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paraletic likes this post.
RIO likes this post.
SHOULD THE WA GOVERNMENT SELL THE TAB?
Mike Reindl
Business, Corporate, Financial and Project Advisory Services
The
simple answer is "It doesn't matter". Whether the WA Government should
sell the last reamining state-owned TAB is not the issue facing the
racing industry. The issue is around governance and funding; and the WA
Government can address both with or without the sale of the WATAB.
Governments of both persuasion have previously received advice about
how two important steps must occur and how neither of those steps
commits Government to selling the WATAB but would strengthen
the sustainability of racing into the future.
Firstly, Government must determine a governance structure capable of
delivering on the needs of people in the industry. One where people want
involvement in the sport and others are willing to come along as
spectators watch horse and jockeys compete.
Currently, the WATAB operates as part of RWWA, through a relationship
established in legislation, meaning the WATAB is presently not a
separate saleable entity.
Combining the racing industry and the TAB made sense in 2003, when
most wagering occurred at the racetrack or through brocks and mortar TAB
outlets.
However, in 2017, the wagering market is more diverse, with 80% of
wagering occurring via mobile devices. Added, less than a third of the
recently announced $150 distribution to the racing industry came from
the TAB's own operations. If not in 2016-17, other wagering providers
would seem to have contributed a greater share to the industry’s
distribution, than the WATAB.
Having a single entity providing both racing and wagering no longer seems relevant.
Separating racing and wagering into separate entities does not commit
Government to selling the WATAB but unencumbers racing; and permitting
racing to determine its own destiny with regard to race programming and
attracting participants and spectators back to the sport.
Secondly, racing needs a funding model representing the current
wagering and sports environments. The old one is broke because it
assumes the WATAB funds the industry, which is no longer the case.
With other major sports recently agreeing new revenue sharing
arrangements, on a similar consideration, racing needs a distribution of
around $170 million per annum, with additional funding paying for
infrastructure through a grants programme.
WA racing produces an attractive wagering product, as national
wagering on races from WA have increased at 2.3% per annum over the past
10 years. However, WATAB’s inability to maintain market share has seen
there wagering on local racing falling at 2.1% per annum over the same
period.
The industry needs funding linked into the growth areas. Therefore,
whilst wagering still acts as racing's major revenue source; rather than
one wagering operator serving an isolated market, as in 2003, the
current situation reflects multiple wagering providers serving a global
market.
Hence, any funding model must reflect the change in circumstances
going forward but changing the funding model doesn’t commit the
government to a sale of the WATAB and they can start now. It may also
make the WATAB more attractive to buyers.
Separating the WATAB from racing, charging the new WATAB similar
product fees as other wagering operators and introducing a
point-of-consumption tax on all wagering, would meet the quantum of
funding required by racing. Added to this, combining interest on general
reserves (the racing industry’s savings account) and the return of
unclaimed dividends provides infrastructure funding of $10 million per
annum.
The relevance of having one entity managing both racing and wagering
no longer exists. The connection between industry funding and the WATAB
no longer exists.
If Government addresses these two matters and then so chooses to sell
the WATAB, so be it, the matters addressed gives racing the ability to
determine its future, with an appropriate funding model comprising
contributions from all wagering providers.
Appropriate governance and funding means it shouldn’t matter with whom a person places a bet or who owns the WATAB.
My trainers costs have gone from 1800 all up to 2500+++. And come out on average at 3k
We had a horse win a 3yr old midweek in 2009 and the prize money was 22.5k. We had one win a 3yr old midweek race last month for prizemonymof 22.5k
I don't think the extra 600k or 50% increase in bonuses for the wealthy 10% of operators is a good barometer for fundignincrease to the entires industry.
In 2009 a midweek win and a top 3 place would pay your yearly bill. In 2017 you need a Saturday win and top 3 place to break even. And it is rare to get one of those hors s, let alone every horse at that level....very year
On a tablet and after 5 years still cant drive it properly...apologies for the spelling!!!!
Mid week stake money hasn't increased because a few years ago it was decided that Pinjarra, Bunbury, Northam and surprisingly Kalgoorlie would have 100% funding to mid week stake money levels.
So any increase to mid week stakes would see the other 4 clubs have similar increases which would impact the whole stakes budget.
RIO likes this post.
People may suggest that it should have been spent differently but the bottom line is that in ten years the return to industry (all 3 codes) has doubled.
Payment of 6th to 10th on Saturday comes at a cost of $1.25m is another example of increased stakes.
Vic ave $120k
WA ave $50k
Hard to say about quality of horses. The 09 horse was a Testa Rosa bred gelding that never won another race. The 2017 horse was a Flying Pegasus filly that destroyed one of Mr Peters Highly fancied Piero's. I could give you my opinion of which one is better, but it'd be different to the somebody else's
Having increases to the total stakes paid out isn't supporting the industry in total. It is rewarding the owners of Saturday city winning horses. If we want full fields week in week out; meeting in meeting out, we need to reward the winners of all races. The people winning the big dollar races will keep coming back as they have had significant stakes increases. But who will continually invest 30k/year per horse to hope to get a Saturday win and break even???? That group is reducing massively, and continues to go unaddressed.
