Vincent Caldwell chats to Big Betting Balagan about Virtual Live Racing

Vincent Caldwell chats to Big Betting Balagan about Virtual Live Racing

Our Chairman Vincent Caldwell features in the latest episode of Big Betting Balagan. In the exciting podcast Vincent shares with the team his exciting journey in the horse racing industry and why his latest product, Virtual Live Racing, is a real winner.

Lee Richardson (from Big Betting Balagan): “So, Vincent, how’s it going? How’s lockdown been for you? And how’s the family?”

Vincent Caldwell: “I’m very well, thanks, Lee. And we’re actually very lucky on the Isle of Man. There’s only three current key cases, which are all people coming back from the UK, but for months and months we hadn’t had a case at all. The family’s great, thank you. As you know, I’ve remarried recently, and my son has just gone off to Newcastle University which is worrying times as the outbreaks are looking bad again in the northeast of England. It’s all a bit crazy out there, but the world must go on.”

Lee: “Fantastic. So listen the kids are important so thanks for the update, but just as importantly, how are the horses?”

Vincent: “Well we’ve changed the stable, we had three or four with Gordon Elliott in Ireland that were jumpers and Poorman’s Hill won seven for us, and a couple others won two or three races. We’ve upgraded, I’ve bought a lovely two year old with Richard Hannon, and she’s a half-sister to Leominster who has been a group two and group three winner in Ireland this year.

My mother, God bless her turns 100 years of age in December so we bought a horse for her. She always told me all her life about James Connelly and she heard stories about O’Connell Street all the time when the GPO was there. In 1916, the Irish would fight the Easter rising, because the British were at war, and of course they took over the GPO on O’Connell Street. And believe it or not, this horse was called O’Connell Street, so it was like destiny to buy this horse. We’ve been with Nicky Henderson and I’ve sent him up to Gordon, and he should be running in a week or two. So keep an eye out for him!”

Vincent and wife Annie with Poormans Hill

Lee: “You and I have known each other for quite some years, but for the benefit of our listeners, maybe give us a bit of background on where you grew up and how you got into the industry?”

Vincent: “I was born in Belfast in 1961 and grew up there. My dad was a publican, and of course, you know, publicans in Ireland you know that it’s synonymous with horses and dogs. My dad started in the industry by getting four dogs together one night and landed a bit of a coup with the Yankee and that’s what got him going in the world. So I was obviously going to sort of follow his footsteps in some way. My dad had taken me racing all his live and he had some good horses such as Samuel Pepys. I had a great childhood with him going to the racetracks and it was just a wonderful time and it’s in my blood, racing is everything to me.”

Lee: “What were you doing before getting into this crazy industry of ours?”

 

 

 

Vincent: “I was running a nightclub in Belfast at 21 years of age. My dad had bought an old hotel inside the security zone. So in Belfast in those days, you had to get searched to go to the shops and into the city centre. His hotel was within those security gates, so anybody coming into the nightclub got searched. I went over to the Isle of Man for the first time, way back then, and I saw an afternoon disco being run and I thought god we’ve got one of those in Belfast. So I went back to my dad who had this hotel which had been bomb damaged as well, and the function room was not being used. So I said to him, I’ll hire it off you and set up an afternoon disco, which turned into a disco seven nights a week. And that’s where I get started.”

“My first movement into gambling so to speak was when I became the licensee for bar crest in North America, the Manchester Company, I started supplying slot machines. I was going around the Falls Road and the Shankill Road, and we know the Falls road is the Catholic area in Belfast, the Shankill road is the protestant area. So when I was on the Falls road I was Vincent and when I was on the Shankill road I was Victor. I had to do those sorts of things to survive in those days. Some scary things happened in the nightclub, I had a situation where I very nearly get shot two or three times, but we survived all that thankfully. Then my brother who’s a lawyer in Dublin had partnered up with a guy who wanted to start some betting shops in the south of Ireland and he wanted me to go down and help run them. I moved down to Dublin when I was about 29. Our first betting shop was actually directly behind Paddy Powers first betting shop.”

