Horse racing is a sport that holds fast to its past — at times to a fault. And there is perhaps no greater monument to horse racing’s past than Saratoga Race Course. Opened in 1863 with many of its original flourishes preserved, the upstate New York racetrack — the oldest in America — is liable to transport present-day patrons of all ages back to the ragtime era.
So imagine the collective shock when Fasig-Tipton recently announced that it would accept cryptocurrency for the first time at its 100th annual summer yearling sale in Saratoga Springs, which concluded Tuesday evening.
Writing for The Paulick Report, Joe Nevills summed this strange-bedfellow dynamic up quite well by observing, “The bloodstock market can be stubborn in its resistance to deviations from the way of doing business that’s worked for decades, and even centuries. … Rooted with that knowledge, Fasig-Tipton’s announcement on Monday that it would accept payment in cryptocurrency for its upcoming Saratoga Select Yearling Sale was a quantum leap in forward thinking.”
Ultimately, out of more than $55 million in proceeds generated by this summer’s sale of 135 yearlings in Saratoga Springs, just one horse — Hip #172, a dark brown filly out of Violence and Play Ballado — was purchased with cryptocurrency.
Crypto’s future in the sport
Of his $100,000 crypto purchase, Spendthrift Farms President Eric Gustavson told America’s Day at the Races reporter Acacia Courtney, “In the moment, it was like any other sale. Then I realized, ‘Oh yeah, we’re buying this in crypto, this is crazy, this is going to be a big deal because this has never happened before.’ Hopefully this … will be like a snowball … bring in some new people and will really get the industry excited about it.”
As with any buyer interested in making a transaction in crypto, Spendthrift established a line of credit with Fasig-Tipton. For Tuesday’s purchase, the buyer then converted $100,000 to Stablecoin, a cryptocurrency with low volatility. Following the conversion, Spendthrift paid Fasig-Tipton through an account with Crypto.com, a cryptocurrency payment solution provider. The payment structure ostensibly allays any money-laundering concerns, since the purchaser already established a credit history with the auction house.
“This is going to be a big deal because this has never happened before.”
— Fasig-Tipton (@FasigTiptonCo) August 11, 2021
It remains to be seen whether Spendthrift’s maneuver will be the tip of the iceberg or a lonely island, although Fasig-Tipton’s November sale in Lexington, Ky., which tends to attract a more global clientele, could prove a better barometer than what just transpired down the street from the Spa.
“That’s the sale where I think it would be more prevalent, because of international purchases,” said Anna Seitz Ciannello, Fasig-Tipton’s client development and public relations manager. “International wiring can be complicated — it can take several days, you can only do a limited number of amounts. Whereas with cryptocurrencies, once the accounts are set up, it’s very easy and it’s instant. We have buyers from eight or 10 countries at our November sale. They have time to learn about it. That would be where they would be very interested in using it.”
Seitz Ciannello added that she sees crypto as a way “to attract new buyers,” a notion that Terry Finley, president and CEO of West Point Thoroughbreds, is fully on board with.
“We’ve had an explosion of people interested — a really, really significant increase in people looking to get into the business,” said Finley, a Saratoga Springs resident whose consortium purchased one horse outright and a piece of three others at the Saratoga sale. “[Horse racing] has become, very quickly, a worldwide game. Crypto is certainly going to play a part in that. I know Fasig, they took the initiative and they’re the trailblazer. My clients and my prospective clients are talking about it.”
But one prominent racehorse owner, who asked not to be named, isn’t convinced that crypto has a place in the sport — at least not yet.
“I like the concept and the thought process,” the owner conceded. “I think it’s slightly early to use that currency to be buying horses when we really don’t know what will happen to crypto in the next two, four, or six years. That would be my concern. I don’t really know how serious the industry is about it.”
Where crypto and horses already coexist
There is one space, a virtual horse racing environment called Zed Run, where crypto and racehorses already coexist. Zed Run’s digital horses are non-fungible tokens (NFTs) that can be bred, sold, and raced against rival horses on the platform, with purchases and purses involving only cryptocurrency.
As The New York Times reported this past May, “One player sold a stable full of digital racehorses for $252,000. Another got $125,000 for a single racehorse. So far, more than 11,000 digital horses have been sold on the platform.”
Venture capitalists have flocked to Zed Run, with Netscape co-founder Mark Andreessen recently leading a group of speculators that invested $20 million in Virtually Human Studio, the firm responsible for conceiving Zed Run.
So with crypto enthusiasts already enamored of the sport of horse racing in its virtual form, shouldn’t it be natural for the same folks to want to try their hand at the flesh-and-bone version, especially now that they can use their digital dollars to buy a living, breathing thoroughbred?
Not so fast, says Michele Fischer, a consultant for Sports Information Services.
She sees virtual horse racing and the real deal as “completely different,” adding, “It’s very similar to eSports. You buy virtual items. We’ve seen a lot of these games, the audience is very much used to buying things within the game. I’ve looked at Zed Run. From a very high level, it mirrors horse racing. But I’m not sure if it’s going to get people to buy real horses.”
Jonathan Strause, whose company, Invincible GG, launched a patented artificial-intelligence horse racing platform that is currently being wagered on via parimutuel and fixed-odds betting in all MGM sportsbooks in Las Vegas and will soon expand to more states, takes a slightly more optimistic view.
“Zed primarily is crypto traders more so than horse enthusiasts,” he said. “We had a social game we launched with the Breeders’ Cup a couple years ago. So we know the market is definitely out there for horse enthusiasts to go from the virtual world to the real world. Does crypto help get them there? Yes, but not yet. We believe partnering with racing industry leaders to ensure authenticity is a critical step for success.”
With additional reporting by Matt Rybaltowski. Photo of Terry Finley: Louisville Courier-Journal