2011 REPORT ANNUAL - Racing NSW

Chairman's Report
Although appearing to be a comfortable trading result for
the year, a profit of $2,920,012 needs to be reviewed with
an appreciation of the influence wet weather, wagering
trends and race fields revenue had on the result.
Although pleasing to produce such a positive trading result
for the organisation, it could not have been achieved
without a reduction in the number of race meetings
funded (552 scheduled down to 483 conducted), which
came at the expense of race club earnings. Add this
component to a further reduction in race club revenue
due to lower TAB turnover and country race clubs did an
outstanding job in generally producing stable trading
results for the year.
Notwithstanding this position on Racing NSW Country
expenditure, it was necessary to secure an advance of
$10,737,000 on race fields revenue collected by Racing
NSW, to support race club funding and the current levels
of prizemoney.
Consequently, the importance of the race fields legislation
cannot be overemphasised and the result of the High
Court Appeal is eagerly awaited.
The court hearings now take on the appearance of a
watershed point in time with the shift in wagering habits.
Although the introduction of an expanded fixed odds TAB
product during the year arrested some of the drift to
alternative wagering operators, it is clear that consumers
are increasingly attracted to forms of wagering other than
the traditional products.
Future revenue streams from wagering will depict the size
and scope of Country Racing. For that reason the Board
has independently and through representation on the
Racing Industry Consultation Group sought to have the
financial viability of race clubs reviewed within the
boundaries of the Racing NSW Strategic Plan.
The information outlined above gives rise to the fact that
certain objectives need to be reviewed if clubs are to be
financed adequately.
The merger of the metropolitan race clubs brought the
spotlight onto rationalisation and although the Board
constantly has the country structure under review, there is
no evidence to suggest that there are significant benefits
from scaling back race club operations.
There is justification however in monitoring the number of
races and race meetings conducted, to ensure that future
wagering revenue can support the set level of activity.
In this regard the Board produced during the year, a
Business Plan that contains strategies if implemented, to
maximise returns through the allocation of race meetings.
The Plan was forwarded to the Racing NSW Board for
consideration.
However it is reasonable to assume that the Plan will not
be furthered until the race fields dispute is resolved, as it
contains strategies for the Centres of Excellence outlined
in the Racing NSW Strategic Plan.
Funding for the Centres of Excellence is linked to race
fields revenue, however the Board has taken a position on
the number and location of the proposed Centres aligned
with race meeting allocations.
As highlighted above, wagering revenue will continue to be
a moving target in the foreseeable future. However media
rights are now seen as an important component of the
overall package. The availability of broadcasts as a means of
increasing wagering revenue through means other than
existing TAB outlets and into homes, is now a major
consideration.
For that reason, during the year the Board commenced
discussions with the two current broadcasters to consider
contract renewals but just as importantly, to gauge their
reaction to new technology and a new customer base.
Whilst the animated racing game Trackside does not fall
into this category, nevertheless the sale of the technology
to provide funding for primarily the redevelopment of
Randwick Racecourse, does have consequences for
Country Racing.
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