“We ran that for four or five years and we actually sold them to some of the Corals and then there was a TD down there who had a company called Celtic bookmakers and he bought the rest of them. When that happened I moved to the Isle of Man in 1985 and the opportunity came along to do some internet betting. The very, very early days, I remember taking the word internet and betting into the search engine and there was four items that come up, it was completely in the infancy. We had to find a group of guys on the Isle of Man, who were very brave and intelligent guys, but then we had to try to explain to them how to build an internet site, because we didn’t want to buy a product, we built our own product. I got invited in 1998 by Deutsche Bank to go to London and do a presentation. On that board was myself, Mr. Black who started Bet Fair, there was the guy who ran the Ritz club and David Gill, who was the CEO of Chelsea at that time. I did a presentation on this cottage industry called internet betting, which would be big someday. I remember one particular member in the audience coming up and sort of pat me on the back and said nice little presentation. I wish you well with your cottage or attic industry, basically, you know, he just didn’t see it. And you know, banking was going into the internet and travel agents were going to the internet, but gambling just was thinking about it. So we saw an opportunity to build something and build it very quickly, so we started Bet Internet.”

“There were major hurdles, we were given a licence by the Isle of Man Government, one of only 3. And if I can bore you with a quick story on that. I knew Paddy Power we’re looking for the licence by old friends, and I stuck a photo of Stewart Kenny, who was the boss of Paddy Power at the time, up on a dartboard at one of the betting shops over here. Because there’s only a couple of betting shops on the Isle of Man, I said to the guys, if this guy comes in here, call me and let me know he’s here. So they rang me and said ‘that guy Kenny’s in’ and so I knew that he was over for a licence application. I went to the newspaper and I said can you tell me if the applications in? And they said, ‘yes, it is, but his documentation hasn’t arrived yet’. So I asked BJ to go 50/50 with me on a licence, to cut a long story short, I was in the box in the court and the judge was cross examining me and I thought my God, am I going to get this licence or not. Paddy Power we’re sitting, waiting to go next but I had got first crack at it. The judge said to me, ‘I see from your background that you studied law, and suddenly you’ve fallen into the depths and depravity of gambling. How have you gone so low?’ I just chuckled and I said “To be honest your Honour, I’ve been at racetracks all my life. I’ve been in the courts for a small number of years. But the more honourable people, I meet at the racetrack”. And he was a big race track fan, I had no idea he was. He granted us the licenced.”

Lee: “So it’s now late 90s, early 2000s, you’ve got a listed business. I mean, how were the early days? How much fun did you have taking on the big boys?”

Vincent: “It was fantastic and very stressful as well. I think when you go public it just takes up so much of your time. I’ve actually got another claim to fame because one of my employees has just been taken into the Betting Hall of fame, I must be the only employer who has an employee gone in front of them. It’s rather embarrassing, isn’t it?”

“We had Mark Blandford come to buy us twice from Sportingbet, but we were looking at consolidation ourselves, how we would compete against the big guys, how we could grow quicker. Everybody’s in the sports betting and I always had this fear that something might happen in the USA. I had a strange experience. I had a lunch invitation on the Isle of Man, there’s a lady over here called Dizzy Wriggle. And dizzy had a race course actually. Dizzy asked me to go to lunch with Robert Sangster and Tom Collins. When I was there, she said, ‘Oh, by the way, I’ve got a tote licence’. And I said, oh, gosh, that’s interesting. Is it still valid? And she said, ‘Yeah’. We took it to the tax guys in Manchester, and we got a rate set for GD, for betting tags. We then started officially making our office into a racetrack. And we bought Amtote spectrum betting system from the United States. And we got Keith Johnson, who’s the president of Amtote to come over and install the system for us here in the Isle of Man. So obviously, that was an extraordinary launch, which changed my view of the world of tote betting and pari-mutuel and the US market and the global market, which is the bigger market. Sports betting is great, it’s big, but if you want to be legal in lots of countries around the world, you got to look at tote.”

Lee: “So, when did your relocation to the states and the opportunities that you saw there come along?”

Frankie Dettori and Vincent Caldwell at Churchill Downs

Vincent: “I went there in 2003, initially I had done a JV with an American group that actually came over to get a licence on the Isle of Man but couldn’t get one. They were Greyhound operators, they’re the biggest Greyhound operators in Florida. We went to the Irish and we got the rights to Irish greyhounds globally. We then set up a tote infrastructure in Ireland, whereby if you’re in Shelbourne Park on a Saturday night, you could bet in cork. And we did that for the Irish guy on board to get the rights to be able to export the dog products.”

