Racing: AJC slashes feature stakes

The Australian Jockey Club (AJC) has announced a prizemoney reduction of nearly A$4 million for its feature races next year in an effort to recoup an expected shortfall in excess of A$5 million from last financial year.

Some of the changes for 2010 are the Doncaster, which goes from A$2 million to A$1.5 million, and the AJC Australian Derby which will be down from A$1.6 million to A$1.3 million.

The Epsom Handicap drops from A$600,000 to A$350,000, as does the Metropolitan.

The AJC also announced a further seven redundancies on Thursday, bringing the number of staff laid off in the past 12 months to 19, representing a 19 per cent reduction in the total permanent employee base.

The AJC believes the moves have been forced by corporate bookmakers and Betfair who they say are undermining the core wagering revenue stream.

Racing NSW is holding $30 million it has collected as race field fees which would normally be distributed to the clubs for prizemoney.

However, betting exchange Betfair and corporate bookmaker Sportsbet have launched legal proceedings against the validity of the legislation which requires them to pay a percentage of turnover for the use of fields.

Racing NSW believes it will win the case, but is keeping the money in case it loses and has to pay it back.

AJC chairman Ron Finemore believes a win for Racing NSW would help turn things around for the Randwick-based club.

"I had hoped that given time and a positive race fields outcome we could bring about noticeable change to both racing and the business of the AJC," Finemore said.

"The AJC was faced with a lose-lose situation. Our choice was, however, increasing track fees or reducing base prizemoney which affects all AJC stakeholders, whereas reducing elite prizemoney affects a much narrower group of stakeholders.

"The AJC continues to operate its business in the best interests of its members and stakeholders and these actions are separate and coincidental to any discussion about a merger with the Sydney Turf Club."

NSW Trainers' Association board member Anthony Cummings said the AJC had no option but to reduce prizemoney.

"It is disappointing that these prizemoney reductions have had to be made by the AJC, but with its revenue stream being undermined by current circumstances I can see how they have been left with little choice," he said.

"We acknowledge that the new AJC Board has taken significant steps to reduce other costs in order to limit these prizemoney reductions as much as possible.

"We think it essential for the financial future of the NSW racing industry that Racing NSW succeeds in defending the court proceedings initiated by corporate bookmakers and Betfair who are challenging the NSW Race Fields legislation and/or the fees payable by them to help fund NSW racing."

Matters may not be much better further south, with an official saying Victorian racing could easily slip into the same downward spiral.

Thoroughbred Racehorse Owners' Association chairman David Moodie who said Sydney racing was on the verge of implosion, said Victoria's balance sheet looked better - but only temporarily.

Victorian racing earns $50 million a year from gaming as part of its joint venture with Tabcorp; money that will evaporate after 2012 when the wagering licence is re-negotiated.

Gaming brought $64 million for Victorian racing last year.

But Moodie said much of the money earned from the Tabcorp deal had been wasted on administration costs.

Racing Victoria chief executive Rob Hines sent a letter to 20,000 industry members this week assuring them Victorian racing's Tabcorp deal meant stake-money would continue to rise in the next two seasons.

However, Moodie said Hines had overlooked the impending 2012 cash crisis. He said corporate bookmakers, unless made to pay "reasonable fees" combined with wastage would bring Victorian racing to its knees.

"There is no point having an us-against-them attitude to what's going on up there because we are not immune and their prizemoney is our prizemoney," he said.

"It is essential to have a national approach to such a crisis."

- AAP