Cover image courtesy of The Image Is Everything

On May 27, members will be asked to support a proposal described as a once-in-a-generation opportunity - an estimated $5 billion deal that promises to “secure the future of racing in New South Wales”.

The key justification?

A projected collapse in wagering that will render racing unsustainable without immediate reinvestment.

But that assumption warrants scrutiny.

Where are the numbers?

The wagering decline justification has been consistently reinforced by ATC Chairman Peter McGauran, including in a March 29 interview with the ABC, where he stated:

“Attendances and wagering declines are faster and deeper than expected… There is no prospect of racing being as flush as it is today within three to five years… the wagering turnover is irreversible.”

These are serious claims, and certainly sound dire enough for a drastic response. Yet at a time when transparency around specific information to back the claim should be at its peak, something unusual has occurred.

For decades, wagering data has been publicly available through Racing Australia’s Fact Book; a long-standing industry document that has included national wagering statistics as far back as the 1989/90 season.

Until now.

In the most recent edition covering the 2023/24 season, wagering data is missing for the first time in over three decades.

When The Thoroughbred Report reached out to Racing Australia to ask why, we were told via email that the data was excluded because it “no longer aligns with Racing Australia’s core purpose.”

It’s a perplexing stance - especially when Racing NSW and the ATC have made wagering performance the cornerstone of their case to sell one of the state’s most important racing venues. It raises further questions about how wagering data could be viewed as no longer central to the remit of the national racing administrator, especially when it underpins so many industry decisions.

If wagering is the decision linchpin, why remove the very data that could confirm or challenge the narrative?

Furthermore, Racing Australia stated that the data is closely guarded by wagering operators, and Racing Australia is not aware of a “central body” that collects national wagering data. Racing Australia itself relies on the third party wagering operators reporting accurate data back in.

This raises a serious and unavoidable question: if wagering figures are central to the argument, why are they no longer public?

And how is it that third-party wagering data is now considered unreliable? This is one of the supposed explanations given for why wagering figures are no longer reported by Racing Australia - yet all wagering operators must pay fees and taxes to use the racing product, suggesting that accurate tracking should be entirely possible.

A fall or a reset?

When we take a look at the data that actually is available, it tells a different story than the one being used to anchor the sale of Rosehill.

Total wagering on thoroughbred racing climbed from $15 billion in 2013/14 to a high of $29 billion in 2021/22. In 2022/23, it dipped slightly to $27 billion - still on par with 2020/21 levels and almost double the turnover from a decade ago.

It’s important context; racing was the only sport still operating during the pandemic. With the world locked down and every other code on pause, wagering surged. The boom years of 2021 and 2022 were exceptional - not sustainable. A small decline afterwards isn’t evidence of collapse. It’s a market normalising.

And when billions of dollars and the future of a racecourse are on the table, is normalising a good enough reason to sell?

Table: Total thoroughbred racing wagering (in $billions) nationwide as reported in the Racing Australia Fact Book

There has been a change in the way people bet; on course betting with bookies has dropped to 16 per cent of its income a decade again, while the prevalence and revenue of online betting has tripled in the same period.

And what about broader economic conditions? Cost-of-living pressures, rising interest rates, and inflation have caused a curb in discretionary spending evident across key sectors – travel, hospitality, and retail – with government data, central bank commentary, and financial media all reporting downward trends.

If wagering has dipped slightly in that same window, is that really a red flag - or just a reflection of the times?

Missing pieces of the puzzle

A review of Racing NSW’s own annual reports shows an industry still performing well above pre-pandemic levels, despite a recent year-on-year decline. Between the 2023 and 2024 financial years, wagering revenue fell by just over $19 million - a 5.7 per cent drop.

However, total wagering income remains more than $100 million higher than it was in 2019, and essentially returns to the levels reported in 2022, when Racing NSW's overall revenue was nearly $40 million lower than in 2023.

Table: Revenue streams ($) from Racing NSW’s Annual Report, where ‘other revenue’ incorporates publication sales, worker’s compensation, property revenue, equine welfare contributions etc.

