Kentucky Derby Trail Updates | Gary Palmisano

Busy with the horses this time of year and all times of year is

Gary Palmisano joins us from over there at Churchill Downs.

Gary, thanks for jumping on the show.

How are you? Good.

How are you? Are you having me?

Yeah, no problem at all. Saw you at that UFL press

conference the other day. Are you a, are you a football

head at all? You you college football guy at

all? Definitely a football fan, a a

proud U of L alumni, love cheering for the Cards.

But but the UFL announcement more came or stemmed from our

close relationship with Mike Ripoli, who obviously is a a

huge investor in our sport and and a big Churchill Downs

supporter. So we wanted to return the favor

for Mike and, and show up at his event.

And it's something he's been telling us all for a few months

and, and a huge passion project for him.

You know, as he mentioned in the in the press conference, he

reached out to us looking for some connections to the stadium

folks and we were happy to oblige.

And, and the things that he mentioned about his passion for

global are are all truly heartfelt.

And this has been something he's working on for a while.

So we just wanted to to show our support.

I'm looking forward to some Churchill Downs and and

Louisville Kings doubleheaders. I think those will be real fun

once we get to the spring. Gary Palmisano with us over at

Churchill Downs obviously having you on because of an update to

the qualification for the Kentucky Derby.

The an expanded what you all call the European and Middle

East road to the Kentucky Derby. But we see all three of these

races in the Arabian Peninsula, two of them in in Dubai and one

of them in Saudi. Why the new emphasis on these

races and these preps in the Arabian Peninsula?

Garrett, I think what we're seeing through the sales data

and the breeding side of the equation is a significant

investment from Middle Eastern ownership interest.

There's a new group called Wassman Racing who's headed up

by the Emer or the King of Qatar.

There's significant investments coming out of Saudi, there's

there's potential for new developments and there's a track

coming in, in Bahrain and Abu Dhabi.

And of course Sheikh Mohammed, the the ruler of Dubai, his

Godolphin operation has been a world class racing powerhouse

for many years now and of course captured the past Derby with

sovereignty. So they're making significant

investment in the region. So what we're seeing and even

the what we saw a couple of weeks ago at the Keeneland

sales, there was a couple of particular Saudi Arabia or

Middle Eastern purchasers that racked up a couple of $1,000,000

worth of horses. So wanted to, to, to kind of tip

our hat to the investment that's going on within the region and

see if we could cultivate a road to the Derby opportunity to

support that investment. Obviously, if, if there's more

investment in, in racing and sales that helps breeders that

spurs on more people breeding horses, more people racing

horses and, and that's a good thing.

And then the, the rates, in particular the Saudi Derby, what

we saw is it is an improvement in the quality for every young

narrowly missed in Kentucky Derby 150 having won the Saudi

Derby and the UAE Derby. So just sort of a culmination of

what we're seeing within the industry and, and significant

investment in in that region and, and now the opportunity to,

to have a few more races to, to try to qualify for the Derby.

We saw the Woffman folks and Gary Palmisano with us from

Churchill Downs, you know, involved in the Derby trail just

this last year. And so it's, as you mentioned,

there's increasing interest in this race itself.

We even saw some of the, you mentioned some of those buyers

coming over from that, that region of the world.

We even saw a Libyan group start to put some money together to

start buying horses. So it's an interesting expansion

in the region for sure the the move toward these races as well.

Gary, is this a, is this a in an effort, a concerted effort on

the part of Churchill Downs to have more dirt races as part of

this series rather than, you know, a mix of, of turf races as

well? Sure, yes.

And and you mentioned there, there's three pathways to the

Kentucky Derby. There's the traditional American

Rd. which I think everyone is most familiar with.

Sure. That's your, your Florida

Derbies or Louisiana Derbies or Bluegrass Stakes, etcetera.

There's also an independent Japan Rd. which was created a

number of years ago where there's one single horse that

that's invited from Japan, which again we saw 5678 years ago a

huge uptake in Japanese participation at the sales.

