The Future of Racehorse Ownership?

Written in June 2020

I’m sure by now at least one of your friends have told you about Bitcoin. The ‘internet money’ that threatens to disrupt the whole financial system by presenting itself as a digital store of value and payment mechanism. Like it or not, the reality is that the world’s Central Banks have their printers on overdrive to pump money into the system. As such, the use case for a decentralized, peer-to-peer currency finite in supply is more apparent than ever. Nevertheless, whether you believe Bitcoin to be Gold 2.0 or the greatest Ponzi scheme known to man, it’s underlying technology ‘the blockchain’ is here to stay. The blockchain, in its simplest form, is a transparent, immutable diary/spreadsheet (or ledger) for recording transactions, tracking assets and building trust. Over the past few years, this nascent technology and its applications have enthralled me. From revolutionising global supply chains to simplifying bureaucratic procedures and to even alleviating global poverty, the potential that the blockchain offers is quite extraordinary.

As the coronavirus incited fear across the globe and on personal level, resulted in me losing my role as a HR Manager, I found myself cocooning over a blockchain book that I purchased on Amazon a while back. It basically explained its intricate details and how it can radically transform all sorts of industries in a dumbed-down language that even I could understand. Naturally, this led me to googling whether there are any decent horse racing start-ups out there utilizing the blockchain. That’s when I found the Thoroughbred Racing Exchange (T-REx), ‘the world’s first distributed global ‘Racehorse Exchange’ platform, designed by a team of blockchain, big data and artificial intelligence (AI) experts for the mutual benefit of racehorse owners, industry professionals and horse racing fans alike’. For those of you already familiar with DL technologies, T-REx is run on an Ethereum blockchain. As per its site (https://trexchange.io/), T-Rex is an ‘innovative platform (which) will allow individuals with varying budgets to participate in the ownership, trading and management of racehorses easily and barrier-free across multiple jurisdictions around the world”. Simply put, T-Rex’s vision is to make racehorse ownership affordable to the masses via a fractional ownership (tokenised) model on the blockchain. Essentially, this promises to give anyone anywhere the opportunity to trade shares in racehorses just as you would with stocks.

For racing, this could be huge. It offers the industry the opportunity to break down the high barriers to entry regarding racehorse ownership and assist in removing the elitist ‘sport of kings’ stigma that continues to alienate many from the game. Through T-REx, one can own as little as 1/10,000th of a share in a racehorse and keep themselves informed of its progress each step of the way. And if you want to trade your shares, you could do so in an instant with absolute certainty over the integrity of each transaction. 

As per its white paper, T-REx uses blockchain technology to record racehorse ownership, HOT (Horse Ownership Tokens) trading transactions and build up a comprehensive racehorse information database where one can check:

? Horse pedigrees;

? Ownership structures;

? Historical transaction prices;

? Track records for returns on investments by trainers, bloodstock agents, syndicators or breeders;

? Veterinary records;

? Prize money;

? Race records;

? Full audit trail of communications; and

? Other important data that may affect a horse’s fair value

Although the industry has witnessed some fantastic developments in the areas of veterinary medicine and nutrition in recent years, there is no doubt that the industry as a whole is still very much stepped with old traditions. Some may argue that that’s what gives it it’s charm, but in order to stay relevant to the masses, the thoroughbred racing industry (especially in Ireland & the UK) needs to keep abreast with new technologies. Over time and I’m thinking long-term here, should T-Rex gain acceptance, this platform also has the ability to radically transform the bloodstock industry as we know it. Naturally, by opening the gates to a plethora of new investors, it will create new demand pushing the prices up. However, with that, it also offers just about anyone anywhere the opportunity to get a taste of pinhooking and stallion ownership. Fancy a foal at Goffs, but haven’t the resources to purchase one on your own, you could buy as little as 1/10,000th of a share in that animal should the purchaser decide to tokenise his/her asset (and yes, payment of operating costs are built into the platform so people overseeing the livery need not worry about getting paid). T-REx promises to bring the tokenised economy to the racing industry and make racehorse ownership a liquid asset. That may well be a good few off years, but this is what T-Rex promises to offer. The platform also promises to bring about much-needed integrity within the sector. The beauty of the blockchain is that it’s a transparent, immutable ‘ledger’ so any information regarding transactions can be visible for all to see. I really don’t want for this article to come across as some sort of an advertorial, that’s not intention but equally, you can probably gauge my excitement regarding the potential of this technology.

This is a long-term project and it will undoubtedly take years for it to be seen to best effect. Nevertheless, apart from its fractional ownership model mentioned above, T-Rex’s plan in the short-term to gain widespread adoption via its Professional User Interface (PUI) and gamification experience, details of which can be found on its whitepaper. The aforementioned PUI is particularly exciting as its incredibly experienced team of data scientists and machine learning experts ‘will utilise the vast amount of propriety information and Big Data captured by the platform to design and implement an AI Race Prediction System’.

I had the pleasure of speaking to its Founder/CEO, Derek Tam on WhatsApp recently. A prominent racehorse owner in the Asia Pacific region, the Hong-Kong based financial entrepreneur heads a team of exceptionally talented IT, data science and machine learning experts, among others. Like every other business, the coronavirus has halted plans, but its ambition to transform the industry worldwide remains steadfast. As prize money in the Asia Pacific countries is substantially better, T-REx’s attention is primarily focused on Australian, New Zealand and Singapore markets at least for now. It’s not until end of year 2022 that T-Rex’s intends on entering the Irish market, but I, for one, am fascinated by its potential.

For more information, please check out T-REx’s whitepaper: https://trexchange.io/assets/files/Whitepaper.pdf