Wagering has always been the cornerstone of racing’s funding model. While Racing NSW receives a smaller share of gross wagering revenue from the TAB compared to other states, that structural imbalance isn’t new. What is new is the suggestion that a $20 million decline justifies selling a $5 billion asset.

According to available data, 2023 was the first year wagering fell in New South Wales after consistent year-on-year growth. A correction was inevitable. The surge during the pandemic created an artificial high. So the idea that the bubble would eventually settle is not surprising.

What is surprising is how quickly this market adjustment has been framed as a crisis.

No doubt the ongoing federal review of wagering advertising is influencing more pessimistic forecasts - any reform is likely to affect future turnover, though to what extent remains unknown. It’s a factor to watch, but not one that should be used to justify panic selling before the implications of unknown changes are clear.

Racing NSW’s 2022/23 wagering revenue actually held up better than national patterns, only returning to 2021/22 levels.

So again, we’re left with the central question: Is this really a sharp enough decline to justify selling Rosehill Gardens?

Or are there other ways to address a future funding shortfall?

Eyes on the prizemoney

At the beginning of the 2024 season, Racing Victoria announced a series of prizemoney cuts to major races in order to remain within budget, following a 10 per cent drop in wagering that contributed to an $11.8 million deficit. The G1 All-Star Mile was trimmed by $1.5 million, with funds redirected to support maiden races, while the G1 Australian Cup was reduced by $500,000.

The decision was made in the interest of long-term sustainability and to ensure that all levels of the sport remained viable.

Is this a strategy that Racing NSW should consider?

Between the 2022/23 and 2023/24 racing seasons, more than $20 million in additional prizemoney was injected into 132 stakes and feature races in NSW. That included million-dollar-plus increases to races such as the G1 King Charles III Stakes (up from $1 million to $5 million), the G3 Sydney Stakes (from $500,000 to $2 million), and the G3 Concorde Stakes (from $200,000 to $1 million).

For its elevation to Group 1 status in 2024/25, The Everest received another $5 million prizemoney boost - despite already being the richest turf race in the world. That increase accounted for the vast majority of the $6 million in additional prizemoney distributed across the state this season. Attendance for the Everest raceday jumped by 2,500 people compared to 2023 - a modern-day record for Randwick - but the prizemoney rise raises the question: what exactly did the extra $5 million achieve?

Table: Major races in New South Wales whose prizemoney increased by $500,000 or more from 2022/23 to 2023/24

It’s important to note that while the Australian Turf Club doesn’t directly fund the bulk of prizemoney - it’s Racing NSW that administers and distributes it - the ATC does contribute significantly through its commercial operations, and is a vital cog in the funding machine. The broader question, then, is not just about whether races are too rich - but whether Racing NSW should reconsider how it allocates prizemoney, especially when infrastructure needs are mounting and wagering revenue is falling.

On a recent trip to Mexico, renowned bookmaker Rob Waterhouse offered a different perspective after visiting Agua Caliente, the site of Phar Lap’s final start.

“I took my wife to Agua Caliente, which is now a dog course,” he said. “You can still see the grandstand (from Phar Lap’s time). In the race book, there weren’t any prizemoney figures, but I can’t understand Spanish, so we found someone who explained it. The prizemoney was based on the amount of turnover held on the race.”

It’s a model that prompts serious thought - particularly when viewed through the lens of betting engagement.

“I assert, notwithstanding continual hype and the perception, betting would be more on the Caulfield Cup than The Everest. The Caulfield Cup gets almost no marketing and yet it turns over more than The Everest. This spring, the NSW tote held $2.1 million on The Everest and $2.4 million on the Caulfield Cup.”

By this model, a race must earn its prizemoney. Marketing and headline figures help, but they don’t replace substance - and they certainly don’t pay for capital works.

