August 12, 1998
Fans Use the Web to Take a Shot
At Owning Their Own Racehorse
By DAVID SWEET
THE WALL STREET JOURNAL INTERACTIVE EDITION
While scanning Derby List, an Internet-based mailing list about horse racing,
four years ago, Cal Jestice was intrigued by a series of postings. If everyone
chipped in $25, wrote one subscriber, hundreds of Derby List patrons could
own a racehorse. One person offered to stop smoking and donate the money
saved to buying a thoroughbred.
"People were bandying about silly
ideas," says Mr. Jestice, 37 years old.
"I got tired of listening to it."
Mr. Jestice posted his own proposal.
"I basically said, 'The concept's workable, but this is the way to do it,' " says
Mr. Jestice, who lives in Hoffman Estates, Ill. "I expected to get no response.
Instead, I was flooded."
Emerging from a few postings was Virtual Owners Partnership, created in
1994 to allow equine enthusiasts to buy a share of a racehorse over the
Internet. Within a month, 24 aficionados had ponied up a minimum of $400
apiece to buy the operation's first racehorse, 5-year-old gelding Major Storm.
Today, the Illinois-based group, whose horses race at tracks outside of
Chicago, is set to purchase its 13th racehorse; its biggest winner, a 7-year-old
filly named Itbaya, has brought home $75,000.
VOP isn't the only horse-racing syndicate based on the Internet. Cyberspace
Racing Team, founded in 1995 by former VOP partner Toni Richardson,
boasts 90 members.
"The Internet is wonderful. It's easy to get information out," says Mr. Jestice,
VOP's managing partner who sends horse status reports to members via e-mail
twice a week.
Contrary to the image of horse-race owners --
bedecked in crisp blue blazers, binoculars and a
drink at the ready -- Internet investors are more
likely to be found smoking a cheap cigar near the
betting windows. As one CRT member points
out, these workingmen can enjoy the thrill of
ownership at a fraction of the cost.
"The majority are lifelong race fans, but they've
never had the disposable income [to buy a
horse]," explains Ms. Richardson, whose organization requests a minimum
$1,000 investment, which is spread among four horses.
Phil G. Johnson, a horse trainer since World War II who was inducted into the
Racing Hall of Fame last year, advised CRT to buy the 2-year-old bay colt
Aloha Sunrise, who is set to race this month at Saratoga. Though he doesn't
use the Internet, Mr. Johnson backs the concept of the masses owning
racehorses.
"I think it's a good idea. In England, they have companies where a cab driver
can have a piece of a horse," he says.
Acting on a friend's recommendation, Jon Rubin joined CRT in the spring.
He's visited Saratoga to watch the workouts of Aloha Sunrise, one of his
horses, and will try to attend the colt's first race.
A self-described weekend enthusiast who had never joined a horse syndicate,
Mr. Rubin enjoys the give-and-take of deciding what horse to buy.
"Some of the debates are quite lively," says Mr. Rubin, an actuary who lives in
Connecticut. "People have varying opinions on whether they want a 2-year-old
or an older horse."
Since stumbling across VOP when he typed "horse racing" into a search engine
in 1996, Allan Weston of New Jersey has been an active partner.
"As anyone from VOP will tell you, if there's a problem with one of the
horses, I'll chime in with my opinion," says Mr. Weston. "I'll tell you, the best
thing is when they win. It's the greatest."
Becoming a partner is simple. At CRT, potential partners sign a operating
agreement and send it in along with a check. Becoming a horse owner is
equally as easy. At VOP, Mr. Jestice informs potential investors he's going to
look at a 2-year-old at Saratoga, for instance, notes the price range and asks
who's interested.
Once a horse is bought, partners don't sit on the sidelines -- they're asked to
vote on what kind of track the horse should run on, who the jockey should be
and the like. Often, partners defer to the advice of the company trainers. And,
if an investor wants out, he can sell his share to other partners.
So far, no one's gotten rich from the Web syndicates. Equine expenses --
training, feeding, shoes and the like -- range from about $1,800 a month in the
Midwest to roughly $3,000 a month in New York. Winnings are expected to
cover these expenses, but sometimes partners are required to put in a little
more money.
"I tell most people if you can break even, you can consider yourself a success,"
says Ms. Richardson, who has counted 19 winners in three years and whose
horses run in Arizona, California, New York and Maryland.
Even syndicate heads aren't able to quit their day jobs. Ms. Richardson, who
works full-time and who is rearing two teenagers in Tucson, Ariz., doesn't get
paid for her CRT efforts. Mr. Jestice, a systems architect at Motorola, does
receive a small commission when one of the VOP horses wins, places or
shows, but then again he estimates he spends 20 hours a week on the venture.
Win or lose, the investors do have fun. Once a year, many of the group's 70
partners descend upon Mr. Jestice's house in Illinois from as far as Texas and
New York for a weekend of barbecues and horse talk known as VOPalooza.
And there are other benefits as well, according to the VOP frequently asked
questions page:
"You can use your status as a horse owner to meet people of the opposite sex,
as one of our partners did when he struck up a conversation with a Playboy
playmate in an Illinois OTB parlor," it reads. "And you can impress your boss
and coworkers by asking for time off to go see your horse run."
Though the Internet serves as a good means of communication ("I can inform
50 people at the same time as opposed to writing 50 letters," says Ms.
Richardson), not everyone trusts the fledgling medium.
"It's easy to think it's an e-mail scam," says Ms. Richardson. "But they can call
me. Or if they live near another member, they can meet him."
And will a Cyberspace Racing Team horse some day reach the Kentucky
Derby?
"It takes some people 40 years to get there," says Ms. Richardson, minutes
after cleaning stables in the 100-degree desert heat. "But you can always
dream." |
