- 2 days ago
In the latest installment of the TDN Business Hour, the conversation focused on one of the most rapidly evolving and disruptive forces across global industries: the integration of Artificial Intelligence (AI). Host Najja Thompson talks with three insiders actively driving the integration of AI into the horse industry: Josh Isner, Joe Appelbaum and Billy Paynter.
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00:00Artificial intelligence is rapidly changing the way businesses operate across every industry.
00:05From healthcare and finance to professional sports, organizations are using AI to improve decision-making,
00:11streamline operations, and create new opportunities for growth.
00:15The question for thoroughbred racing isn't whether AI is coming, it's if we're ready to embrace it.
00:20Most importantly, can AI help position the thoroughbred industry to become more competitive,
00:25sustainable, and attractive to the next generation of owners, breeders, horse players, and fans.
00:32My name is Nadja Thompson, Executive Director of New York Thoroughbred Breeders.
00:37And today on the TDN Business Hour, we'll explore those questions and more.
00:41With Josh Isner of Delta Squad Racing, who has a professional background in AI and uses AI technology in his
00:48horse ownership.
00:49Billy Painter of Ocean Reef Racing, who has developed Ecotrack AI, a tool for every participant in our game.
00:56And Joe Applebaum, who has created Wager, a betting tool using AI for professional horse players.
01:03Thank you for joining us.
01:10Joining us now is Josh Isner of Delta Squad Racing.
01:13Josh, thank you for joining us today.
01:15Thank you very much for having me.
01:18You know, you have an interesting story in how you got involved in thoroughbred racing.
01:21Can you tell our viewers just how you got to being an owner?
01:24Sure thing.
01:26I came out of left field a little bit.
01:28I've been a fan of the sport kind of recreationally for a long time, but my friend Dave was nice
01:34enough to identify me as a fellow degenerate
01:37and somebody that would immediately get addicted to horse racing.
01:41And so he invited me up to Whitney Weekend in Saratoga.
01:45We went to the Whitney, some other races that week.
01:48And then obviously the sale follows the next two days.
01:51And we bought our first horse together.
01:53I also bought my first horse on my own.
01:56And that was August of last year.
01:59And now our stable has almost 25 horses here.
02:01And we're off and running.
02:03We've won a stake, won an allowance last week.
02:07And we're rolling, looking forward to a great summer.
02:11So having the time of my life.
02:13Can you tell us more about your background, getting into thoroughbred racing and your day job as well?
02:18Sure thing.
02:18So ultimately, I run a company called Axon.
02:22It's the only company I've ever worked for.
02:24I've been at Axon since 2009.
02:27I graduated college that year and drove straight across the country from Boston to Arizona and got started there.
02:33At that time, we were manufacturing taser devices.
02:36The yellow guns you see that police officers wear.
02:39Our goal is to obsolete the bullet in policing, meaning we can make a taser so good that a police
02:45officer never has to take somebody's life with a gun.
02:49That business has evolved now into we started putting cameras on the tasers.
02:54And that started to show how they were being used in the field.
02:57And then we said, hey, this is kind of working.
02:58Let's put the camera on the officer.
03:00And we've become the market leader in body-worn cameras.
03:03So when you see all the body-worn camera videos on the news, you'll notice the little triangle in the
03:08top right corner, the yellow one.
03:10That's our company, Axon.
03:11And now that we've built up this big data set of all this data coming off the body cameras, we're
03:16the market leader in artificial intelligence and public safety.
03:20We build a lot of AI tools that police can use to, for example, write police reports faster or translate
03:28language in the field using the body camera or start to identify license plates using the body camera and so
03:35forth.
03:36So a lot of applications for AI and public safety.
03:39But ultimately, day-to-day, that's what we do.
03:41We serve all U.S. public safety and military as well as over 100 countries around the world.
03:46So a lot of fun.
03:48I thought it would be the most fun thing I've ever done.
03:51It's getting its run for its money now that I'm in the horse racing game.
03:54I'm having a lot of fun doing this as well.
03:57Definitely.
03:57Congratulations.
03:58In your day job, you certainly use artificial intelligence and technology to help to keep things up to speed.
04:04How has that transitioned for you to thoroughbred racing world and as an owner?
04:08Sure thing.
04:09Yeah, there is a lot of applications for AI and horse racing.
04:13I've actually spent some time rebuilding the catalog app for the sales and building in a lot more functionality to
04:20it.
04:21Just me, one other person, and a lot of help from Claude Code.
04:24I use it for handicapping.
04:28I'm trying to start to experiment with machine vision to see if we can learn anything in terms of yearling
04:35confirmation.
04:36As an owner, certainly, you know, things like understanding the condition book and just understanding the background of the sport.
04:44I was interested in learning more about the Jockey Club recently.
04:47So I had ChatGPT make me a podcast script.
04:51I fed it into something called Notebook LM.
04:54It produced an hour podcast.
04:55And as I was driving, I just listened and learned a ton about the Jockey Club.
04:59So there are all kinds of applications for AI and horse racing.
05:04And I think they'll be welcome.
05:06This hasn't necessarily been an industry that's been well served by technology historically.
05:10So hopefully this is one where, you know, it can be a step function forward in terms of how people
05:16are able to deploy this.
05:18Yes.
05:18And getting into that, especially on the sales side, you know, there's so much of a human element between bloodstock
05:23agents and visually seeing confirmations in your use or where you think AI is going to go in the future,
05:30especially with that vision technology you talked about.
05:33Can you see that expanding in the next five to 10 years and adopted on a wide scale platform?
05:39I hope so.
05:40And I hope it doesn't take five to 10 years.
05:42I think if it does, there'll be people using it a lot sooner than that that will have a tremendous
05:47advantage, in my opinion.
