A question of revenue at the heart of RWWA review

Cover image courtesy of Racing WA

Out west, change is afoot with the Western Australian government ordering an independent review into Racing and Wagering Western Australia (RWWA). The government has appointed Hon David Templeman, the long-standing State Parliament Member for Mandurah, and Professor Warren Harding AM to conduct the review.

The objectives of the review are to explore ways to increase financial stability across the three codes by increasing revenue and reducing costs, review RWWA’s legislative framework, and to examine how changes in governance and financing will impact the industry as a whole. The review will look at the state’s share of Point Of Consumption Tax, revenue diversification, and how well the industry meets its obligations under the Racing and Wagering Western Australia Act 2003 (RWWA Act).

“Racing and Wagering Western Australia welcomes the government's independent review and the opportunity to work collaboratively to ensure a strong, sustainable future for the State's three racing codes,” said RWWA Chief Executive Officer Ian Edwards.

“This review will help ensure the financial and governance structures supporting thoroughbred, harness, and greyhound racing, while providing long-term sustainability for the industry.”

The breadth of the industry

The Discussion Paper released in January outlines why the review is so critical to the industry’s three racing codes; between them, they contribute $1.3-$1.4 billion to the state’s economy every year, supporting an estimated full-time 10,000 jobs, with approximately 25,000 participants and 49 active race clubs across the state.

The thoroughbred industry alone is estimated to contribute $866.4 million to the economy on an annual basis, supporting 6673 jobs between metropolitan and regional racing and breeding. Including tertiary jobs around the industry, racing is the fourth or fifth biggest employer in the state.

However, financial reports demonstrate that the industry is in need of assistance. Per RWWA’s annual reports, the industry experienced losses of $17.5 million at the end of the 2025 financial year, losses of $39.96 million in FY 2024, and losses of $22.8 million in FY 2023.

A partial contributor to this is stagnant revenue from the WA TAB, which has remained around the $355 million mark in recent years, and another being increased contributions to racing and sports which grew from $169.8 million to $206.6 million from FY 2022 to FY 2025. An additional one is increased operating costs for RWWA themselves who must comply with additional regulations to combat fraud.

In a December letter signed by several of the state’s leading trainers and addressed to Ian Edwards, Chief Executive Officer of RWWA, the industry outlined several concerns; a lack of investment in infrastructure, stagnation in prizemoney, and rising costs for feed, services, and workers’ compensation contributions are putting a strain on the industry.

Trainer Luke Fernie, who signed the letter, saw the emergent review as an opportunity to get on the front foot with the state’s problems. He voiced the common experience that trainers are feeling the pinch in all directions, and that a review would be the only way to move towards a way to fix that.

“It isn’t us against them, by any stretch,” Fernie said. “But the whole industry needs to know what's on the balance sheet. We need to work out where all the funding is coming from, where it's going, and the best places to spend it and if we're currently spending it correctly.”

The letter also alleged a lack of transparency into the state’s off the track program, and asserted that the current allocation of the POCT returns was disproportionate to thoroughbred racing’s contributions to wagering.

“The big problem is that harness racing receives way too much compared to what they earn,” said prominent Western Australian breeder Bob Peters, who added another Group 1 to his breeders’ resume over the Perth carnival when his homebred Cosmic Crusader (NZ) (Maurice {Jpn}) won the G1 Northerly Stakes.

“Nobody wants to address that imbalance. If you looked at every other state and compared the percentage of distribution to harness racing versus thoroughbreds, it is completely out of proportion.”

Like all jurisdictions in Australia, racing is largely self-sustaining thanks to wagering, and if that wagering cannot support the industry, then the industry has nowhere to go, particularly when it comes to investing in infrastructure.

“Belmont Park is falling to pieces,” Peters said. “The grandstand is falling down. The racing industry doesn’t have the money to repair it, and yet the government is spending millions on Gloucester Park for harness racing. Belmont needs lights on the track so we can race at night and attract the Asian betting market, but there's no way it's ever going to happen unless the government changes its attitude.”

A structural correction

It comes back to a problem of funding. Western Australia’s Point of Consumption Tax (POCT) sits on a similar standing to New South Wales at a rate of 15%, with 30% of proceeds from the tax being returned to the racing industry. However, the key difference is that the returns from the 30% pass through rate are split across the three codes. This is in stark contrast to Queensland, where POCT is set at 20% but 80% of proceeds are returned to Racing Queensland’s three codes.

