British entrepreneur revives Shanghai Race Club for China's aspiring classes
One Briton is reviving the Shanghai Race Club for the mainland's aspiring classes. But owning a steed is mostly virtual, writesCharley Lanyon
British entrepreneur Byron Constable is breaking all the rules to bring the sport of kings back to China.
While the mainland plays differently in many ways, it may still come as a surprise to learn that the venerable Shanghai Race Club (SRC), which he revived, operates without a clubhouse, without betting, without a racecourse and, believe it or not, without horses.
It wasn't always this way. When the British established the SRC in 1862, the club operated several racetracks and its opulent clubhouse was considered the most expensive in the world.
The cream of Anglo-Chinese society became members and horse owners included many names familiar to anyone with passing knowledge of Hong Kong history: Jardine, Keswick, Kadoorie, Sassoon and Chater.
In the 1920s and '30s the SRC was already synonymous with high society in Shanghai. All that came to an end when Japanese troops invaded in 1937 and took over the clubhouse for its base of operations.
After the Chinese Communist Party seized power, horse racing became illegal and the SRC was shut down. It lay dormant for 70 years until Constable stepped in, in 2008, after the sport had gradually been reintroduced in the '90s.
Since then, he has launched a new model of virtual racing that might influence clubs globally.
It allows SRC members to buy what amounts to a time share in a horse, whose races they can follow live through a broadcast deal with At The Races, the largest dedicated horse racing channel in Britain and Ireland.
Constable went to China about 15 years ago to start what was then the country's only online luxury marketing platform. While working in Shanghai, a historian friend, Patrick Cranley, told him the story of the SRC. It spoke to two of Constable's passions: luxury and horseracing.
Despite having been closed for more than half a century, the SRC still resonated with the Shanghainese and the newly moneyed class across the mainland - thanks in no small part to its presence in period television dramas.
"It was the ultimate luxury brand," says Constable. "I couldn't think of anything more amazing; it was the epitome of high society in China."
The club's old racecourse had been transformed into the People's Square and the club building turned into the Shanghai Art Museum in the '50s.
But the SRC logo was still up for grabs, so Constable put his lawyers on the case and bought the global rights. Still, that's all it was, a brand, with no buildings, no horses and no members.
As he learned more about its history from the families of former members living in Britain, he began to develop a vision for its future.
Constable, who was in Hong Kong recently to give a talk at a Web Wednesday event, admits he was "at a bit of a loose end" about the venture: gambling is illegal in China and he lacked the funds to build a racecourse. "It's like Louis Vuitton not being able to sell handbags," he says.
But another friend gave him an idea that would change everything.
"He said: 'Byron, you love technology and you love luxury. Couldn't you make it possible for someone to buy a racehorse through their phone?'"
That was how the SRC was reborn. Now, at his website paoma.com - through the SRC - you can buy a horse minutes before a race and watch it compete on your mobile phone.
And if you don't have millions to spend on a horse? Well, you can buy one for one race for only a few hundred US dollars.
Before we get to the really revolutionary stuff, it is worth pointing out that the SRC does have a handful of members who are true racehorse owners, and considerably more who have the funds to buy a horse of their own.
The SRC teaches them about racing and introduces them to racing society.
For China's super rich, Constable says the appeal of horse ownership is clear: "They've bought yachts, they have jets, and the next step is the racehorse. What else do you spend US$50 million on, then roll it down a grass slope ... and bash it against other horses. It's incredible."
For this kind of customer the SRC acts as a bridge to the famously closed society of British racing.
"We bring them into the society of racehorse owners, particularly in England where we have strong connections.
"The highlight of every year is Royal Ascot ... We took a whole group of members - government officials and billionaires - to Royal Ascot this year and took them around to meet the aristocracy and completely embedded them in the whole culture."
Still, the proportion of SRC members who can afford racehorses is very small - about six people who, between them, own nearly 300 horses. Another 600 are potential owners. But the majority, about 6,000 people, are what Constable describes as aspirational owners.
These are members who "do not own horses and never will own horses", but crave the cachet that comes with ownership.
But as Constable says: "Huge amounts of Louis Vuitton's money is made from people who can only afford to buy a key ring."
It's in catering to these "key ring" members that he has fundamentally changed the rules of the game. He has pioneered a system where punters on the mainland can buy the ownership rights to a horse for one race. The horse's full-time owner uses this fee to leverage against his risk and agrees to share half the prize money with the Chinese owner if the horse wins.
What SRC offers then is the identity of ownership without the astronomical price tag.
Picture this, a racing fan on the mainland lays out a few thousand US dollars to buy a horse for a big British race. He invites friends and family to his local club where they rent a room and watch the race, which is streamed live through the SRC (At The Races tailors the content for the Chinese market, as a live sports channel with all betting references removed).
There on the big screen, in front of all of his friends, is a horse with his name listed next to it as the owner, racing against steeds owned by Queen Elizabeth II or Sheikh Mohammed of Dubai.
"The technology is there to make it a beautiful experience," says Constable, who grew up next to a track in Wimbledon. "It makes the owners feel absolutely tremendous; they raced against a king and a queen. How often do you get that when you buy a luxury product?"
Identity is something Constable comes back to again and again: "Owning a racehorse, it's not quite as crass as a red Ferrari but it does the same thing - it brings with it an identity.
"It's all about vanity. Why else do people join clubs?"
But why horse racing?
First, there is the pedigree. Horse racing is known as the sport of kings and, forgetting for a moment its less savoury reputation as a form of gambling, it has long been the exclusive purview of the rich and influential.
The SRC, in particular, has the historical heritage as a symbol of the top echelon of Chinese society. As an aspirational fantasy, it is unbeatable.
Horse racing also boasts the rare combination of exclusivity and a moderate learning curve.
"Horse racing is such an intrinsically easy sport to understand," Constable says.
"It goes from there to there. It only takes three minutes."
Perhaps the greatest advantage with following the races on the mainland is the timing. While in Europe races take place during the day, in China they are broadcast live at 9pm, perfect for dinner parties and after-work gatherings.
Constable is only just getting started: "There is a huge bracket of aspirational racehorse owners. We're talking in the tens of millions. Absolutely enormous.
"It's my dream, and I don't know if it will happen, but ... my job between now and 2020 is to get hundreds of millions of people to become aspirational racehorse owners.
"I believe that if it's done correctly horse racing could become the number one sport in the world."