NOVEL OAMARU PLAN

Evening Post, Issue 50, 27 August 1935, Page 6

NOVEL OAMARU PLAN

A STAKES RESERVE FUND

GUARANTEE FOR FUTURE

An interesting novel item, termed Stakes Reserve Account, appears in the balance-sheet accompanying this year's annual report of the Oamaru Jockey Club. The plan is to build up a reserve so that when (if it should) the next depression comes, or even a few. bad seasons, caused by particular circumstances, such as weather, etc., the club will still be able to maintain stakes at a mean level by drawing on the reserve. The idea is certainly one tnat should appeal to other clubs in a position to set aside a certain such sum an- successful seasons. The institution of this fund is exS aul cd i . by th& club's president (Mr. ■«•• Austin) m the annual report, as follows:— ■ . •

, Ap this year in regard to the finances of the club is the setting up of a stakes reserve account, and the setting aside of £150 as a special reserve fund for stakes for the following season. It is the intention of the committee to endeavour, ;to set aside a sum each year in Jfeis way so that gradually the club will bmld up a special fund that: will always guarantee sufficient cash in hand for stakes for subsequent meetings. By this means the club hopes to be in the position of being able to maintain stakes at a normal level 11 a repetition of the worst years of the depression' should be met with again in the future. The committee is of the opinionl that such a course as this will considerably strengthen the finance;: of the club for coming seasons. . .

■ It is understood that the idea of such a.reserve fund was obtained by the club's energetic secretary (Mr. D. V. G. Smith) in a discussion while attending the secretaries' conference at Wellington some time ago. The matter, was not actually discussed at the conference, but was a suggestion in a private discussion, on ways in which . clubs could maintain their stakes in tunes of difficulty. Mr. Smith was captivated with the idea and he has now succeeded in convincing his committee that it would be sound practice to apply; to the club's future finances. IAJWORTH-^VHILE PRECEDENT. There are many clubs in a position equally as good as Oamaru's, and such clubs might be well advised seriously to consider the precedent set by the southern club. If such a reserve had been built up by clubs during the years 1918-1929 there would have been several thousands of pounds in many cases'to have drawn oh during 1930----1935, and all the principal clubs at least could have maintained • their stakes, at a fair, mean, with much advantage to themselves, and to the sport an general. —■ ..The progress made by such clubs as the Te Aroha' during recent years illustrates how such clubs-can prosper even in depressed times if they can keep up stakes. Te Aroha succeeded by its very boldness, though had its practice been widely copied it might not have been so successful, for this club admittedly'reaped an advantage from the exceptional nature of its action. However, had other clubs had a special'reserve, such as Oamaru is now ■inaugurating, those clubs could have maintained their stakes even though showing temporary heavy losses; ,and the sport would undoubtedly as a whole have weathered the storm much more successfully than it did, and-without the depression's being felt near so severely as it has been. : : , MOST OPPORTUNE MOMENT. The present is a most opportune moment for clubs in general to open such a stakes reserve fund. The^ balancesheets oi the past season have been showing that most clubs- are through the worst days of their difficulties, and it may be anticipated that for the next lew years the.trend will continue towards increased, turnovers.. Although it is of course to be desired that such clubs;will give as much'as possible in immediate stakes, the small portion, say £100 to £500, set aside for such a reserve should not seriously reduce the individual offerings, especially as even their stakes would generally be in excess of what has been given for the past two years. •' \ , Under the Rules of Racing (rule 218 (1) ) it is provided: "No club shall give a less sum in stakes each year than a sum equal to 90 per cent, of the average yearly net amount derived by such clubs from the use of the totalisator during;the immediately preceding three years." This is the general rule, and although • there are provisos they are mainly incidental. The last three years have been the "worst that \ clubs have experienced since pre-war days, so that the average that must now be provided in stakes under rule 218 is as / low, it is hoped,. as it may ever be. It is therefore while clubs are reaping the advantage of increasing turnovers and yet at the •same time, have only an exceptionally low mean, to reach in their annual offering that the chance is present of opening a stakes, reserve fund.: Later on, when turnovers attain comparative stability again, the opportunity may not be so freely used; though it should ordinarily be possible to add at. least a small sum each year to the account. The effect of instituting such a fund should not be any severe hardship on those owners who have remained loyal to the Dominion clubs during the past few years. For instance, in the case of Oamaru the £150 to be set aside this year is spread over four days' racing, which means an average of £37 10s a day. There are seven or eight events a day, so that the average lessening of the individual stakes" is only £5 (approximately). As it happens, this club showed a net profit of £541 for the season, and therefore the establishment of the reserve may mean no diminution at all in this year's stal.aofferings. ■ - Clubs such as the big metropolitan ones should be able to place much larger sums than Oamaru has done into a reserve each year and yet maintain an even increase of stakes. Should any future season prove to be unprofitable, then of course the fund could be drawn on, the following season, but at present it does not seem as if this necessity will arise in the next few seasons. Last season the Wellington Racing Club, for example, paid out £23,770 in stakes and collected £44,589 as its share of totalisator turnover. The revenue excess from this source naturally means that future stakes will have to be better, under rule 218, but, as. the average for the past three years sets the standard, it should still be possible for a club that has enjoyed such measure of success for its past season to set aside a substantial portion for opening a reserve stakes fund against the possibility of bad seasons coming again in future years.