Table: Point of consumption tax rates and pass through rates in Australia

“The key issue for racing in WA does revolve around the point of consumption tax,” said James Oldring, Chief Executive Officer of Perth Racing. “The reason that the industry is struggling at the moment is simply that the pass through rate of the POCT is markedly below where it needs to be.”

Oldring estimates that last year’s wagering revenue for the government was three and a half times what it would have been earning seven years ago - however, the additional income is not filtering its way back into the industry. Prizemoney has stagnated for the last four years; Saturday race prizemoney for the state sits between $60,000 and $80,000, and Oldring estimated that rising costs and the fall of the dollar’s value meant that these races were worth 10% less than four years ago.

“The prizemoney is lacking behind that of the eastern states,” said Peters. “We used to be on par with them, but we aren’t any more. And that is a matter of what money is available and how it is distributed.”

A higher pass through rate had once been on the horizon, but the legislation did not come into place.

“Largely, the POCT tax level was set up to coincide with a proposed sale of the WATAB, and there was a revised funding model that was close to being written into legislation prior to the sale in which racing was going to receive 65% of the point of consumption tax plus a guaranteed fund infrastructure,” said Oldring.

Tabcorp was slated to buy the WATAB in a $1 billion deal before pulling out in 2024, leaving the wagering operator in the hands of the state. A previous sale had been in negotiations with Betr in 2022, before being scrapped by the state government.

“On the basis of that model, racing would have been $57 million dollars better off than it actually was last year,” Oldring said. “So clearly there was an ambition and an intention for the government to allow racing to support itself in the way that it can with an increased flow through rate of POCT, but that hasn't happened.

“So what we're really asking for here is a structural correction. It's not a handout, it is purely and simply a case of the government taking less of the funding that racing generates in WA than is currently the case.”

“The government has always taken a big share of the POCT proceeds,” said Peters. “They make a lot of money out of thoroughbred racing, which they don’t so much in other sports, but they don’t put much back in. They just take.”

Raising the right rates

One thing that Oldring makes clear is that what the industry is advocating for is not for the POCT itself to be raised, only that the proceeds be more generously rerouted back to the industry.

“It is currently set at 15% and we absolutely would not advocate for that to change,” he said. “We've recognised that racing has a uniquely symbiotic relationship with wagering compared to other sports, and that it is important that the playing field allows both parties to flourish.

“We feel that any upward increase in the rate of POCT would be a mistake for government, and actually the modelling shows that it might not even benefit racing here, because the WATAB is a payer of POCT. The government would end up taxing its own entity at a higher rate as a result, and thus reducing its capability to pay back to the sport it's supposed to support.”

Oldring draws a comparison to Queensland, where raising the POCT to 20% in 2022 has only contributed to a continual decline in wagering turnover in the state. From the 2022/23 financial year to 2023/24, Queensland experienced a 2.9% drop in wagering turnover, the first decline in wagering since 2018/19.

“The product becomes more expensive, and thus it becomes less appealing for the bookmaker to promote,” said Oldring. “They'd much rather promote the other states that are charging at a lower rate of POCT, and therefore you see your turnover decline.”

Nevertheless, the high pass through rate of return to the racing industry keeps it afloat, and that is the correction that Oldring and other likeminded stakeholders in the WA industry want to see.

Not a new proposal

Despite the monetary struggles of the governing body, the Perth carnival posted improved metrics again in 2025/26 and Oldring was pleased to see a younger crowd returning to the races. He remains optimistic that the review will appreciate that raising the POCT pass through rate is the most logical first step to helping the industry thrive, particularly as the markets continue to correct in a post-COVID world.

“The government were looking into this pre-COVID,” he said. “And then COVID provided not just WA, but all of Australian racing, with an unexpected spike in turnover. Now the market is correcting. COVID was just a very large plaster over the top, but now it is peeling off.”

“I feel that if everybody were to be given all the facts and figures about how the entire industry run, it would be pretty black and white as to where the money is being lost,” said Fernie, who was also clear that he did not want the other racing codes to lose out. “There might be ways that we can do things more efficiently and economically than we do now, and we will only find that with a proper review.”

Participants and stakeholders are invited to respond to the questions outlined in the Discussion Paper via email - contact@racingreview.wa.gov.au - before midnight on Sunday, March 8. The review has committed to in-person consultations with stakeholders and interested parties as well as part of the process.

“I think without context, no matter how many words I put into a submission, it's difficult to really understand the full picture,” said Oldring. “I have used this analogy a few times when I have spoken to government; you have your hands too tight around the neck of the golden goose. You have to loosen them a little.”