Clubs want more funds to maintain stake levels

Press, 12 July 1980, Page 21

Clubs want more funds to maintain stake levels

-Unless racing clubs were provided with income additional to totalisator commissions and T.A.B. betting profif they would be hard pressed to maintain present race stakes, the president of tlje Racing Conference, Mr Af M.. Hughes told- delegates at the annual meeting of the conference in Wellington yesterday. •The downturn in the growth of totalisator investments- this season gave rise for deep concern, he sdid. Additional totalisator turnover had to approach the general inflation rate of 18.4 per- cent if clubs were to be able to meet costs and maintain a level of stakes comparable with the previous year. By the end of last season on July 31, 1979, totalisator investments on racing meetings had increased on-course by 12.6 per cent while the increase in T.A.B. betting on racing and trotting meetings had increased by 16.35 per cent. This season, as at June! 28, the on-course increase had been 4.09 per cent and' the off-course increase 9.27; per cent. “The most disturbing fea-1 ture is that during each of l

lithe five weeks prior to June .! 28 the rate of increase for J both on and. off-course bet- * I ting has been steadily drop- "! ping: at May 24 the respecI tive increases were 4.93 per I I cent and 9.7 per cent,” said /Mr Hughes. “The dramatic 1 1 change in the level of inri crease during this latter pan s ! of the season is strikingly illustrated when one realises at October 6 last the on-course increase was 6.8 i per cent and the off-course ■ 16.89 per cent.” Mr Hughes said that the 5 rate of increase this season r would be the lowest since J 1970 and came at a time I when the inflation rate was i at an all-time high. In 1970 ■ the rate of inflation had - been 5.3 per cent. ; The executive committee had long realised that the i value of stake money for * many years had declined in ■ comparision with inflation » and that stakes were no * longer realistic. ■ The average i stake for the 3062 races held ; this season had been $3155 ■ compared with $2952 last ilyear, an increase of only :.6.87 per cent. II “I firmly believe that ■; every club had endeavoured j to provide stakes to the •I limit of their resources and ‘‘in many cases this has beeni

i achieved by deferring essential maintenance at the racecourse,” said Mr Hughes. “It was alarming to realise that when we prepared our submissions to the Government for financial relief in April, 1976, the cost of deferred maintenance on our courses amounted to $2.17 million.” Mr Hughes said that stake money was the livelihood of racing: owners had to have a reasonable chance of recovering their costs and it was from this source that trainers, jockeys, and others employed in racing derived a big part of their income. “Last season a total of 6118 individual horses raced. Assuming a conservative cost for the training and racing each horse at $4OOO per annum the total expenses of horses raced would be $24.47 million. Against this cost owners were competing for total stakes of $9.58 million.” Mr Hughes said that in recent years the Racing Conference and Trotting Conference had made regular requests to the Government to readjust totalisator duty! between the clubs and thej Government. ; The conferences had| sought the extension, of the; annual totalisator rebate of j

$2500 to a rebate of $2500 for each day of racing and trotting and the retention by the T.A.B. of 0.5 per cent of the Government’s totalisator duty on off-course turnover to ’be paid to racing and trotting clubs in the profit distribution.

The latter proposal would standardise the rate of duty, which now was 8.5 per cent on on-course and 9 per cent on off-course investments. The cost to the Government of these proposals on last year’s figures would be $802,500 for the additional rebate and $1,680,276 for retained duty.

“Last year the Government totalisator duty was $40.84 million, which was an additional $5.5 million from the previous year and an increase of 15.6’ per cent,” said Mr Hughes. “Despite the downturn in the net income to clubs and the T.A.B. the Government duty this year will increase by not less than $3.26 million.” Mr Hughes said that when the present duty rebate had been increased from $lOOO ,to $2500 in 1965 the total ‘rebate had represented 2.89 per cent of the Government take. Last year the total rebate had represented 0.82 per cent.