News

Racing NSW must pump war chest into prizemoney to save the day

29th Nov 2010

Sydney Morning Herald - Max Presnell - Monday, 29 November 2010

Prominent owner Peter Horwitz says Racing NSW must pour funds into prizemoney - and quickly.

Some comments on Racing NSW's recent legal victory are necessary. With regard to prizemoney increases due to commence on January 1, 2011, a study was done nearly three years ago (January 2008) which was an 11-year analysis of prizemoney versus costs (1996, when Racing NSW was first established, through 2007). For this study, Sydney midweek first prizemoney was used versus the annual cost of having a horse trained in the Sydney metro area and, secondary to that, the average and median Easter yearling sale price increases.

The purpose of using city midweek first prize was to get away from the elite racehorse and concentrate on bread-and-butter racing. Even so, winning midweek in town is unachievable by over 50 per cent of horses. The inclusion of provincial and country prizemoney would not have changed the conclusion.

Advertisement: Story continues below In summary, in 1996 city midweek first prizemoney was 82 per cent of annual city training costs. By 2007, it had fallen to 54 per cent. Simple maths shows that prizemoney in 2007 should have increased by 50 per cent just to maintain the 1996 ratio. Were the average and median Easter yearling price increases used, the prizemoney increases necessary are in the 250 to 300 per cent range! The stats at November 2010 are worse.

We are told the recent legal victory enables Racing NSW to access the $120 million war chest and make a much-needed distribution to participants. But, as always, there is a but. A return to normal racing health is dependent on there being no appeal (in the courts). And, as always, there is certain to be an appeal. The lawyers will tell us no payouts can be made until all appeals are dismissed. Rubbish! There will always be a reason to sit on an ever-growing war chest and drip-feed the waiting beneficiaries over a long period.

In the highly unlikely event of a successful legal appeal, the bookies would do handstands if they could shave 30 per cent off their liability. At worst, this might reduce the war chest to $84 million but even the worst figure is growing by about $50 million a year in NSW. So Racing NSW can immediately release the $40 million irrespective of any appeal and any unlikely adverse result.

If non-stakes race prizemoney throughout NSW (city, provincial and country TAB meetings) is increased by a minimum 50 per cent - remembering to attain parity with 1996 now requires more than 50 per cent - that would use up about $40 million of the $120 million war chest.

For urgency and short-term purposes only, prizemoney increases for stakes races in NSW could be put on hold. Yes, stakes races also need increases, but the bread-and-butter prizemoney increases are much more urgent. And winning a stakes race has other benefits. Based on '09 stats, a 25 per cent increase in prizemoney for stakes races in NSW would cost just under $10 million. Stakes races are less than 3 per cent of all TAB races in NSW but receive just over 30 per cent of all NSW prizemoney.

Racing NSW could, conservatively, afford a far greater increase than 50 per cent in non-stakes prizemoney now, even if they pessimistically assumed some legalities went against them. It's often said that, in life, the longer money ordinarily due to you remains in someone else's hands, the less likely you are to receive the true benefits.