It is ludicrous to keep the prize money the same for midweek races for close to 10 years and expect that people will keep playing that game. I actually think it was about 30k in 07/08 and then went down in 08/09 to 22.5k.. but can't be bothered checking
I'm not sure the best horses in WA go through the sales ring anymore FM, so that may not be as good an indicator as it once was??
Tivers likes this post.
First, total distribution to the 3 codes has doubled in 10 years.
2nd, is about the way that funding has been distributed.
Can disagree about the way it has been spent but can`t deny it has been spent.
RIO likes this post.
runyon, RIO likes this post.
Yes good point so I don't know how it cost 1.25mil to instigate?
Did I split the conversation?? Sorry about that I was just trying to highlight how overall funding has increased significantly from RWWA, but there are still large holes in the funding for participants. If Saturday racing is the be all and end all of this codes futrue, then if it doesn't support the pathway for participants to progress through we will have a vacuum of horses coming through..... and I think that is what we have.
As Carey has said for years - and Tivers and I have eluded go over the same period - no depth in the racing stocks. Which isn't good for anyone... Well good for east coast stallions, auction houses and bloodstock agents, but not the best for many parts of the WA industry.
most races were 50k and some 60k, none less than 50k
so how can the stakes be more if saturday prizemoney is less now than then?
midweeks......
ascot 22/10/2008....most races 22.5k a couple with 20k and 1 with 17.5k, and there is no way it's more now.
also my memory tells me they were 25k midweek before then(2008) and there was a reduction.
perhaps you are just wining more prizemoney these days, which makes you think stakes are through roof when they're not.
dunno about provincials so they may be more.
RIO likes this post.
"However, in 2017, the wagering market is more diverse, with 80% of
wagering occurring via mobile devices. Added, less than a third of the
recently announced $150 distribution to the racing industry came from
the TAB's own operations. If not in 2016-17, other wagering providers
would seem to have contributed a greater share to the industry’s
distribution, than the WATAB."
There has been a lot of rhetoric
regarding the performance of RWWA and the TAB but the facts are that RWWA
distribution to the racing codes has increased from $58.8m in 2004 to a record
$152.2m in 2017 an increase of 158% against the Reserve Bank inflation rate of
38% for the same period. This is an outstanding result and the information is
not privileged or confidential and is readily available under Corporate Reports
on the RWWA website. Most private enterprise businesses operating in WA would
be envious of this performance. The WA racing codes continue to punch well above
their weight on a national basis when comparisons are made on a population
basis. Up until 2016 the increases have gone to Thoroughbreds 160.8%. Harness 113.2% and Greyhounds 112.2%. The cost of RWWA's racing services has increased by 58.9% over the same period.
Fastmoney likes this post.
i don't know whay i do these things as it matters not at all to me, but.......
things are not necessarily what they seem, or what you read in rwwa blurbs.
for instance if you removed all black type races(ANY group or listed) from the equation, you would see where the extra money was given.
it certainly was not given to run of the mill races.
so it looks to me as if the guys that win all the big races, are the only ones to benefit.
dunno why our $ sums don't match exactly, but mine is just all races at ascot or belmont for the relevant season.
Total spend includes all 3 codes and funding to clubs.
Everyone can disagree with how the money was spent but it was spent.
Owners, Trainers, Jockeys and even Bookmakers Associations were involved in discussions on how stakemoney was distributed.
In the last 10 years the prizemoney in standard provincial races has gone up about 50% while the prizemoney at the midweek meeting in town has stayed the same. Some races are slightly more, some slightly less. The total prizemoney at todays meeting was less than it would have been back then.
Standard Saturday races have gone from $45000 to $60000 but back then $45000 was also the minimum where as now we have some lesser grade races run on Saturdays where the prizemoney is $40000 or less.
Going back a few steps, how are these increases being funded? Having a look at the 2016 report RWWA lost $8M and I assume it is something similar for 2017 based on Reindl's commentary.
Thankfully RWWA appear to be in a position at the moment where it can dip into the back pocket and fund these increases but is this sustainable long term? Probably not.
I think this is the driver behind what Reindl is trying to get across that the current funding model is ultimately unsustainable. He like many believes the WATAB should be detached from RWWA and a funding model created to ensure the long term sustainability of the industry. As he rightly points out the ownership structure of the WATAB would be irrelevant in this model.
RIO likes this post.
probably same everywhere to a degree, but it must be the conservative in me, that says if they can't sustain themselves then it should stiff cheddar.
government should not prop them up i don't believe. it's only thoroughbreds for me, but i don't think it confirms anything.
it actually decreased last season if my figures are right, and if they're not it's their info i have collated, not just taken a sum out of their report.