05:49So I think this is one, just like in all things, when something new comes out and people figure out
05:54exactly how they can create an edge for themselves or some kind of application for it that others aren't going
06:01to be using,
06:01those are going to be the early winners.
06:03Now with this, you know, to be fair, you know, it's AI is generative.
06:08It gets better over time.
06:10And so this is the worst it'll ever be today.
06:13And so, you know, there'll be some misses along the way, undoubtedly.
06:17But I think this is something that will hit the mainstream in horse racing in the next 18 months to
06:2324 months.
06:24Five years would be a long time to wait.
06:26And were you trying to solve a specific problem when you were looking to implement AI into how you operate
06:33your horse racing ownership experience?
06:35Or is that something that just naturally came along as a technology has developed rapidly through the, you know, last
06:41year or so?
06:42Yeah, I think it's been a phenomenal tool to get up to speed in horse racing.
06:47You know, it's one where being an owner and learning about the sport and all the ins and outs, it's
06:55overwhelming and it's a pretty high barrier to entry.
06:58And so when you have a tool that can literally teach you about anything regarding the sport, it's the biggest
07:04source of intelligence on the planet.
07:07Ultimately, it's something that you can catch up quickly.
07:10You know, I put little videos together that just teach me about certain elements of the sport.
07:15There's all kinds of things you can do.
07:17But personally, one of the things I hope AI really contributes to is the idea that essentially you can learn
07:29a lot more than what's on the page.
07:30Just like in a, you know, they take a horse catalog page.
07:34It doesn't tell you whether the dam was a turf horse or a dirt horse unless you know the races
07:39that she ran in.
07:41It doesn't tell you if she was sprint or went long.
07:44Ultimately, that's one very easy thing to do where you can color code the races on the catalog page.
07:49And all of a sudden, as a new owner, you're not researching every race and how long it was and
07:54if the surface changed or whatever the case may be.
07:57You just have it right there in front of you.
07:58And you can get all kinds of additional stats and information that, you know, really, for example, you know, bloodstock
08:10agents really have off the top of their head, but really nobody else.
08:13So as an owner that wants to feel like they're participating, not just paying the bills and seeing what happens,
08:19this is something that's really helped me catch up and learn quickly.
08:23There certainly has been a wider conversation within the industry in terms of acquisition of data and who owns data.
08:31Have you run into any obstacles in trying to develop your algorithms or AI functions and the data that's presently
08:38available and what you'd like to see more available from the industry?
08:41I think so. And I do think the there is some there, you know, the APIs are available.
08:47So those are the essentially connectors of information using software.
08:51So you can derive some of the data in the catalogs, especially using the APIs.
08:57But I'd say, as I assess, you know, I think all of us want horse racing to grow as a
09:02sport and get in front of more eyeballs.
09:04Personally, I think the data is very central to that.
09:07And the way horsemen use the data today is very specific for things that knowledgeable horsemen would need it for.
09:15But it's not it doesn't translate to end users who would be prospects to start to be fans of the
09:22sport.
09:22And so hopefully between, you know, using the data and applying AI to it, you can really start to teach
09:30people much more simply what they're looking at.
09:33Even things like calling the horse a mom or a dad as opposed to a dam or a sire, things
09:38that just make the sport less intimidating for people to come into.
09:42I think AI can be a major translator in that way.
09:45But of course, it does. You need the data to be able to do that.
09:48And you've also had tremendous experience as a handicapper as well as a fourth place finish in the NHC, I
09:54believe.
09:55So it's a sport ranked NHC rookie.
09:57I came in about 150 out of 850 ish last year.
10:02Missed the cut in a heartbreaking race, the last race of the second day.
10:05But I'm having having a lot of fun doing it.
10:08Sorry about that. But have you used AI in your handicapping levels?
10:12And is that a personalized system separate from your ownership side?
10:15Or have you merged both systems to work together?
10:18Sure thing. I have a few different methods, some more conventional using the form.
10:22But AI, I do believe, should be applicable to handicapping.
10:28I think like a lot of things in AI, it really depends on prompting.
10:34So prompting is essentially what you're asking the AI to do, what context you're giving it, being very specific about
10:41the outcomes you want to see.
10:43And so, you know, you could have 100 people using AI for horse betting in each of those AIs is
10:50giving a different pick for a race because they're looking at different information or they've been prompted differently.
10:56So I've spent a lot of time kind of building up a program with very specific prompting that I'd say
11:06is still it's a work in progress, but it's helped.
11:10I've won my two seats for the NHC already, you know, for next March already.
11:15So it's certainly helping in that regard.
11:17And I want it to be very dialed in.
11:20And we've got some work to do to do that.
11:22But we're on the right track, I think.
11:24Definitely.
11:25And what I've read is that you've used AI to, I guess, I guess, lessen your burden in other areas
11:32or like the manual labor that it would take to exhaustively study pedigrees and background.
11:37So would you say that's one benefit of AI is to streamline workload?
11:41Of course.
11:42Of course.
11:43And just give you better ideas of what you're looking at.
11:46A hundred percent.
11:47You know, I think a lot of people will use the formulator to kind of build out what the race
11:52should look like pace wise.
11:53AI can do that in two seconds.
11:55And so even if you're not interested in the pick, if you're just interested in seeing how the pace will,
11:59you know, likely play out, there are very, very quick solves for that now.
12:06And then the more you do with it, the more just opportunities it opens up.
12:09Like when we built the new catalog app, it's got a vet workflow in it.
12:13So you see a horse you like at a sale, you hit one button, the vet gets a text saying,
12:17hey, you need to vet this horse.
12:19And they just text that number back and it populates in your app.
12:22So you have all your vet notes associated with each catalog page.
12:25So there's just things you can do once you get going that are natural branches into into new workflows.
12:31And, you know, it's it's certainly for someone like me who's trying to learn fast.
12:36It's been a tremendous tool.