“Unfortunately, when we put the satellite pictures up a few weeks after we put them up, Baghdad was bombed by the Americans, and satellite costs went through the roof and that ended the project pretty quickly. We then set up call centres in in the United States, we put up one in Portland, Oregon and one in Las Vegas and Nevada and one in New York State up in Buffalo. And from those the dog guys initially had done it to do their own dog betting online and provide customer service to their clients. But then they expanded on horses. We ended up getting Churchill Downs, New York Racing Association, who own Saratoga, Belmont Park and Aqueduct. So we had some of the biggest US operators, Parks as well in Philadelphia who used our facilities. On a Saturday the New York call centre was handling about 30,000 to 40,000 calls and several million dollars in handle. So very, very, very, very quickly, they were popular. It makes it sound like it’s easy, but the regulations in America are very difficult, very hard, long, slow, laborious progress to get them licenced, but once we got them licenced, they flew.”

Lee: “You’re absolutely right. I think still now what we’re seeing with the sports betting and gaming, the regulatory side is still a challenge. So maybe bring us up to date. I know you’ve got a new venture related to tote betting and horse racing, Virtual Live Racing. Tell us a bit about the background to that new idea?”

 

Vincent: “I went back to the Isle of Man in 2014 and my wife wasn’t well, she passed away subsequently, in 2015, she was only 49 years of age. I came back here with the kids and was kind of wondering where are we going? What are we doing? The Americans had always said to me when I left because things had been so successful, they sort of said, whatever you want to do come back to us. I went to a party with my PA, who got back on my feet to be honest with you. She was a girl who ran lots of social events and she invited me one day to go over and I met this guy called Dave Mosley. And Dave had started a company called Red. He was one of the very first guys to build virtual.”

“It launched very quickly and grew even though the graphics were nothing like they are these days. And so I met Dave and we hatched a plan to try and crack this thing in America, I went back to my old partners in America, us-off track, and said, you know, do you think that we could get this regulated? So we set up a company here in the Isle of Man, which is called Virtual software limited and we’ve designed some bespoke software. In August 2015 we started the project and took us about a year to put something together. We then said to ourselves, okay, let’s try and get this legal in a state that was friendly to us. We knew that with the call centre Oregon, things were very successful there and so we took the approach to go for the regulation in the Oregon state.”

“It was a long process! I tell you that in 2019, we had over 21 votes in houses, Senate’s, committees to get it through. But it’s been a wonderful process and it really mean something. In the old days, you remember when people used to get a licence, it was like, get three cups of a cornflakes pack, and you get a licence in Costa Rica. These days to get a regulator licence in the United States it can take three years, but my God, it’s been a worthwhile project.”

Lee: “Excellent. So what have you got? What is the product? And what do you hope to do with it?”

Vincent: “I always thought why don’t the tracks do it themselves and why does it always have to be a fixed odds betting product, associated with bookmakers which will not travel across the globe? So what we have built is the first tote wagering virtual products, which we have built on the basis of real race tracks. Now, when you went to go to USA, if there’s other virtual products out there, they wouldn’t pass the sniff test in the USA, let’s say. The same as Pokerstars have tried to get things legal in the United States on Poker, it’s not a legal situation, you’ve got to prove that’s a game of skill and that’s a very difficult thing with poker, because we all know poker has a big chunk of luck in it. With this project we had to do a couple of things, we had to put some skill into it and we had to avoid random number generation, because that’s viewed in the recent history of those robotic wagering. So our product isn’t a random number generator, it’s based on old data of actual races taking place. We’ve done a deal with race tracks to get their name and their track and we make an exact replica copy of the track. We’ve done several up to date, and we also get their data from the race banks, and we clean that all up. We’ve built six to this point. We’ve signed track seven and eight. I’m looking to sign track nine at the moment. And we’re going to build those next three, but the first lot are up there, launch on the Amtote system and they’re striking wagers. We’ve put them into sort of a test environment, but they’re actually live bets, but it’s restricted and it’s only in three or four operators.”

“We’ve signed about seven ADW operators in the United States. ADW for anybody doesn’t know is a Account Deposit Wagering and that’s how the online operators work over there. Up to a point, this is really the Second time that we’ve moved away from live racing, live racing was the only thing to bet on  in the United States legally online. We saw Amtote get their instant racing game through and Kentucky, which was one of the things that sparked in my head ‘well if instant racing is legal and it’s a rerun of all races, then why couldn’t we build a virtual product along the same sort of lines?”

