WA racing body asks for government help

The state's racing industry authority has asked the government for support for its $56 million wagering tax bill as funds allocated to the industry fall by over $4 million for the 2010 financial year.

Racing and Wagering Western Australia (RWWA) said it had allocated $103.1 million for fiscal 2010, $4.2 million less than the previous year.

A further $2.1m will be provided in industry infrastructure and development grants.

Funds will be allocated to the three codes of racing; thoroughbred, harness and greyhounds.

RWWA chief executive Richard Burt said the fall in funding allocation was a result of the unprecendented economic conditions facing the industry.

In addition to the funding cut, RWWA will also move to reduce its operating costs with Mr Burt adding that RWWA has put a submission to the state government for support with the $56 million in wagering taxes paid each year.

RWWA will undertake a comprehensive review of the WA racing and wagering industry funding model with changes to be implemented in the 2011 financial year.

The announcement is below:

Racing and Wagering Western Australia (RWWA) today announced funding to the racing industry for the 2009/10 financial year.

$103.1m will be injected into the three codes of racing via club and participant distributions. This figure reflects a net reduction of $4.19m on the 2008/09 funding levels. A further $2.1m will be provided in industry infrastructure and development grants.

RWWA Chief Executive Officer Richard Burt said, "Whilst it is disappointing the 2009/10 funding levels to the racing industry will be reduced by approximately 4%, it is a necessary change to reflect the unprecedented economic conditions facing the industry.

"The financial pressures confronting RWWA have been well documented in recent months including the additional costs to remain in the SuperTAB pool and the introduction of interstate product fees effective from September 2008. Together these costs total $16m each year going forward" Mr Burt said.

Mr Burt said "in addition to the $4.19m net reduction in industry funding for 2009/10, RWWA will be making significant reductions to its own operating expenditure to assist in bearing the cost of the new pooling and product fee arrangements. We have also put a submission to Government asking for support with the $56m in wagering taxes paid to the state government each year."

RWWA was established in August 2003 and is the controlling authority for racing in Western Australia.

RWWA has increased annual distributions from $59m in 2003/04 to $108.5m in 2008/09, an increase of 84%.

This growth in funding has assisted the three codes of racing in Western Australia to be competitive with industry distribution payments nationally.

A number of components in the 2008/09 distribution model have been considered in light of the need to reduce industry payments.

One such component is the Owners Incentive Payment (OIP), currently paid to non-stakes earners in both the Harness and Thoroughbred Codes.

The OIP was introduced in 2005 with the intention to retain existing owners and attract new owners.

An assessment of owner and horse registrations, along with a review of field sizes has indicated that OIP may not be the best method of achieving the desired outcome of this ownership strategy.

The suspension of OIP for the 2009/10 season will provide a large component of the required industry savings without severely impacting WA's reputable stakes levels.

It is RWWA's priority to maintain stakes at maximum levels, rewarding performance and maintaining a nationally competitive level of returns to owners.

RWWA base stakes funding will remain at 2008/09 levels for both the Thoroughbred and Harness codes.

Greyhounds have taken a 4th place stakes reduction (originally introduced as an OIP-equivalent funding increase), along with minimal City Class stakes reductions.

RWWA has maintained an appropriate level of opportunities to race for all three codes and has further optimised the racing calendar in the process.

There has been a collective reduction of 3% in race meetings for the season:

Thoroughbred Meetings = 296 (09/10) = 4% reduction on 08/09 (309 meetings)

Harness Meetings = 293 (09/10) = 2% reduction on 08/09 (300 meetings)

Greyhound Meetings = 285 (09/10) = 3% reduction on 08/09 (294 meetings)

Rather than introducing a reduction to current incentive fee payments for Clubs, Product Fees will be capped at 2008/09 totals, which will assist Clubs in developing their 2009/10 budgets.

This capping will be pro-rata based on the number of meetings conducted by each Club.

In reducing industry funding, RWWA has endeavoured to maintain sufficient opportunities to race for all three codes, as well as providing maximum reward for performance via competitive stakes levels.

Mr Burt further stated "RWWA will be undertaking a comprehensive review of the WA industry funding model with a view to implementing change in the 2010/11 racing season.

"This process will involve considerable analysis to develop a new funding model and will include such attributes as revenue derived from race meets, costs to operate meets, allocation of direct and indirect expenses, costs of training and trailing and other such factors.

"RWWA will work closely with each of the three codes of racing in the preparation of the new funding model which will apply from 2010/11."