12:38Have you seen widespread adoption from fellow owners and friends?
12:41I know you've recently come into the game and, you know, booed yourself with now a 20 horse stable and
12:46more coming.
12:47But from owners you've presently met in the game that have been longstanding.
12:51Have they been adaptive to embracing AI?
12:53You know, I my day job, I work with police officers and and we always say the only thing they
13:00hate more than change is staying the same.
13:03And and I'd say there's there's an element of that with horse owners, too.
13:07And just the industry as a whole where it's a very kind of set in its ways mindset right now.
13:12But I think ultimately the thing that has to really get people excited about it is they need to see
13:17people having success using these new tools.
13:20It's great if you can build a new catalog app.
13:22But if you're an expert at reading the catalog the way you've done it for 30 years, you know, it's
13:26probably not as exciting.
13:27But when people start having more success using these tools, I think that'll be the the paradigm shift where people
13:34say, hey, I'm falling behind by not using these.
13:37But I wouldn't say the adoption is is is on the leading edge at this point.
13:43Is that something you're working to convince others or are you taking advantage of that edge that you see currently?
13:49Yeah, I think I'll certainly anyone who asks, you know, I want the sport to grow.
13:54I want people to have success in it.
13:55So I'll certainly be you know, I won't be hoarding the information, but I'm not sure that we'll be trying
14:01to gain mass adoption either.
14:02It is something that I view as an edge.
14:05And and so it's it's certainly helpful in some ways.
14:09And I think, you know, like I said, as soon as folks start to catch on to it, I think
14:13it'll be pretty mainstream because it's pretty clear that there's something here.
14:17But in the meantime, hopefully hopefully we we get a few prospects that might be flying under the radar here.
14:24Definitely. And I guess, Leslie, I'll ask you within 10 to 15 years or as you mentioned, maybe six to
14:3212 months,
14:32what do you think are going to be the biggest improvements from A.I. adoption within thoroughbred racing?
14:38Sure thing. I think you will.
14:39I think you will see a revolution of all the tools that folks use.
14:45And that's something that I'm very passionate about.
14:49Like that should be the easiest thing to do is like you're using software that's 20 years old and now
14:54you can modernize it.
14:55Like that should be by the sales next summer.
14:58I'd imagine that that'll be in practice.
15:01Certainly, I think on the handicapping side, as folks start to start to understand what's possible there,
15:09I think you'll see more applications around that.
15:12Now, I think a pessimist would say the folks that are going to benefit first from that are the CAWs
15:17because they're going to be investing a lot more into it than, you know, than recreational betters.
15:22But ultimately, I think that will be a tool for everybody.
15:25I think the thing that will probably take the longest is the machine vision stuff.
15:29So things like not only examining horses and, you know, making predictions based on the physical examination,
15:35but also the dynamics of how horses move and being able to plot that out and use it to identify
15:43soundness or, you know,
15:45really whatever you're looking for.
15:46Those are the things that are getting going, but probably two or three years away from really meaningful changes.
15:54But like anything, it's going to be a process, but it isn't going to be a linear process.
15:58That's for sure.
15:59It's going to be exponential where, you know, I would say that the utility is going to double every year.
16:05And so folks, you know, that are, you know, folks will be taking notice, I think, relatively quickly.
16:10That would be pretty cool and interesting, like those Ray-Ban meta glasses, if you could just put those on
16:15and look at the soundness.
16:17For sure.
16:18Or just holding your iPad, like when you're at the sale with your iPad, just holding the camera up to
16:22the horse.
16:23And as it's walking or standing still, we should be able to build in a lot of the vision components
16:28into that.
16:29Now, it's going to be some trial and error, right?
16:31There are people who are more like artists that are very, very good at this.
16:34I work with one of them named Liz Crow, and she's fantastic.
16:37And so, you know, they're pretty good at their job.
16:41So it's going to take some time to be able to supplement that work.
16:44But, you know, I think folks like Liz are already trying to investigate how AI can help them.
16:51And I think she's smart to do that.
16:53Definitely.
16:53And lastly, I'll ask you, how'd you come up with the name of Delta Squad Racing?
16:57Where did that come from?
16:58Yeah, of course.
16:58So our company is named Axon, and our logo is a Delta.
17:03So if you took the horse head away from my shirt and just had the triangle behind it, that would
17:09be our corporate logo.
17:10And so Delta Squad Racing is an ode to our company Axon.
17:15And we're the Delta Squad at work.
17:17It's got some ties into the military and so forth.
17:19We serve public safety and military.
17:21And so it was a pretty easy one to decide on in terms of starting my stable.
17:26That's great.
17:27Well, thank you for joining us, Josh.
17:28Really appreciate the time.
17:29I really appreciate it as well.
17:31Thanks for having me.
17:33Hi, Joe.
17:33Thanks for joining us today.
17:35No, it's great to see you.
17:37Is that a real background or a fake one?
17:39It is indeed real and not artificial, which getting into today's topic, you have more than 20 years experience in
17:46the industry as an owner, an executive, and of course, now an entrepreneur.
17:52Can you tell us what excites you about artificial intelligence and its impact on third-bed racing?
17:58Well, I think it's the ability to deliver to consumers the sort of tools, the sort of data and insights
18:06that professionals have been using probably for that whole 20 years.
18:10But now we've had a democratization of these analytical tools that basically make them available to everybody, or that's what
18:20we're trying to do at Wager, is make them available to people.
18:24So I think it's an exciting time.
18:27It's a little scary for people because you're going to be asked to do things that you've never done before.
18:34You can't just crack open the paper with a felt-tip pen and think you're going to gain those insights.
18:42Yeah, so talk about that development of Wager.
18:44What led you to the concept and how you're using it as a company and as a tool for betters
18:50to democratize our industry?
18:52So I started thinking about this kind of just in my head way about 10, 12 years ago, mostly because
19:00I'm extremely competitive, like many horse owners out there.
