Industry Trends – Power Brokers

Are online auctions the wave of the future?

story by Kimberly French

On July 6, Atlanta became the fastest female trotter in history with a 1:49.1 score at The Meadowlands in the $250,000 Graduate Series final. The 4-year-old daughter of Chapter Seven – Hemi Blue Chip had already etched her name in harness racing’s archives when she became only the 14th filly to capture the Hambletonian in 93 years.

The mare, however, was also responsible for establishing another milestone when she sold on Feb. 15 through the online auction service onGait.com for $1.55 million, the highest bid ever placed for a Standardbred through that medium.

“I feel that Atlanta’s sale on our site demonstrated the validity, versatility and utility of online auctions,” said Maurice Chodash, onGait’s co-founder. “They provide people with a lot of flexibility and opportunities they did not previously have. I receive emails and calls all the time from people thanking me for connecting them with a horse they might not have come across because of location. This kind of system allows horses to move more freely and brings the world closer together.”

The rise of the internet has played a tremendous role not only in how business is conducted, but in every aspect of people’s lives, including how products and services are marketed, sold and purchased.

Long before the groundwork was put in place for the “information
 superhighway” we know today, scientists such as Nikola Tesla envisioned a world-wide wireless system to transfer and procure data. In the 1930s and ’40s, there were also proposals to construct a mechanized, searchable format to conduct research from books and periodicals in the media world.

The first feasible program that would later lead to the internet was introduced in the 1960s when internet Hall of Fame member Dr. J.C.R. Licklider developed memos outlining an “Intergalactic Computer Network.”

“His original and far-sighted ideas outlined many of the features the internet offers today: graphical computing, user-friendly interfaces, digital libraries, e-commerce, online banking, and cloud computing,” states Licklider’s Hall of Fame profile.

During Licklider’s time as a director at the U.S. Department of Defense in the ’60s, his work was integral to the creation of Advanced Research Projects Agency Network, or ARPANET. ARPANET allowed multiple computers to communicate on a shared network by using packet, which is a method for transmitting electronic information. Packet switching is one of the primary building blocks of today’s internet.

According to History.com, ARPANET instituted a “communications model that set standards for how data could be transmitted between multiple networks on Jan. 1, 1983. As computer scientists began to construct and connect a network of networks, the modern internet was born. The online world in the form it is now known took shape in 1990 when computer scientist Tim Berners-Lee debuted the World Wide Web.

Eleven years after Berners-Lee unveiled his invention, Chodash and his partner, Eric Cherry, launched onGait.com. The two men had met earlier through their involvement in the sport and operated the National Raceline, which supplied instant race calls and results, for the previous 12 years together.

“The internet already has played a huge role in allowing horse owners to follow their horses, as well as stay abreast of happenings in the sport,” Cherry said in onGait.com’s initial press release. “We think horsemen everywhere will come to rely on our site to keep them up-to-date on what’s happening in the horse market, especially when utilizing my favorite feature, EmailAlert, where you get notified by email the moment the kind of horse you’re looking for gets listed for sale. You’re then just a mouse click away from viewing that horse’s most recent race lines as well as watching him in action on your computer. We are very excited.”

The partners decided with the technological advances the internet provided, it was time to turn their attention to what the future held in store.

“Eric and I realized the world was changing and the National Raceline did not serve much of a purpose anymore with the internet in place,” Chodash said. “We knew it would require a lot of hard work and time to get off the ground for many reasons. The horse racing demographics included people that might not have computers and the horse racing community is typically slow to embrace change. We knew it could take quite awhile for it to catch on, but we are very pleased with how we have grown and the direction we are taking.”

Bob Boni, who manages Northwood Bloodstock Agency, Inc., one of the largest and most respected organizations of its kind in North America, concurs that online auctions and other internet sites to buy and sell horses possess utility.

“It has taken some time for onGait.com and other forums for online sales to gain some traction in the market,” he said. “But they proved they have their place.”

Paul Spears, president of the Standardbred Horse Sale, possesses a similar perspective.

“I honestly do not think [the online auction] has affected us very much,” he said. “If there has been any dip [in sales entries], it has been mares in foal and very good race fillies. I think that is because owners are holding on longer to their mares that are in foal and race fillies make more money on the track. I also think there is more private sale activity for elite mares.”

The site not only provides a gateway for buyers and sellers to connect through individual auctions, but also gives them a foothold in the yearling sales market. The company recently announced it would be conducting a fall yearling sale with entries from Winbak Farm.

The onGait.com site also provides services for the Standardbred Retirement Foundation and for the New Vocations Standardbred Stallion Auction.

“I do not think the purpose of the site is to replace traditional sales,” Chodash said. “But it provides a service to people who maybe only have a few yearlings they want to sell and the timing of the sales or formats of them might not suit their needs. It provides more options for people to manage their business decisions.”

Boni agrees that online auctions and other internet arenas where Standardbreds are bought and sold will not replace or alter the sport’s marquee sales such as the Lexington Selected Yearling Sale or the Standardbred Horse Sale, but do have their own merit.

“There will always be something about two or more bidders competing to purchase a horse in the sales ring,” he said. “I think it also depends on the type of horses buyers are seeking.”

Spears is of the same mindset as Boni.

“Most of the buyers at the sales want to inspect horses personally,” he said. “The bidding experience is also very different. Online auctions offer bidding at very specified times. At a live auction, you only have a few minutes and you must make a decision.

“Also, some yearlings are sold online, but those yearlings are not
necessarily ones that would be attracted to the sales.”

Although the most well known,
onGait.com is not the only online forum that services the harness racing industry. There are a variety of websites or social media groups where Standardbreds are sold. Many of those websites are devoted to all disciplines and breeds. Examples include EquineNow, Equine.com, HorseWeb, HorseClicks and Dream Horse Classifieds. There is also a public group on Facebook, “Standardbred Race Horses [sic] for sale,” with more than 6,600 members.

“I feel one of the things that sets us apart and has contributed to our success is how available we are,” Chodash said. “I encourage people to contact us either by phone or email with any questions or concerns. I’m also happy to provide advice on when a horse should be placed, or to walk people through our process. If someone is not immediately available to answer questions, we get back to them right away. We believe in excellent customer service and are committed to upholding that standard.”

In recognition of the role technology plays in the sale arena, the USTA unveiled its eSales program at its 2018 annual meeting. The web-based application provides sellers with the ability to electronically sign as a seller and provides the sales company with a simplified process to release the registration to the purchaser by allowing them to authorize a transfer of a horse without the need of a hard-copy registration when the horse has a paperless registration.

“By helping sales companies conduct their business, we are also streamlining processes for our members,” said USTA Assistant Registrar Aimee Hock in her introduction of the program. “Moving into the digital age of electronically authorizing transfers of ownership is an exciting step forward as we work to improve our Online Services capabilities for our members.”

Chodash said he does not know what the future holds, but acknowledges establishing onGait.com and its progression brings him great personal satisfaction.

“I have loved the sport since my uncle took me to the track when I was 13 years old and I’m 56 now,” he said. “Just to know we can be of service to the industry is very gratifying.” HB

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