Racing NSW stays in surplus despite $13 million wagering hit

Racing NSW has recorded an increased operating surplus of $12.9 million, balancing a decline in wagering revenue of nearly $13 million with a $6.5 million reduction in its operating expenses.

The racing regulator’s 2024/25 annual report was released this week, with the increased surplus posted despite softer wagering leading to a drop in overall revenue of just over $7 million.

Wagering revenue fell to $302.8 million, down 4.1 per cent year on year and 9.6 per cent on its peak of $335 million in 2022/23. It is the lowest total since the 2020/21 financial year.

That follows a broad annual double-digit decline in wagering activity on horse racing over the past two years across Australia. Precise details on wagering activity in NSW racing are not provided in the annual report.

Wagering revenue, as defined by Racing NSW, is an amalgam of race fields fees and interest, tax parity revenue, point of consumption tax revenue, odds and evens revenue, Everest slot revenue, revenue from Kosciuszko ticket sales, sponsorship revenue and prizemoney subsidies.  

Overall, Racing NSW revenue was down $7.4 million, with increases in interest, insurance returns, outside broadcast and property revenue all helping offset the drop in both pure wagering revenue and ‘first charge’ revenue derived from TAB distributions. That dropped 21 per cent from $7.1 million to $5.6 million.  

Racing NSW has also cut operational costs from $404.8 million to $398.2 million. Overall prize money has dropped to $334.4 million from $336.9 million. Other areas where costs decreased were thoroughbred race club maintenance, legal costs, and property costs.

A significant boost to the surplus was the revaluation of the Racing NSW Workers Compensation Fund, which saw possible liability reduced from $54.3 million to $52.8 million.

In the 2024/25 year, the liability increased by $4.95 million. The wash-up is a near $6.5 million difference on the bottom line, more than half of the surplus and the entirety of the cost savings.

“Racing NSW again reported a solid operating surplus of $12.9 million in FY25, up from $12.6 million in FY24. This is despite the downturn in wagering and tougher economic conditions,” Racing NSW chief executive Peter V’landys said in the report.

“This result was even more impressive given the reduced First Charge to the NSW thoroughbred racing industry from the TAB distribution of $5.6 million, down 21% from $7.1 million in FY24.

“The First Charge has traditionally been paid to cover the operating and capital costs of the principal racing authorities for the three racing codes in NSW. The reduction in the First Charge means that more money is distributed to race clubs from the TAB distribution.

“This reduction is in addition to the direct support of $23.7 million provided by Racing NSW to NSW thoroughbred race clubs from the Club Sustainability Provision.”

Racing NSW’s use of provisions to ‘future-proof’ the industry has drawn external scrutiny, especially during last year’s Select Committee inquiry into the sale of Rosehill racecourse.

According to the annual report, there are $292 million worth of provisions across the prize money sustainability, club sustainability, and capital expenditure frameworks.

“These funds have been specifically set aside to safeguard the industry against future crises or economic downturns, providing a strong financial foundation that will enable Racing NSW to respond swiftly and effectively to any challenges that may arise,” V’landys said.

Prize money provisions are now at $104.1 million, slightly down on last year, with $2 million topped up by Racing NSW, while club sustainment provisions stand at $29.7 million, $5.1 million less than last year, with $25 million allotted as a top up by the regulator this financial year.  

The capital expenditure provision has been drawn down by $11.6 million in capital works to $100.4 million.

Horse welfare provisions increased by just over $800,000 to $20.8 million.

 “Racing NSW has once again delivered a very successful year, consolidating its position as Australia’s leading racing jurisdiction across every key measure,” Racing NSW chair Saranne Cooke said.

“This success reflects the impact of Racing NSW’s proactive initiatives over the years, which have generated new industry revenue and ensured record prizemoney and returns to owners.”