A place of uncertainty: the case to update Racing NSW's outdated funding model

Cover image courtesy of The Image Is Everything

A critical oversight in the government’s review of the Thoroughbred Racing Act of 1996 is what originally inspired the formation of the Racing Reform Group, who were concerned that the Racing New South Wales funding model was not going to be addressed in the review. A two-week extension to the review's open consultation deadline gives a fresh opportunity for likeminded individuals to emphasise what's missing.

A welcome extension

The original deadline for the review’s open consultation period was slated for Monday, November 24, but increased demand has led to a two-week extension, pushing the closing date back to December 8. Attunga Stud’s Brian Nutt, secretary for the Racing Reform Group, welcomed the extension.

“We welcome that because it gives people more time to consider what's a crucial issue,” he said.

The plan for what happens next is ensuring that the group can be consulted directly by the review’s leader, the Hon. Brad Hazzard. Other industry groups and a number of prominent figures have already met with Hazzard, and it is Nutt's plan for the Racing Reform Group to offer Hazzard a new angle.

“It’s in the pipeline,” Nutt said. “He's (Hazzard) been doing a marvellous job going around the state talking to participants, and we will look forward to the opportunity when it arises.”

A united front

In the Terms Of Reference published alongside the announcement of the review, it is clarified that “the scope of the review does not include provisions of the Act that relate to thoroughbred racing industry funding arrangements.”

“That's really what alarmed us, because that was a recommendation that came out of the parliamentary inquiry into the process behind the sale of Rosehill,” said Nutt.

“We were really in support of the recommendations from the inquiry. To our surprise, it wasn't included in the terms of reference, and that's really what brought us together, to reaffirm what the parliamentary inquiries' recommendations were.”

The group - consisting of Nutt, former Australian Turf Club Director Julia Ritchie, Yarraman Park Stud’s Arthur Mitchell, Champion Thoroughbreds Director Jason Abrahams, bloodstock agent Will Johnson, lawyer and owner David Walter, and former racing administrator Helen Sinclair - has good reason to be concerned. Without funding, there is no industry - and that goes beyond prizemoney. The whole ecosystem will be disrupted if funding grinds to a halt.

“That's the main impetus of the group getting together,” Nutt said. “We're all passionate about our industry and we think this is a fantastic opportunity to get the act fit for purpose, because it's almost three decades since its inception with no changes, apart from a few minor adjustments to it.

“It is no longer, in our opinion, fit for purpose and we'd like to see the review include those recommendations that came out of that inquiry.”

Holding a wide range of positions across the industry is one of the group’s core strengths, and Nutt was keen to highlight that.

“I think we as a group represent a wide variety of participants of the industry,” he said. “We've got breeders, owners, syndicators, a lawyer, a bloodstock agent, a former administrator. It's not just one small part of our industry. It covers a wide group of our industry with similar passion.”

While certain sectors of the industry have dedicated representation, such as the NSW Trainers Association, there is a void to be filled by a group that could unify all of them. Perhaps that’s the space that Racing Reform Group can step into.

An outdated model

“The funding model is outdated because it was established back in the day when the TAB controlled most of the turnover,” said Nutt. “And that's how race clubs were funded. For example, they knew that whatever their turnover was on a particular day, that they were going to get a slice of that.”

When the Thoroughbred Racing Act of 1996 went into effect, TAB controlled 84% of the wagering market at a value of $7.23 billion per racing season. That share of the pie has shrunk in the years since; while wagering on racing has continued to grow in terms of revenue, the TAB’s taking has declined, generating 50% of wagering in 2017/18.

That number took a drastic hit during the pandemic, dropping as low as 32% of the wagering market, and TAB hasn’t been able to recover since. When the Racing Australia Fact Book last published wagering figures split by market share in 2022/23, TAB’s share had dropped to 36%.

“When the race fields legislation was introduced and corporate bookmakers were making their contribution towards the industry, then that reduced the turnover of the TAB, but it didn't increase the contributions back to the clubs,” Nutt explained. “That money from the corporate bookmakers went straight to the regulator and was handed out pretty much on a discretionary basis.”

One of a Peter V’Landys-led Racing NSW’s early victories was in 2008 with the Racing Fields Legislation, which imposed a 1.5% turnover fee for using and publishing New South Wales fields data. The High Court upholding the scheme in 2012 ensured it was an offence to publish the data without Racing NSW’s permission, and it has since generated over $1.35 billion in revenue for the principal racing authority.

It has been a particular boon for the industry, as non-TAB bookmakers’ racing wagering has spiralled from $3.9 billion in 2007/08 to $16.84 billion in 2022/23 - but less so for race clubs across the state, who do not receive a direct cut of revenue as they would do with income from TAB betting. The shift of the betting market balance in favour of bookmakers has left many clubs’ income in a place of uncertainty.

“It's very hard to budget when you're a race club when you've got to rely on that sort of funding,” said Nutt, formerly the vice-president of Scone Race Club. “You're not sure where you are from month to month, or from quarter to financial quarter.”

While a reported $500 million in surplus sits in the regulator’s coffers, it’s common knowledge that many training facilities across the state have fallen far behind the standards set by other states. Financial insolvency has driven several clubs into administration or to be sold in their entirety to Racing NSW in recent years, and a lack of clear, consistent access to revenue that is generated in part by these clubs is a heavy contributing factor.

The same threat was recently levied at the Australian Turf Club as well, through a Show Cause notice. The ATC recently released their 2025 Annual Report, detailing record revenue of $374 million for the 2024/25 season. While costs minorly exceeded income, $2 million of the $2.59 million deficit has been largely attributed to expenses associated with the failed Rosehill sale bid.

The Age reported on Friday that the ATC is set to meet with Racing NSW on the coming Thursday to present its case, with a final decision from the regulator expected before Christmas.

While the ATC is both asset-rich, according to its 2025 Annual Report, and receives plenty of income from other avenues, many smaller clubs across the country have significantly narrower income pathways. It's not clear why the Act review has decided to sidestep a crucial element of the Act itself.

“It all goes back to the fact that it (distribution of funds) is discretionary, and there doesn’t seem to be a set policy or formula on how that’s done,” said Nutt. “That’s the problem.”

Building momentum

A contributor to Nutt’s hopes of an audience is the parliamentary petition set up by the group that directly calls for an expansion of the review by the Minister for Racing, the Hon. David Harris. The petition cites the importance of the thoroughbred industry in New South Wales’ social, cultural, and economic landscape, where it is responsible for the creation of 28,000 full time jobs.

Nutt is hoping that the petition can continue to gather momentum in the industry while the review’s consultation period has been extended.

“It is starting to gain more momentum as people find out about it,” he said. “We've just got to keep that momentum going now to try and put pressure on the government to expand the scope of the review.

“That's what this group is trying to do, make people aware of what we think the issues are and the importance of getting it right. Because this is going to be a review that may be in place for a long time in the future, so we've got one opportunity to get it right.”