Straight Up – The biggest challenge facing Australia’s racing authorities

In this edition:

• A $78 million hole – Wagering slump and funding changes smash PRAs’ bottom lines
• Gambling ad reform delay set to be centre stage in federal election year
• Blueblooded fillies to the fore as NZB releases bumper 2025 catalogue for Karaka
• Rowe On Monday – A Mongolian foray, a Perth success for Foster and the battle to sell Winx’s new foal
• Run The Numbers – Breeze-up revival as two-year-old market hits new heights
• Winx welcomes healthy Snitzel colt
• Heidi Lester to head up Tasracing’s new integrity operations
• Railway glory for Neasham and Archibald as Johnston-Porter breaks his Group 1 duck

The challenge facing Australian racing authorities is not only that wagering is on a near three-year turnover decline totalling close to 30 per cent, but also that their funding models are in such a state of flux, it makes It nearly impossible for them to balance the books.

Take Racing Victoria for example. It registered its first loss in over a decade, $11.8 million, last financial year, but the funding model for this financial year is completely different after the end of the joint venture agreement with Tabcorp.

It has always said it will be no worse off under the new deal, but with the rising costs of running racing and the fluctuating nature of returns through both Point Of Consumption Tax and racefields, even the best financial minds would be scratching their heads.

It is far from just a Victorian problem. Queensland’s funding shake-up took place nearly two years ago, yet the way funding is flowing through is still far from consistent.

New South Wales is also likely to seek major changes to its current funding model and a change to its agreement with Tabcorp, which could mean a rise in POCT. How do those possible changes shake out over the following few years?

PRAs do usually have cash reserves to deal with matters of transition, but the lack of commercial clarity during a time where wagering turnover is plummeting is not a positive for an industry which relies on discretionary investment for its survival.

Combined, Australia’s PRAs reported over $78 million worth of losses last financial year, with approximately $50 million reduction on money sourced from racefields funding.

Adding to the uncertainty is the decision by the federal government to push its reform of gambling advertising into 2025, with the likelihood that it will become centre stage in a federal election.

Wagering companies estimate the hit to racing alone of a total ban could be as much as $300 million in the first year, but there has also been a sense of both the WSPs and the racing industry wanting to get a decision made sooner rather than later so they can adapt to the new environment.

It’s been a big week in bloodstock and breeding, with the release of the New Zealand Bloodstock National Yearling Sale catalogue and the news that Winx has foaled a colt by Snitzel.

In this week’s Rowe On Monday, Tim Rowe chats to a Mongolian-based investor who stepped up at Karaka last week as well as to Richard Foster, the breeder of Port Lockroy, who gave jockey Clint Johnston-Porter a first Group 1 win in the Railway Stakes.

Run The Numbers takes a look back at the three breeze-up sales staged in Australasia over the past couple of months, which saw record total spend and a record average, driven by increased investment from Australia.

Finally, Tasmania’s integrity revolution continues to take shape with Heidi Lester announced as Tasracing’s new Chief Racing Integrity Officer.

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Regards

Bren O’Brien

Managing Editor and Founder

The Straight