1. “Annual Review Of Wagering Matters”
By Maurits Bruggink
Paris, 6 October 2008
Ankara, 15 April 2008

2. Outline Wagering in 2007 State of the Commingling Initiative
Economic Report
Goodmorning,
It is each year a pleasure to meet with you here in Paris and I hope to personally talk to each of you today.
This morning, I would like to touch upon the main racing and wagering issues over the last year; give an update on where we are with respect to our international commingling initiative and finally present to you the report on the economics of racing.
Let me start with the main issues on racing and wagering in the last 12 months.

3. Wagering in 2007
You have all received the second, 2007 Annual Report and I hope you like how it develops in both contents and lay-out. I would like to pick out some of the key statistics from the report, which in a sense highlight the issues of last year.

4. Evolution of Total Betting Volume
From our own statistics, it looks like the global betting volume has been rather stable over the last 6 years. If we consider that our figures are in euro currency, which has increased much in value over this period, we could even say that we are doind very well.
However, if we look at the individual countries, we see hugh differences, with some countries showing strong growth year after year and other declining or even being on the verge of collapse.

5. Betting by country: Europe
+6%
+8.4%
+11% +-
The largest racing countries have done very well in Europe, as you can see. The UK has not stopped growing since the introduction of the profit based taxation of bookmakers in The French PMU continues to show growth on the basis of an intelligent product mix and increasing off-track distribution network. It had a turnover of 4,5 billion euros ten years ago with 4000 betting points and has almost 9 billion turnover now with 9000 betting points. Draw your conclusions.
Not on this slide are countries like Germany, Spain, The Netherlands, Belgium and various other « small » racing nations that continue to struggle. These countries have not been able, by regulatory or other factors, to establish a business model that ensures a regular and continuous betting offer on the basis of wide and modern distribution networks that guarantee sufficient payment to the racing activity.

6. Betting by country: Asia
-6%
+10%
-5%
+38%
In Asia, we see some large pari-mutuel markets continue to suffer. In this part of the world, we see an increasing offer of other forms of gambling, like casinos or sports betting.
The figure in Hong Kong is not really up to date, as it refers to the season. The season has sees an upward trend in the betting on horseracing, despite the new sports betting offer. So horseracing can be competitive!
We have seen the introduction of more flexible tax system in both Hong Kong and Singapore, which has has had a positive effect. Taxation, and in particular the prevention of double taxation in the case of cross border commingling will become a increasingly important regulatory issue with the internationalisation of racing. Talk to your government now to get the best tax deal possible.

7. Betting by country: Americas
-11%
+9%
+14%
+18%
In the Americas, we see a further decline in US betting turnover

8. Commingling Initiative
Large Pool size – large dividends
Promotion of international races
Maximising Infrastructure
Always product on the shelf

9. Commingling Initiative
Large Pool size – large dividends
Promotion of international races
Maximising Infrastructure
Always product on the shelf
GLOBAL TRIFECTA

10. 1st Round Table on the Promotion of Commingling
Tote operators
Rights holders
Media

11. As my third and last part of this morning will be the presentation of a new report on the economics of racing. Louis Romanet mentioned already the background of this report earlier this morning. Allow me to highlight its content and objective and to make suggestions on how you could use it.
The contents is largely based on the research we carried out together with Deloitte Consultants a couple of years ago. You will not find any revolutionary theories in there – the report tries to explain in very simple terms the different components that constitute our sector and how they inter-relate: breeding, racing and wagering. It explains the importance of prize money to breeders and owners, it gives an idea od the importance of breeding and training to the rural economies, it explains the important contribution of wagering to finance the races, and so on and so forth. The different elements of the report are illustrated with key global statistics from the last 5 years.
The objective of the report is to explain to a reader who is less familiar with our complex sector on how we work and what the economic relations are between the different actors. It does not make any political statements and can be used without problem in your national context.
This leads me to the suggested use of the report. The report is best used when it is read by policy makers, many of which are not so familiar with our industry. This could be the newly appointed director in the Ministry of Agriculture with responsabilities on breeding or the official at the ministry of finance that is drafting the new gambling license, or the members of parliament that discuss taxation on the sales of horses, etcetera, etcetera, etcetera.
Government relations are often undervalued in our industry, although both racing and wagering are usually extremely regulated. Regulation is also decisive for the economic wealth of your national racing sector and I hope this report helps you in renewing contacts with all those politicians and officials who directly or indirectly affect horseracing.
This leads me to the end of my address on wagering and hope you have much success in the coming 12 months.
Thank you for your support.

12. Thank You
Ankara, 15 April 2008