19:04That's why you get into it, right?
19:07And I realized what I was doing betting-wise, which had been fairly successful and got me into the game.
19:15I started buying horses because I won money gambling, wasn't going to cut it anymore, that I was up against
19:22a group of competitors who had better tools than me, better data than me, better analysis than me.
19:28And I didn't like that so much, right?
19:30So I started figuring out what it takes to be really analytical in your approach and to be able to
19:40deliver that in a way that people might enjoy.
19:44And so I read and watched videos of a guy named Bill Benter, who really started this off 30 years
19:51ago, and did a lot of reading of academic papers.
19:57I did all the reading of the academic papers, people, so you don't have to.
20:02You just got to listen to what we say.
20:03And this is going on, like, under the hood for years and years and years, just trying to figure out
20:12what these tools should look like, what real analysis is.
20:16And then about two years ago, we started developing Wager as a consumer product, something that can produce for people
20:25a couple of things.
20:27One, to give you an accurate read on where the market's headed and what the fair value of every horse
20:33should be.
20:34Two, to give you access to strategies that will put you in the best positions more frequently.
20:44Three, to try to change your conception of who you're betting on to as a value hunt or searching for
20:54value as opposed to loving a horse.
20:58So if you're in the love the horse camp, you're probably not going to like what we're doing.
21:02However, if you're in the I just want value from my money team, you're going to really like what we're
21:09doing.
21:10And so we started this years ago, and now we've gotten to a spot.
21:16We've debuted on Naira Bets on their wager pad.
21:19At the bottom of every race, you can see some wager suggested bets, which blend in our odds, the live
21:28odds, and a whole bunch of strategies that we know to be successful over time.
21:33Right. It may not be successful every single race, but over time, we know that these strategies are real successful.
21:41Obviously, in the betting space, you know, average bettors or everyday bettors having to compete against computer assisted wagering teams
21:48is a hot button issue for the industry.
21:51Tools such as wager, which you have developed.
21:53How does that help democratize and, I guess, level out the playing field for an everyday bettor versus these supercomputer
22:01teams?
22:03Well, it's a matter of access, right?
22:05So the stuff that you're not going to really want to do on a daily basis, we do for you,
22:13right?
22:13And we make available.
22:14So to give you an example, we produce a set of odds for every single horse in every single race
22:20in the United States of America, soon to be international.
22:24Although I guess we don't do the tracks in Texas, like Lone Star or Sam Houston, because they don't export
22:33their signal.
22:35So we do that.
22:36So you have an immediate touchstone.
22:39I think today we're covering 12 tracks, right?
22:42So, you know, you couldn't do that physically, you know, even if you wanted to.
22:49Also, like, do you really have the discipline to do that?
22:53Like, that's what makes the computer great, right?
22:56The computer does it quickly.
22:57The computer doesn't get angry.
23:00The computer isn't tired.
23:02The computer doesn't have another job.
23:04So we can produce all this for you.
23:06So in democratizing things, the first thing we want to do is give you a touchstone with some odds that
23:12you can look at, right?
23:13So often you'll see odds on the board and you go, wow, that horse is 10 to 1.
23:17And I can look at my odds and say, you know, he's probably not going to stay at 10 to
23:211.
23:21He's probably going to be more like 4 to 1.
23:23I say, well, how do you know that, Joe?
23:25Well, because we have a machine learning model that's looked at, you know, decades and decades of results and pricing.
23:35And, you know, there's not a lot of hidden secrets in the world, Naj.
23:40It's kind of you have a good idea where that stuff's going to be.
23:43So that's the first thing.
23:45The second thing, and this goes underappreciated by everyone, is how much constructing your wagers is probably more important than
23:56picking the right horse.
23:58And we have looked at our own wagers.
24:02We've looked at a lot of other people's wagers, and we've looked at the markets.
24:05So we have a really good idea of what sort of wagers are typically successful and what sort of wagers
24:14are value producing, meaning they pay more than they should, right?
24:19So when you hit that trifecta and you're expecting $100 and it paid $140, you're happy, right?
24:28You're happy that you won, period, but you're extra happy when you get a little extra money.
24:31So we're trying to steer people in the direction of those wagers.
24:36So those are the sorts of things.
24:38Sorry.
24:39Will it also be tiered in that beginner bettors can be able to use wager and not go so in
24:45-depth versus if you're a seasoned and well-calculated tournament player or, you know, hardcore bettor, where you can use
24:52wager as a tool with the odds with, you know, horses and races all over the country.
24:57Right.
24:58So our first product rollout is very simple, and it's for really a retail bettor.
25:03It gives you some suggestions.
25:04Not that a more sophisticated bettor wouldn't benefit from it, because I think they would.
25:10But for the more retail-oriented players, we're giving you some suggestions right away that you can see.
25:19I'm hopeful later this summer we'll be rolling out on our own website some more sophisticated tools for players so
25:27that they can see – they can take into account their preferences, their risk tolerances, their budgets, and we can
25:35really help create more sophisticated tickets.
25:38It's in the Superfecta, in the Pick 4, in the Pick 5, et cetera.
25:42We can really help guide people along those lines to, you know, to really steer them to maximize their preferences,
25:50right?
25:50It's like a decision-making support tool is how we frame it, right?
25:55You have some ideas, but it's hard to execute on those ideas, mostly because you've got to punch in a
26:02lot of tickets.
26:02And, you know, these days most guys are doing that on their phone.
26:05It's hard to punch in the preferable number of tickets.
26:09So to give you an example, we'll take your preferences.
26:12Like in a Pick 4, a typical player will play maybe three tickets at most, probably one ticket.
26:19But, like, at most you're playing – if you think you're pretty cool, you play, like, two, three tickets.