And so we we sort of did a similar move with Japan how

we're doing now. And then as you mentioned, these

races make up the the European and Middle Eastern Rd.

So it is its own independent leader board, its own

independent road to the Derby. So points earned in the Middle

East have no bearing on the the American slots or the American

road to the Kentucky Derby. So they're all competing within

Europe and the Middle East. And to your, to point of your

question, what we, what we hope to see is someone like an Aidan

O'Brien or Charlie Waffle be that has a prominent turf force

in the fall, want to try the dirt to, to see if they have a

Kentucky Derby contender on their hands or not.

And and now this, this dirt added dirt races provides them

that opportunity to to bring a potential horse over from Europe

to the middle to, to try to see if they if they have what it

takes to make the the Derby field.

So is it 3 total spots then between those two other paths

that are the the non the non North American base path?

Essentially, is it 3 total spots?

That's correct, yeah. One Japan, €2.00 Middle East.

That's actually a reduction from 4:00.

That's one of the things people people speak a lot about.

You know, prior to to this, there was a European road to the

Derby that was a singular pathway from Europe.

There was a Japan road to the Kentucky Derby.

But prior to a couple of years ago, the UAE Derby was 100 point

race on the American road and it kind of just didn't fit.

And so we opted to sort of merge the European and Middle East Rd.

Thinking that some of the the the better European horses, if

they think they they have what it takes to make the Derby, can

try that out in the Middle East. I, we've even seen Japanese

runners in the Middle East. So I think there's obviously a

good base of, of operation there either in Saudi or in UAE for

these races that people from all over the world trust, trust the

process there or trust the, the program there and so are able

to, to go and run that way. It's mentioned in the press

release that 57 horses since 1967 have raced that competed

outside of North America and competed in the Kentucky Derby.

They include a a Puerto Rican based bold Forbes and that as

well, but Canon Arrow too. I hear a lot from the Venezuelan

folks. It's that more and more of my

media brethren are, are expats from Venezuela in places like

Florida, NY, etcetera. So it should be a lot of fun.

Is, is the is the hope to make this even more international as

we move forward or Gary or do you think there is not

necessarily a plan for where this will go, but you'll be

following the data like you mentioned earlier in this

interview? I think a little bit of both.

I certainly think what we saw in Japan and what we've seen in the

Middle East is a is an uptick in excitement around dirt racing

and acquiring dirt horses and acquiring American pedigrees.

You know, you think Japan Sunday silence kind of set the whole

breeding show off over there. And what we noticed 678 years

ago was, was Japanese buyers coming over and buying the most

premium mayors out of the out of the sales to take back to Japan

to breed to their high end stallions in hopes of breeding a

Kentucky Derby runner. And we think that'll happen as

well in the Middle East. There's a competitive nature and

a competitive spirit amongst individuals in these regions

where they want to be the first one to, to capture the Kentucky

Derby, the first Japan horse to win, the first Middle Eastern

horse to win. And, and we're hoping to, to set

into that competitive nature for those individuals who will again

only increase their investment and at the same time increase

the international exposure of the Kentucky Derby.

It's, it's a brand we believe is, is one of the best in, in

all the world and, and certainly in racing and that helps us for

our partnership base and, and be part of, of the international

racing and and sporting world. So a little bit of.

Twofold Gary Palmisano with us from Churchill Downs.

I also wanted to ask, as we, you know, I've gotten to know Kate

Hunter over the years and as people might not know Caba Kate

who helps, helps you and, and other operations in North

America encourage Japanese outfits to run in big spots in

the United States. And I've, I've gone through the

quarantine stuff with her and all those kinds of questions.

Is, is the quarantine issue similar for Middle Eastern

horses or is it, is it less stringent?

Is there more testing available to them coming from those spots?

It's a little bit less stringent in the Japan.

There's obviously a requirement that you have to hurdle from the

USDA perspective when you come into America, but a lot of the

more challenging requirements are are from the countries that

you have to return to. So Australia being probably the

most difficult from a quarantine environment, it's, it's easy to

err, easier to get into America through the USDA's checks and

balances. But in some instances getting

back to Australia or getting back to England or getting back

to Japan or where some of the the trickier quarantine

situations occur. But either way, it's it's

challenging to come across the world and and there are a bunch

of hoops you have to jump through.