Lee: So who do you hope this product is really for? And we you know, we’ve seen virtual racing come along, we saw virtual sports get developed and it was very popular during the pandemic. We saw almost every operator boosting their turnover on that particular part of the betting repertoire? Who is your product actually looking to target?

Vincent: “Yeah, well, the big launch, initially is geared towards United States and most of the tracks that we’ve built so far are US, we’re looking at some international ones now, but mostly it’s US facing. The ADW operators there will be the guys who take it on board, and I didn’t want to build a product, and then go off and hunt down to try and make a website, start looking for customers, those days are gone, I believe. It was better to build a software product and go to the people with clients and say, I’ve got this new product.”

“The other thing is, it’s a big benefit to the tracks. I mean, obviously, the racetracks are as we all know in dire states at the moment. And from their benefit it’s a factor, I used to go onto tracks and say I’ll build you a virtual version of your track for £400,000/£500,000, it’s quite an investment on my part. We build a track and then we do the data, we put the track up there, we start taking wages, and the track, of course, gets a commission from that. So it’s a new revenue stream for the race track play as well. On top of that there is the obvious markets, which are the betting shops as well, on the old TVs around the world casinos. In the US lots of the casinos have huge sports books within them and we’re within the Amtote system. Anybody in a sports book in the United States can walk up to your counter, in a sports book in a casino and strike a wager on our product if we’ve done a deal with the casino. So we’re negotiating with casinos, the Indian reservations, and we’re talking to race tracks as well, because race tracks could also take this product. I mean, it just looks like another race track, you know, for all intents and purposes, and so it’ll be displayed at racetracks and casinos online. It’s streamed by a company called All mobile in New York.”

VLR Product – Stills from Derby Lane

Lee: “Yep. Sounds fascinating. If some of our listeners want to find out more, where should they go? How do they get in touch with virtual live racing?”

Vincent: “Well, we have a website, virtualliferacing.com. And you can go there, see some samples of the products. I mean, the products are improving all the time. But technology’s changing all the time. Lee, I mean, actually, we’re just about to, to venture onto our seventh and eighth products. And in those they will, for the first time have live backgrounds. Now it’s almost like a film crew, we have a track at the moment that we’re going to send a film crew into in the next couple of weeks, these guys are from National Geographic, they have won Emmy Awards, all sorts of things. With regards to the tracks here we’re trying to internationalise as well, we’re trying to go into Britain and Ireland. But we know that within the UK and Ireland, it will be difficult to get a deal with the betting shops here or get into the betting shops here as obviously a lot of them have their own products.”

Lee: “No, I completely understand the focus on the US in terms of the importance of horse racing and the acceptance of tote betting sounds like you’re in the right place at the right time.”

Vincent: “Yeah, as you know with the COVID thing it slows things down a little. I mean, obviously, moving bodies around the USA and technical people around, you know, some tracks are closed at the minute, some casinos are limited. You know, it’s obviously a little more difficult, but it’s not stopping us. And we’re blessed that, you know, we’re in this sector at the moment, it’s almost like a perfect storm for success for us. In that, you know, the, the COVID situation going on, across the United States has really given us an opportunity to expand fairly quickly. I wanted to build three more tracks in the first quarter of next year, but now I’m going to try and build 12. We only need to get a small amount of money on each one, if you look at Saratoga Summer meet they’re races every day, each race, there’s about $1.3 million dollars bet across America. If I went to that same market and I put virtual betting up, if I put it up in the USA, in front of all those outlets in front of all those millions of eyes, could I get $5,000 a race, per day? and you think to yourself, yeah, that sounds a pretty achievable market.”

Lee: “Brilliant. Listen, good luck with that Vincent, it sounds fascinating. Definitely right place right time. And it’s been really great to catch up and hear about what you’re up to these days and that you’re still very much involved in this fascinating industry of ours.”

Vincent: “You’re very welcome, Lee. I’m just to say a little prayer for horse racing because it’s the love of our lives. And we want it all to survive, I’m sure. Unfortunately, a lot of it won’t. But we hope that it will. And thanks for listening to me and thanks for letting me tell you about my new project.”

Podcast credit to Big Betting Balagan

Visit the Big Betting Balagan Website here

1 Comment
  • Tony Fasulo
    Reply
    Posted at 4:44 pm, October 11, 2020

    Vincent, Glad to hear the updates on Virtual Live Racing. Tony Fasulo

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