26:24Hey, if you give me a $100 budget in the Pick 4, we're likely to play you 20 to 25
26:30tickets, but we're going to pinpoint exactly which horses you're interested in with which risk tolerances, meaning odds levels you
26:40want to play with, right, and match that to your budget and try to create paths because we can do
26:46that, right?
26:46Our execution tools are superior to you and me punching things in with our fingers on a phone, right?
26:55And we operate within the guidelines that Naira and the other ADWs said, but we want to really make ticket
27:03construction and execution as efficient as possible.
27:08And I guess it's also the goal to make that retail better or feel that they're still fine-tuning and
27:14making the final points and saying, you know, one of the great things about betting for me was I had
27:21to cap this race.
27:22I made the decision.
27:23I made the correct pick.
27:25But with using products such as Wager, are you saying it's an assistance tool and helping you set the parameters
27:32of how risky you want to get, how entailed you want to get for the assistance of using the product?
27:39Well, we're flexible enough we can go either way.
27:43If you just want to turn your mind off, you don't have an opinion about this race, but you want
27:47a little action, we'll give it to you, okay?
27:50If you do have an opinion, though, we have a system, a proprietary system of asking you who you like
27:58in the race, who you don't like.
28:00Often that's more important, right?
28:02It's not so much who you are.
28:04Hey, that horse has no chance to win, so let's just take them out of the equation.
28:09So we have some flexibility in our approach and how we designed our systems so that you're able, as a
28:16consumer, to have as much input or not as you possibly want, and that can differ on a race-to
28:26-race basis.
28:29What we're really looking to do is meld your preferences or lack thereof with what we're seeing through our strategies
28:39and through our odds balancing.
28:41And as a 2016 winner of the British Cup Battling Challenge, how would Wager have assisted you on those days
28:49of racing to get to the top?
28:51So first off, I can't believe it's 10 years ago already.
28:54Thank God, our geek got his head up there over California Chrome.
28:59It was really an amazing day at Santa Anita, be there with our friends, and we just had a great
29:06day that day.
29:09Well, it started, I'll give you an example, and we weren't doing it at that time, but that's when we
29:16started thinking about these things, and it's exactly why we won.
29:23We played a straight Arrogate California Chrome Xacta.
29:28Now, yes, did we really like Arrogate?
29:31We did, but what I did at the time was I just looked.
29:36I said, hey, I'm going to need like $50,000, $60,000 here just to compete for the title, and
29:43I think I had $13,000 on at the time.
29:47And we just read the board, right?
29:51I had a bunch of friends with me, and we just read the board and found every combination that paid
29:56more than we thought it should.
30:00And that's what we got out of that, right?
30:04That combination paid almost $10 for two, and I think I'm getting that right, and one horse was like the
30:13eight-to-five favorite, and one was the nine-to-five second choice.
30:16So we got something like 30% value on our money there, and anyone statistically inclined, don't hold me exactly
30:27to that number, but it's close enough.
30:28So we got a huge value, and then on top of it, there's the equity in the contest.
30:35So we're always thinking about value at the end, right?
30:38You're always thinking like, okay, how do I leverage my selections by finding value?
30:46So while we didn't use a computer then, we used that style of analytical thinking that's now embedded in wager,
30:55right?
30:55So if you want to win a contest, you need to find value and leverage, right?
31:01Tony Zhao, who's probably the greatest contest player of them all, okay, he's looking for value constantly, constantly looking for
31:10value.
31:11You want to get paid $5 when you should be getting paid $4.
31:15That's how you leverage your advantage in those contests in particular, but it's that same sort of analytical value hunting
31:27that we're hoping to ingrain and wager.
31:30And as artificial intelligence is more accepted in general society, do you think it'll be adaptable to horse players who
31:37are quite oftentimes, you know, let's say I know young horse players,
31:40but mostly times it's, you know, close to retirement or just pre-retirement age players every day at the track?
31:47You know, so first off, I'd like to say, and I'm sure there's some marketing people out there think this
31:53is wrong.
31:53Like, I don't really love the term AI.
31:56It's just kind of a catch-all, right?
31:58For machine, are we talking about machine learning?
32:01Are we talking about chatbots that can have a conversation with you?
32:06Like, what are we talking about?
32:07Are we talking about a neural network?
32:10I would say this, is that, and I referred to it earlier, no one wants to get into the details
32:17of what our neural network looks like.
32:19I mean, I do.
32:20I find that fun.
32:22And our analytics team thinks that's fun, right?
32:25And trying to decide, should we use XGBoost or should we use PyTorch or what package of analytical language and
32:38software we should use is interesting to me.
32:40But to the consumer, even a technically adept consumer, they don't want to hear any of that, right?
32:47They want to know that these picks are coming from some sort of analytical framework, that the analytical framework's rigorous.
32:56And quite honestly, they just want to know if the picks are competitive or not, right?
33:01So what we try to do is translate the math, we try to translate the code to something that a
33:11consumer can use, kind of regardless of age, you know?
33:15Now, having said that, I do worry horse racing fans are typically not, or at least the ones who've been
33:23around a while, are typically not that amenable to new things and new thinking and new technologies.
33:31And just, you know, I know, like when you look at the racing form and formulator's an amazing tool, most
33:39of these guys just want their PDF.
33:41Like, can you print out my PDF, right?
33:45Okay, so I get it.
33:46I assume there's going to be some, like, time delay in the uptick, but all the better for early adopters,
33:54all the better for people who come to wager early and get the benefits of that.
34:00Definitely.
34:00Well, I appreciate your time, Joe.
34:02And, of course, best of luck with wager and we'll be on the lookout and seeing it on the keypad
34:06for successions.
34:07Okay, Naj, good to talk to you.
34:10Billy, thank you for joining us.
34:13I know many in the industry are doing fine.
34:16I know many in the industry know you, of course, through your connections through Ocean Reef Racing.
