockey Club’s corporate restructuring inNovember 2001 when the business unit known as theInformation Technology Group was re-named and spun-off into a wholly owned subsidiary.

www.tjctechnology.com

SUPPORTING COMPANY-WIDE INITIATIVES

The Jockey Club Technology Services,Inc. (TJCTS) provides infrastructure sup-port services for the Registry and TheJockey Club’s commercial subsidiaries aswell as software design and programmingservices for the industry at large.

The unit’s professional resources play apivotal role in helping The Jockey Clubfamily of companies achieve internal effi-ciencies, enhance services and, in the caseof the commercial subsidiaries, generaterevenue through the application of newtechnologies.

Significant time and resources havebeen deployed over the past year in sup-port of the ongoing development ofInCompass’ centralized database strategyfor racetracks and the related re-engineer-ing of InCompass applications.

Major application development projectshave also included the continued expansionof services offered throughequineline.com; expansion of theEquibase Virtual StableTM to allow fans totrack the daily progress of Triple Crownand Breeders’ Cup World ThoroughbredChampionships contenders; and implemen-tation of a new digital imaging system for

the Registry which has reduced imageretrieval time dramatically, enabling greaterprocessing capacity and faster phone callresolution with customers.

To facilitate the continued growth incorporate-wide online services, TJCTS hasalso expanded Internet capacity to supportconsumer traffic that is doubling every year.

Grayson-Jockey Club ResearchFoundation, Inc.Established in 1940 to raise funding for equine veteri-nary research, The Grayson Foundation was combinedwith the similarly chartered Jockey Club ResearchFoundation in 1989. home.jockeyclub.com/grayson.html

$8 MILLION SINCE THE MERGER

With the allocation of more than$800,000 for grants in 2002, the totalwhich the Grayson-Jockey Club ResearchFoundation has provided since the mergerin 1989 approaches $8 million.

The Foundation has responded to themare reproductive foal loss emergency ofthe second year, bringing its total commit-ment to the problem to more than$250,000 for seven projects. One of theprojects, developed under urgent timerestraints during the spring of 2002, hasbeen recognized as a potentially importantstep in identifying tent caterpillars specifi-cally as a cause of the fetal losses.

Also illustrative of funding research oncurrent and developing topics, theFoundation in early 2001 had solicitedprojects to evaluate the analgesic proper-ties of Extracorporeal Shock Wave Therapyand the Research Advisory Committeeselected a proposal from Iowa StateUniversity, where the project is nearingcompletion.

Other projects currently being fundedinclude understanding how the suspensory

46

apparatus might link to condylar fracture;how diet influences existence of gastriculcers; use of new DNA technology to devel-op vaccines; and work at Colorado StateUniversity which seeks to refine use ofserum markers to flag pending bone andjoint damage in time to avoid major injury.

Contributions in support of theFoundation may be addressed to:

Grayson-Jockey Club Research Foundation, Inc.821 Corporate DriveLexington, KY 40503-2794

The Jockey Club FoundationEstablished in 1943, The Jockey Club Foundation providesassistance to needy individuals and their familiesinvolved in the Thoroughbred industry.

home.jockeyclub.com/tjcf.html

OVER $760,000 DISBURSED IN CHARITABLE SUPPORT

Grants from The Jockey Club Foundationtotaled $761,125 in 2001.

Approximately half of that total went tohelp meet the daily living expenses ofmonthly assistance program recipients.These include retired industry employees,terminally ill racing personnel and thoseparalyzed as a result of occupational haz-ards.

Individual grants for medical and funeralexpenses were also made, as were grantsand lump sum distributions to other benev-olent industry organizations, including manyof the various divisions of the Race TrackChaplaincy of America, the BackstretchEmployees Assistance Team and theThoroughbred Horsemen’s Health andRetirement Fund.

Distributions from the Cavanagh Trustamounted to $65,357.

Contributions in support of theFoundation may be addressed to:

The Jockey Club Foundation40 East 52nd StreetNew York, NY 10022

47

MEMBERS OF THE JOCKEY CLUBJosephine E. Abercrombie* Helen C. AlexanderJoe L. AllbrittonJohn Ed AnthonyCharles BakerWilliam W. BancroftJohn BarrJames E. Bassett IIIRollin BaughJohn A. Bell IIIJames H. BingerGary BiszantzEdward S. BonnieFrank A. Bonsal, Jr.Lucy Boutin* James C. BradyNicholas F. BradyBaird C. BrittinghamMichael C. ByrneAlexander G. Campbell, Jr.Thomas R. CapehartCharles J. CellaMrs. Alice H. ChandlerHelen B. CheneryGeorge M. Cheston* Sherwood C. ChillingworthRobert N. ClayF. Eugene Dixon, Jr.* Donald R. DizneyAllan R. DragoneJack J. Dreyfus, Jr.Richard L. DuchossoisC. Steven DunckerAllaire duPont

William duPont IIIEdward P. EvansRobert S. Evans* William S. FarishWilliam S. Farish, Jr.Hugh A. Fitzsimons, Jr.Richard L. GelbEdward H. GerryMartha F. GerryJohn K. GoodmanLouis L. Haggin IIIArthur B. Hancock IIIDell HancockSeth W. HancockJoseph W. HarperJohn C. HarrisMarquess of Hartington CBEJohn HettingerE. Edward Houghton* G. Watts Humphrey, Jr.* Stuart S. Janney IIIRichard I. G. JonesRussell B. Jones, Jr.Peter F. KarchesA. Gary LavinRobert B. LewisF. Jack LiebauJohn C. MabeeWilliam C. MacMillen, Jr.Harry T. Mangurian, Jr.Frank L. MansellJ.W.Y. Martin, Jr.James K. McManusRobert E. Meyerhoff

Leverett MillerMacKenzie MillerKenneth Noe Jr.Charles Nuckols, Jr.J. Michael O'Farrell, Jr.John C. OxleyJohn H. PeaceJohn W. Phillips* Ogden Mills PhippsDr. Hiram C. Polk, Jr.Carl PollardWilliam A. PurdeyDavid P. ReynoldsReuben F. RichardsDr. J. David RichardsonJack K. RobbinsJ. Mack RobinsonTimothy H. Sams* Peter G. SchiffBarry SchwartzJoseph V. Shields, Jr.Viola SommerRobert S. StraussGeorge Strawbridge, Jr.Dwight SutherlandShirley H. TaylorOakleigh B. ThorneDonald J. ValpredoDaniel G. Van Clief, Jr.Joseph Walker, Jr.Charlotte C. WeberWheelock WhitneyDavid WillmotMartin WygodWilliam T. Young * Stewards

HONORARY MEMBERSW.H. Rutledge (Australia)

Andrew Ramsden (Australia)Masayuki Takahashi (Japan)Jean Luc Lagardere (France)

Raymond J. Rooney (Ireland)Shigeru Motai (Japan)

Christopher Spence (England)Alan F.S. Li (Hong Kong)

OFFICERSOgden Mills Phipps

Chairman

Hans J. StahlPresident

48

William S. FarishVice Chairman

Alan MarzelliExecutive Vice President

James C. BradySecretary-Treasurer

James S.J. LiaoExecutive Vice President, Finance & Administration