News

Politicians urged to act to save horseracing

21st May 2009

Sydney Morning Herald - Craig Young - Friday, 22 May 2009

AUSTRALIAN RACING BOARD chairman Bob Bentley yesterday issued a blistering attack on the country's governments, corporate bookmakers and betting exchanges while warning the $5 billion industry faces an annual loss of $126 million in betting-related revenue.

"The time for politicians, both federal and state, to act is now," Bentley said in an unprecedented call to arms last night. "There is no time for navel gazing or procrastination. Consigning the issue to the too-hard file is not acceptable.

"Stripped down, the problem is not complicated and the solution is not rocket science. All that is required is for the industry to be united for once and demand our politicians have some backbone and take their head out of the sand."

Bentley said the industry "faces the greatest challenge in our lifetime" due to "the rapid growth of new types of Australian wagering providers, corporate bookmakers and betting exchanges".

If the new arrivals "do as they please without due regard" to the industry, Bentley predicts "there will be a devastating effect on racing's viability".

"In its March, 2007 economic report, [consultants] IER highlighted that the racing industry contributes more than $4.93 billion to the national economy and sustains over 47,000 full-time jobs," Bentley said.

"Moreover, nearly 200,000 people or 1 per cent of the Australian population are involved in the thoroughbred racing industry as a participant, employee or supplier.

"In terms of taxation revenue, $1.2 billion in taxes is generated annually for the federal and state governments."

This week the Herald revealed the NSW racing industry is facing a funding crisis, with prizemoney cuts of some 20 per cent mooted. The Sydney Turf Club, home of the world-renowned Golden Slipper, is set to post a financial loss, while the time-honoured Australian Jockey Club remains a worry.

Bentley has called for all wagering operators to pay "a product fee to the state jurisdiction on which wagering is conducted. The corporates and exchanges are not interested in paying the 1.5 per cent on turnover as mandated by the NSW State Government's race-fields legislation. These entities are only interested in paying a percentage of gross profit.

"Individual pieces of state legislation being tested by the 'free riders' and the 'pay-what-we-like operators', is subjecting the industry to too much uncertainty," Bentley said.

"Crucially, the federally endorsed mandate must enable the racing industry to set the fees payable having regard to objective criteria."

Bentley pointed out "the current commercial agreements under which totalisator operators pay product fees to the industry were arrived at in tripartite negotiations involving the government, industry and licence holders" and "the racing industry was acknowledged as the content originator that made the wagering business possible and product fees were set that delivered fair returns back to the industry".

"This is in complete contrast to newer types of wagering providers who refuse to recognise the right of the racing industry to set its own prices for wagering," Bentley said.

Corporates offering "totalisator odds" and the recently introduced "retail exclusivity", whereby operators are supplying betting terminals to pubs, clubs, etc enrage Bentley. "We hear a great deal about newer operators 'growing the pie' but it looks blindingly obvious that cannibalisation of existing business from TABs is front and centre," he said.

Another Bentley concern is Irish betting monolith Paddy Power buying a 51 per cent stake in Australian corporate Sportsbet. "As the former chairman of the British Horseracing Board, Peter Saville, said several years ago, 'the funding of Australian racing is something that British racing should emulate', not the other way around," Bentley said.

"Paddy Power has fired the first shot, naturally they have been aware of a vulnerable and divided [Australian] betting market and can see the opportunity to pursue the business model on wagering that sees prizemoney levels in Britain languish at unacceptable levels and bookmakers opposing an increase in funding of Irish racing."

He asks "what will remain of our racing industry after the corporate bookmakers have been allowed to do as they please?" and warns the industry "will be a skeleton of its current self. Corporate bookmakers will then move on elsewhere with the tide, only racing will suffer," Bentley said.