The Everest didn’t need another $5 million to attract the nation’s best sprinters. Even before the latest increase, it was still $5 million ahead of its nearest turf competitor, the $10 million Golden Eagle. The next closest globally is the G1 Dubai Sheema Classic, worth US$6 million (about A$9.3 million).

There is no shame in admitting that cuts may be required to secure the future. Racing NSW may need to ask itself: is it time to shift focus - reorienting prizemoney towards infrastructure and foundational investment, rather than continuing to escalate prizemoney levels at the top?

Because if prizemoney is funded off the back of ATC venues, and infrastructure is allowed to decline - or sold off entirely - what then?

The importance of the Act review

One of the key issues sitting beneath the debate over the proposed sale of Rosehill Gardens is the funding model that underpins the ATC. Unlike Racing NSW, which receives income from modern wagering sources such as race fields fees from corporate bookmakers and Point of Consumption Tax, the ATC does not receive a direct share of these revenue streams. Instead, the Club remains primarily funded through distributions tied to TAB turnover.

This model reflects a legacy system that may no longer serve the industry’s best interests. While online betting through corporate bookmakers has grown significantly, the ATC’s income is linked to a declining share of the market. As wagering habits shift, the Club responsible for producing the bulk of New South Wales’ high-turnover meetings finds itself at an enormous financial disadvantage.

McGauran acknowledged the challenge in his NSW Parliament inquiry submission: approximately 38 per cent of the ATC’s income comes from its own operations, while over 60 per cent comes from wagering-related distributions, primarily through Tabcorp. As TAB revenue has declined in recent years, the ATC has required discretionary funding top-ups from Racing NSW.

Leading Sydney trainer John O'Shea spoke strongly about this at the Inquiry, stating:

“I find it almost absurd that we feel the need to sell our most valuable asset: Rosehill. Clearly, if McGauran’s comments are taken at face value, the funding mechanism to the industry’s premier club is not working. The distribution mechanism is not helping to support the industry’s growth.

“As well as having strong prizemoney, it is essential that we have good facilities to race and train on; it is vital to horse welfare. Moreover, owners who fund the industry and put on the show deserve their horses to be trained in the best facilities available. While many projects have been announced, few have been completed.

“It frustrates me to say NSW has fallen behind Victoria in its investment and infrastructure and facilities,” O'Shea said.

O'Shea raises the broader philosophical debate at play: Racing NSW’s centralised approach to revenue distribution has enabled significant investment in prizemoney and new races, but some stakeholders have queried whether clubs are receiving a fair and sustainable share of the income that their events help to generate.

These concerns are expected to be raised in the forthcoming review of the NSW Racing Act. Many in the industry see this as an opportunity to assess whether the current arrangements are best placed to support the long-term health of the sport in New South Wales.

The discussion is not simply about revenue allocation - it’s about ensuring the structures in place reflect the modern wagering environment and fairly support the organisations delivering the racing product on which that revenue depends with the proper infrastructure required.

Raising revenue through incentive

Online betting may dominate the revenue stream, but interest in the sport still hinges on compelling horses, competitive races, and the venues that host them. The Everest has shown what’s possible when strong incentives attract world-class talent—and when the right infrastructure is in place to support it.

New Zealand Thoroughbred Racing’s recent agreement with 1/ST Racing, granting ballot-free international race access, highlights a broader shift toward global engagement. The upcoming appearance of Hong Kong’s Ka Ying Rising (NZ) (Shamexpress {NZ}) in The Everest is already generating buzz months ahead of the event.

This is the landscape the industry is moving into - one that depends on local venues competing on a global stage. In that context, decisions about the future of major racecourses carry strategic weight.

What impact would removing a venue like Rosehill have on our ability to attract international competition? What happens to the surrounding community’s connection to the sport if its local anchor disappears? And are we certain that selling such an asset is the only - or best - way to address the issue?

As the vote moves closer, these are the questions that need to be asked. Because once a venue is gone, it’s gone for good.

Do you agree or disagree with the sale of Rosehill? Email editorial@ttrausnz.com.au