34:20But can you tell us about your background?
34:22And for today's topic, how do you feel artificial intelligence will best help their bread racing today?
34:29Yeah, no.
34:30Great.
34:30Thanks for having me on.
34:33Honored to be on a podcast talking about AI and horse racing.
34:36You know, a lot of people don't know my background in racing.
34:39We started off racing a couple of guys at my club back home when we exited our last software company.
34:45Asked us to get involved and we were a very small part of one of the first five horses was
34:49part of Flyline, which was a lot of fun.
34:52And then fast forward a little bit.
34:53My father and I had a farm in Versailles, Kentucky, and we befriended a couple of guys, Charlie O'Connor
34:59and a few others, where we ended up having racehorses with them.
35:04Next thing you know, we had seven partners down in Florida, where I live down in Key Largo, and up
35:10to 50 horses in racing.
35:11So a couple of years later in the Kentucky Derby, and now I think we looked at it today.
35:15We have parts of 72 horses, either in breeding, racing, foaling, pin hooks, the whole nine yards, parts of two
35:21stallions.
35:21So it's been fun to get involved.
35:24But my background is very interesting to others, not to myself.
35:28But I started off in technology and telecom back in 2008, came back to work with my father in technology
35:37and a managed service provider in 2011, where my team actually invented a software that we ended up taking globally
35:43to market.
35:44So our job was to move data packets back and forth from multiple locations across the world.
35:51So they would call it big data and software at the time, but now people would probably call it similar
35:57to AI, but we were basically an engineer in a box.
35:59So all software really is, is you do something faster, better, stronger, quicker, and cheaper.
36:05And AI is just that on an exponential scale, right?
36:09So AI and horse racing, I think, is a very interesting topic.
36:13We use a lot of it.
36:14But if you're not using AI in today's world and you're not learning, you're not living, in my opinion, because
36:22this, if you look back in 100 years, you're going to see that the invention of AI is going to
36:27end up being bigger than the invention of electricity, the automobile, and the Internet combined.
36:32I mean, that's what's happening right now.
36:34This next two years is going to be incredible.
36:37From what we've seen two years ago to where we are today is just, it's just night and day, just
36:41night and day.
36:42And you've been able to use AI technology to also develop Equitrack AI.
36:47Can you talk about that company, which you've established and how it's going to be used to help everybody who
36:52participates in thoroughbred racing?
36:54Yeah, for sure.
36:55When I was out of this, when I exited tier three in the software business, you know, we went into
37:01the venture capital side.
37:02So making early on stage investments and pre-seed series A, we did a lot of stuff with the Elon
37:08Musk ecosystem.
37:08So the last couple of weeks has been great in that capacity.
37:11And I said, I'd never go back into operating another software business just because of the 89 hours a week
37:16in the business travel, unless something presented itself to me that I really couldn't want to do.
37:22And most good businesses are built out of something that occurs or a problem that somebody is trying to solve.
37:28So for me, when we got into the horse racing, A, I had no idea what I was doing from
37:32the bill pay perspective.
37:33I'll be first to admit, I was one of the most habitual bad payers of all time because you're sending
37:39me snail mail to my farm.
37:40I live in Florida, to my house.
37:42I'm getting email.
37:43I'm getting vet bills.
37:44I have no idea.
37:45I have no idea what vendors are approved or not.
37:47It was a nightmare.
37:48So it was taking me 90 days to pay bills.
37:50And still some cases we've almost fixed that at this point.
37:54But, you know, what we did with Equitrack was we went and built an operating system that will ingest your
38:01bills in.
38:01So our bills gets into a system.
38:03It goes through with AI.
38:05It'll turn around and read them, checked by an equine bookkeeper who has the basis and the skill set to
38:12do so.
38:13They press approve.
38:13It's been looked at five times.
38:15It comes to me.
38:16I press approve as ocean reef racing.
38:18It goes out that night through what's called the EquiWallet, which is an FDIC-backed bank.
38:23And it syncs back to QuickBooks, IES.
38:27And then I have a real-time profile, a real P&L for that horse on what looks like a
38:33Facebook profile for a horse.
38:34So I've saved 70%, 80% of my time on a day-to-day basis on managing our syndicate or
38:39our interest.
38:40Or I would have left the sport.
38:41I mean, just point blank.
38:42Can you talk about the efficiency of especially people being able to use EquiTrack or AI in general over just
38:51creating more data points, but the actual usefulness that you say in the productivity of having your operations more streamlined?
38:59Yeah, 100%.
39:00I mean, outside of EquiTrack specifically, I mean, AI just in general in the day-to-day workspace.
39:06I mean, I have two little kids.
39:08Timing is the essence.
39:09My best work productivity, or if I want to have me time, it's before the kids get up or the
39:13kids go to bed.
39:13The reality of it is with AI tools like Otter, Loom to do videos, Grok, ChatGBT, Claude.
39:21I can name another 15, 20.
39:23They're really efficiencies that you can apply in your day-to-day life.
39:26If you were to use Otter to record a Zoom call you're on or a conversation, you can go through
39:31and it can have notes for you.
39:33You can go in and create a standard operating procedure for you.
39:36It can turn around and send that email out for you as well, and then it can be tracked and
39:41turned around.
39:42That would take an hour in previous.
39:43You can upload it into HubSpot.
39:45Say you have sales calls you want to do, those type of things.
39:48So it's all about efficiencies back in somebody's day.
39:50I implore people to use it.
39:52I live in a place down in Florida where there's a lot of older people, and I say, hey, use
39:57the Otter app or use an app when you're sitting there talking to your doctor, and then you can take
40:01it.
40:01You remember what they're going to say.
40:02They're going to send it to you.
40:03Go upload it in Claude and say, hey, I want a second opinion of a doctor.
