NSW provincial club review puts excluded funding question back in focus

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Racing NSW’s review of provincial club funding has brought one of the state’s biggest unresolved racing questions back into focus: how revenue generated through NSW racing is collected, distributed and accounted for across the industry.

The review involves Newcastle Jockey Club, Wyong Race Club, Gosford Race Club, Illawarra Turf Club at Kembla Grange and Hawkesbury Race Club, which remains under a Racing NSW-appointed administrator.

It comes as Racing Minister David Harris has rejected an e-petition seeking to broaden the Hazzard Review of the Thoroughbred Racing Act to include industry funding arrangements and the relationship between Racing NSW and the NSW Government.

In his formal response, Harris said the current review was focused on the Act’s legislative provisions and governance and accountability-related matters, rather than the structural model establishing Racing NSW as an independent statutory body or funding arrangements involving other legislation, regulations and commercial agreements.

“Such reviews would be fundamentally different in nature,” Harris said.

The Racing Reform Group NSW had argued the industry’s funding model and the relationship between Racing NSW and the State Government were two critical areas excluded from the Hazzard Review.

RRG secretary Brian Nutt said when the group was launched, “the Hazzard review is especially important in shaping what racing will look like in the years ahead, but at the moment it can’t look at two of the most critical areas.”

That issue is now being tested, at least in part, through Racing NSW’s provincial funding review.

Racing NSW did not respond to TTR’s questions before publication, including what prompted the review, who is being consulted, whether its findings will be made public, and what factors the funding formula should prioritise.

A model built on old assumptions and discretionary payments

Wyong Race Club chief executive and Provincial Racing Association of NSW chairman Greg Purcell said Racing NSW had met with the five clubs and would continue individual discussions before taking the matter to its board.

“Racing NSW advised the five provisional clubs that they would undertake the provincial funding model as a whole. They are looking at all parts of the funding in consultation with the five clubs,” Purcell said.

“Whilst each club will have a different position, we’ve put forward a joint proposal for Racing NSW to consider, and we’ve all met individually as well on matters of concern. We don’t see in the current environment that there’ll be wholesale changes. But the current distributions are based on legacy items and the last time it was looked at was in 2009/10.”

The provincial pool is currently split 25% to Newcastle, 21.5% to Kembla Grange, 19.1% to Hawkesbury, 17.6% to Wyong and 16.8% to Gosford.

Purcell said those arrangements were established in a very different wagering environment.

“We’ve gone from the TAB’s position as a regulatory monopolist without any competitors in NSW, through their privatisation in 1997 into working in a competitive environment but with a lot of the legacy of the old monopoly,” he said.

“The problem is that the TAB market share has diminished, while it’s still a considerable amount of money, but these agreements still perpetuate. TAB revenues are now only a smaller proportion of the available funding."

Wyong Race Club’s Annual Report for 2024/25 includes the following statement: “The combination of stagnating income sources from the Scheme of Distribution, combined with increasing costs in all areas of the business, has led to increasing levels of losses for the Club in recent years. The situation would be even worse if not for regular end of year top ups from Racing NSW.”

The major issue is why clubs that generate the racing product, and thereby the wagering, race fields and broadcast revenue Racing NSW receives, must rely on discretionary “top up” payments for a share of that revenue.

Wyong’s warning

Wyong is central to the debate. It is one of the clubs under review, its chief executive chairs the Provincial Racing Association, and it sits in the Racing Minister’s electorate.

Wyong’s annual report said the current arrangements were not sustainable in the long term and did not provide adequate funding for clubs to meet basic asset-maintenance responsibilities, let alone capital improvements.

“Since 2010 the Scheme of Distribution payment to provincial clubs has risen by only 4-5% over 15 years. While income has remained relatively static over this period, costs have continued to rise, in many cases by more than CPI levels, with an average annual inflation rate of around 2.6% over the 15 years,” the report stated.

The club says its core distribution has not kept pace with its operating costs, leaving it reliant on Racing NSW to return additional industry funding through annual decisions.

“It is unfortunate that the current review of the Thoroughbred Racing Act initiated by the Minister for Racing does not include a review of industry funding arrangements. Hopefully this issue will be addressed at a subsequent time,” the report said.

That position reaches beyond the five provincial clubs. A broader funding review would need to examine not merely how a provincial pool is divided, but how income from the sport is allocated between metropolitan, provincial and country racing, prizemoney, infrastructure, welfare, administration and club operations.

Training centres and infrastructure

For the provincial clubs, the review is not simply a contest over who receives a greater percentage of a fixed pool but whether the formula properly reflects the obligations each club carries.

Gosford CEO Daniel Lacey said the model was due for examination.

“It’s just an older model, and it’s good that Racing NSW are conducting a review to modernise it if required. It’s welcome by all the clubs,” Lacey said.

“Over the years the funding model has had some changes to it and racing now is different to when it was implemented.”

Training infrastructure is one obvious source of cost. Provincial clubs maintain tracks and facilities used by trainers and horses year-round, yet the revenue available to them is heavily shaped by raceday and wagering arrangements.

“Training centres come at a cost to the club, training is subsidised by the clubs quite heavily. It’s in our annual report. It’s very hard to charge what you need to get your money back. Our poly track cost $3.4 million to put in and every four years it needs $300,000 to wax it. It’s a heavy capital investment to maintain infrastructure,” Lacey said.

Asked whether the wider funding structure should be considered across metropolitan, provincial and country racing, Lacey said, “as long as it’s something that benefits the whole industry.”

Representation of Hawkesbury

Hawkesbury has been under Racing NSW administration since December 2021, with Jo Moore appointed administrator in August 2023 after the club’s board resigned.

That makes its role in the provincial funding review distinct from the other four clubs. TTR asked who was formally determining Hawkesbury’s position in the review, and whether that position had been discussed with, or tested against, the views of members, trainers, management and other club stakeholders.

Moore passed the questions to Hawkesbury CEO James Heddo, who said, “Hawkesbury Race Club continues to work closely with Racing NSW and the Provincial Racing Association of NSW to achieve positive outcomes for the industry.”

No further response was provided before publication.

Heddo will leave Hawkesbury on Friday, July 17. The club has formally advertised for a new CEO, with applications closing last Friday. The advertisement stated the successful candidate would initially report to the Racing NSW-appointed administrator and, ultimately, to a board of directors.