But but I think that's going to make it even more special for

the first connections to get it done.

Gary Palmisano with us from Churchill Downs.

Wagering was up on your September meet by about 12%.

How much do you attribute that to having turf racing back

during September and how much was just, hey, we had a bunch of

good cards and good weather up here?

Turf racing definitely helps. We were able to run I think 12

races on the turf versus last year.

I think what you're seeing across Kentucky, Ellis Park up,

Turfly Park up is a, is an increase in the quality of our

racing and the and the competitive nature.

The Kentucky Thoroughbred Development Fund is an order is

a purse supplement or purse incentive that that's on races

here in Kentucky for horses that are bred in Kentucky.

So it really promotes the opportunity to to to have a

horse bred here on the farms here keeping kind of the

agricultural component alive and well throughout the region.

So when a Kentucky bred wins in Kentucky, they're incentivized

at a greater fruit with a greater purse opportunity.

And, and what we've seen is, is horsemen from around the country

gravitating towards Kentucky to race here.

Even if you just look at our, our races at Keeneland or

Churchill Downs, you see Peter Erten, you see Doug O'Neill, you

see some of these names, Phil d'amato that have been in

California or some names that have been in New York, Chad

Brown being here and whatnot. So we've we've certainly become,

we've always been the epicenter of the breeding industry, but

now the racing side as well. Byron King will join us on

Friday as a piece up at Blood Horse about the upcoming changes

at Turfway Park, both an increase in maiden special

purses but also adding some stakes races in December to the

card up there. How was the generally speaking

because Gary, I've never followed up with anyone.

I obviously went and attended it myself.

But the synthetic Championships in December was was Churchill

pleased with how those turned out?

And will you continue those this year?

Absolutely. Continuing those, I think that

was a day that did almost six and a half, $1,000,000 in

wagering. It was about a $2.8 billion day

prior year. What I think I see personally

and and others have seen it as well as is the big days are

getting bigger and and the idea of putting a name or a brand on

a on a race day enlisted a sense of excitement around the race

day. So what we're doing this year is

the synthetic championships. We'll be back.

I believe they're they're December 13th.

We, we specifically placed that day in the week between college

Football Conference championships and the start of

the the bowl games. There's one weekend where

there's a wall in college football action.

So we we specifically carved out that weekend to have this day

and it, it was a seeming seemingly a huge success last

year. So bringing that back again, but

also adding some some other steaks on the other weekends

just so we could have a a prominent race each weekend at

Turfway. That's fantastic.

Stuff for sure. Well, Gary, appreciate you

jumping on short notice. Obviously, this all dropped this

morning, so appreciate you jumping on.

You also, by the way, by having it that weekend after you avoid

that, that big cigar mile card the weekend before.

So it all works out pretty well for you guys that way.

So Gary, thanks so much for jumping on.

Well, I'm sure we'll talk soon. There you go.

No problem at all. Gary Palmisano over there at

Churchill Downs. Some updates.

Zach and I, I want to say just, and I know people are like, hey,

you're only supposed to talk horses on Friday.

I get it. This is an unbelievably good

move by Churchill. I should say unbelievably, it's

a very good move by Churchill because so much of what's

happening in horse racing and Gary did a very good job laying

it out. The dirt racing, especially

Zach, is so uniquely American, except that it's catching.

It's caught on in Japan and it's it's very much caught on in the

Arabian Peninsula. It's just not in Europe.

They just don't do it. Their weather, whatever else is

just not how you know they're, they're frankly, their pedigree,

how they breed horses isn't built for dirt.

I think consolidating this way makes a lot more sense.

And what I brought up earlier is very true as well, which is if

the Japanese horses don't want to qualify through Japan, many

of them have been very confident and very comfortable going to

the Arabian Peninsula as well. So there seems to be a fair

amount of good crossover there. In that case, 437-9680 is our

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