40:06What should I be doing if I want a second opinion or if I want to go take more medicines
40:10or whatever for my joint pain or whatever?
40:14Use whatever application.
40:15It's an efficiency thing that you can call on experts because there's big data language in the background.
40:21So more opinions, more facets, right there at the tip of your tongue.
40:25And certainly in acquiring new owners is what thoroughbred racing needs to do, and especially growing our game.
40:32How do you feel that AI and other tools can be used to help acclimate owners, whether from the technology
40:38world or other worlds, such as Jason Wirth with baseball and diversifying and broadening our sport?
40:45Yeah, no, great question.
40:46I think that the best analogy I can give to people, especially Jason Wirth being mentioned, AI can be money
40:52ball for horse racing, point blank.
40:56You're going to, within the next three to six months, be able to go and say, hey, I want to
41:01go run a mile race on the turf at Del Mar, okay?
41:05What of these 5,000 horses entered at Keeneland in the sale?
41:09I want to upload those pedigrees into a tool coming out or into Claude, and it'll give you those 30,
41:16right?
41:16Now, you still have to vet it.
41:18You still have to go and have somebody look at it that knows what they're looking at.
41:21I'm not the person to go look at it, you know, a bloodstock agent or somebody like that, and then
41:26you have to put your value on it.
41:28But that, to a new person coming into the game, can be tremendous, right?
41:33I wish I would have had that years ago.
41:35It might have changed the way we bought certain things or whatever.
41:37I think to have other new people into the game, you're going to see more AI analytics that are huge
41:42in gaming.
41:42I mean, I've got more people asking me right now they want to go load the program because no one
41:45knows how to read the thing anymore.
41:47The DRF and the program, a 19-year-old doesn't know how to use that, a 15-year-old doesn't
41:52know how to use that, and those type of things anyways.
41:55You know, they load those in and say predictive analysis.
41:57That's the way the sport's going.
41:59That's the way we've got to be easy to buy from on the breeding side at the Keeneland sales so
42:04they can put it in a nomenclature term.
42:06You've got to be easy for the high school kids, middle school kids, or college kids to understand what they're
42:10looking and press the easy button.
42:12And the easy button, if you get it, AI will allow the easy button to occur in all aspects, whether
42:17you're young and just going to the track at $2 across the board, or you're a billionaire spending $20 million
42:24and you don't want to spend money on tax incentives, that easy button out there will just get more people
42:31into the sport.
42:33Earlier, you referenced that we're kind of in the new frontier of AI and this technology, especially within the thoroughbred
42:40industry space.
42:41Where do you see things going in 10 to 15 years from now and how in-depth we can get
42:45with all these tools?
42:47Well, look, I'm sure I'll offend some people when I say this.
42:50I mean, the old adage of the horse racing industry is they're high-end farmers at the end of the
42:56day that breed, a very expensive asset class.
43:00You don't become a horse trainer because you love sitting behind a computer to do administrative work or accounting.
43:04I can tell you that.
43:05I don't really like doing accounting and I have an MBA from SMU.
43:08I mean, I hate it, but it's just part of what business is.
43:12The reality of it is the horse racing business has always been 15 to 20 years behind on technologies because
43:19for whatever reason, it's not forward-facing on technologies.
43:23It has to be.
43:25We're an agriculture industry.
43:27It goes into a gaming industry.
43:29And it's a very small sector of people that make money in those, you know, in between of, you know,
43:35getting from, you know, inception to the racetrack to the Kentucky Derby, the Triple Crown and beyond the ascot and
43:42all those different things.
43:44And your question on the early aspect of it, I think that where we are now, I think in the
43:50next two years, you're going to see AI and the administrative side of being able to pay somebody as quick
43:56as Venmo-like payments is going to be almost done in the next six months.
44:00I mean, we do that now, but the idea of if I could win a race today at Belmont at
44:04the Big A on the purse money and I pass the drug test tomorrow and it hits the Encompass and
44:10the Paymaster and hits my Ocean Reef racing account.
44:14But today I happen to buy a horse in Arcana or Golfs or somewhere around the world that I can
44:20move that around the world and pay by Tuesday with the same money moving around in the flow of funds.
44:24That's where it's going to go very quickly.
44:26That's what fintech and actually blockchain was meant for, not cryptocurrency.
44:30That's what the idea was.
44:31Where we are in 20 years, that's, I mean, I can't look more than two or three years at it.
44:37I think rocket ships, I think we're going to be flying around on golf carts from racetrack to racetrack.
44:42I don't think that's far off either.
44:44I mean, I do see a bunch of venture, but specific for AI, for horse racing, I think you're going
44:48to see a lot of analytical tools that can go so far down into the bloodlines.
44:53It can go so far down into historical race results on return on investment and capital on broodmares on, should
45:01I put this stallion with this broodmare?
45:03Because historically, what it can win on the track versus the analytics on the business side of it that you
45:09can get through companies like Intuit and IES, which is, you know, we use QuickBooks as IES license with Echo
45:15Account, and you can slice and dice it 10 different ways.
45:19So there's going to be a bunch of different ways it'll go.
45:22I think what AI will do is it'll bring more people into the sport if we deploy those things, press
45:28the easy button for the new young kids.
45:30I think what we need to do is focus down, mark it on the sport to get more younger people,
45:35and I'm not talking about in their 20s.
45:36We've lost them at that age.
45:37We need to get the kids that show up to the track, that see the babies and the foals on
45:41the farms, that will go up and do those things that Keeneland does every, I think it's every Saturday, they
45:47bring people in.
45:47And let the kids come out there in the mornings, what David O'Rourke does up at Naira and takes
45:53families that have never been in the racetrack and takes them into the paddock and takes them into the winner's
45:57circle.
45:58In some cases, those kids are hooked.
46:00In 20 years, those kids might have a lot of money.
46:02They might be your next breeder.
46:03They might be your next Mike Propoli.
46:04They might be your next, you know, Gary Barber or whomever.
46:07I mean, that's what you want to see, right?
46:10Definitely.
46:10Yeah, and AI with that easy button.
46:13I mean, that's easy for a kid to understand.
46:15I mean, there's applications that are out there now that I've seen where, think about the horse profiles for, you
46:22know, basically a horse profile or a Facebook-like profile that you can let kids that come through those gates.
46:27You know, look, we've never actually done anything with the kids at these racetracks because we couldn't sell them a
46:32product because gambling is illegal for under 18.
46:34There's nothing wrong with giving that kid a phone number or an email address where you give them a free
46:39profile of the horse.
46:41Let them pick their top five favorite horses, you know, and from those top five favorite horses, you know, they
46:47can follow them along if they get a workout.
46:48They get an update from, you know, Equibase.
46:50They get pictures if there's uploaded.
46:52They get a race replay from Twitter.
46:54You know, all different types of things.
46:55That kid's hooked.
46:56He's in.
46:56Definitely.
46:57And can you talk to just the advantages of using Equitrack, especially on if you're a farm owner or a
47:03horse owner or a veterinarian, you said, I know billing and getting that capability and process of getting your, you
47:10know, statements out monthly.
47:11What other tools that Equitrack possess to help participants?
47:15Yeah, no, I mean, the main one point blank is I get 70% of my time back.
47:20Period.
47:21Look, if an owner adopts it, he's going to be able to get a real P&L.
47:25He'll know to move a horse on faster.
47:27He can go and say, you know what?
47:29It's going to take six months to earn that back on the track.
47:30Let's just go breed her, you know, or move her on, whatever, which way they want to do.
47:34From a vet perspective, if they go and send us directly the vet bills, we send those to our clients
47:38that are out there.
47:39They're going to get paid faster.
47:40So you're not going to have net 45 days.
47:42You know, we calculated the flow of funds that this really will with the Equitrack wallet will allow somebody to
47:47purchase an actual extra half horse.
47:49I know you can't purchase a half horse, but the flow of money will help people get more horses and
47:54grow the sport.
47:55From the breeding side of the house, no different on that, on stallion contracts and those things.
48:02There's automated stuff like that in there.
48:04So just think the administrative back office of having to have five, ten people,
48:08or if a trainer to have three people to go and move your digital certificate around,
48:13to go mess with HISA, to do your Coggins, to do all this stuff.
48:17It's all just seamless and streamlined, right?
48:20You're going to be able to do more with less, right?
48:23And that's the only way the sport grows.
48:24I mean, the other side of it is bookkeeping.
48:26Bookkeeping is done.
48:28AI will eliminate all bookkeepers' jobs in the next two years.
48:32It can probably do it.
48:32It can do it now.
48:33I know it can.
48:34The difference is the bookkeeper that deals with their finances and accounting right now
48:37ends up being more of the bedside manner of somebody that's talking to their doctor
48:41or somebody who's dealing with a dying parent.
48:43I'm not going to trust.
48:44You're not going to trust.
48:45Sure as heck, the horse people aren't going to trust AI doing their bookkeeping.
48:49They're still going to want to talk to Betty Sue or Johnny, who's been doing their books
48:53for years.
48:53We can help that person do more with less, and they can get a more real-time P&L, but
48:59they start talking to them that they're comfortable before the taxes, the paperwork, and the files
49:03get sent over to an accounting firm for the tax thing.
49:06So those are the best ways of efficiency.
49:08I mean, if you go to every horseman and say, I'm going to give you four hours back in your
49:11day, or not your day, a week, what are you going to do?
49:15Some are going to go work more.
49:16Some are going to go golf.
49:17Some are going to spend time with their kids.
49:19Some are going to go look at horses.
49:20Some bloodstock agents are going to go look at more horses.
49:23Four hours back in somebody's work week is a tremendous amount of time, and that's the
49:27minimum you're going to get back if you have 10 horses or more.
49:31Definitely.
49:31Well, I appreciate the time, Billy, and it sounds like AI and, of course, Ecotrack can be used
49:36to forward that easy button access for everyone.
49:39Yeah, no, it can.
49:40And I'll leave you with one more thing that I just got off the phone with somebody who's
49:43the actual rocket scientist in horse racing that's at a breeding operation in Lexington.
49:48You're going to see in the next year, you're going to be able to see AI that can ingest race
49:53replays, walking videos, that will see the cadence and the way that those bloodstock agents look
49:58at how those horses come down.
50:00It will be able to put some kind of scoring on, can that horse go and be a group one
50:06winner
50:06or a grade one winner.
50:08There's going to be a lot of skeptics on that.
50:09I'll be the first to believe.
50:10I've been to 100 horse sales.
50:12I can go look and tell.
50:13You can tell me that the thing is crooked.
50:15You can tell me that it walks or it's over or whatever, and I just don't see it.
50:18That's why I'm not the one that picks our horses in that case.
50:21But when those type of tools come down the line, layered on with the AI tools and the
50:26return on investment and the bloodlines and that easy button, the sport's going to end
50:30up growing very rapidly over the next 10 years.
50:32And I really believe that.
50:33Definitely.
50:34Like you said, money ball for horse racing.
50:36I'd be on board with that.
50:36Money ball for horse racing.
50:38Definitely.
50:39Thanks, Billy.
50:40Hey, thank you for having me.
50:41I appreciate it.
50:43Thank you for joining us.
50:44And we hope you learned more about artificial intelligence and how its impact will affect third
50:48but racing today and in the future.
50:51Thank you to our guests, Josh Isner of Delta Squad Racing, Billy Painter of Ocean Reef Racing
50:57and Equitrac AI, and Joe Applebaum of Wager.
51:00We'll look forward to seeing you next time on the TDN Business Hour.
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