Racing reforms in Queensland Discussion paper
Context Queensland Greyhound Racing Industry Commission of Inquiry The Queensland Greyhound Racing Industry Commission of Inquiry Final Report (the Report) was delivered to the Premier on 1 June 2015 and released publicly the following day. The Report is the culmination of three months of independent investigations into Queensland s greyhound racing industry. This investigation was prompted by allegations of the use of live bait in the training of racing greyhounds. However, the Terms of Reference were very broad and included, for example any other aspect of the Queensland Greyhound Racing Industry (including registered trainers operating from unlicensed premises) or its regulations that the Commissioner considers necessary. The report contains 15 recommendations collectively designed to ensure the welfare of animals in the industry, and the future integrity of Queensland s racing industry. The Queensland Government has accepted all recommendations in-principle. Sustainability of the Queensland Racing Industry Racing Queensland has been operating at a loss for the past five years. Racing Queensland made losses of $12.7 million in the 2012-13 financial year, $3.9 million in 2013-14 and $12 million in 2014-15. It is expected to make a loss of $28 million in 2015-16. The loss in 2015-16 is partly explained by unrealistic expectations about wagering revenue (e.g. there is a $6.8 million shortfall this financial year), the overlygenerous allocation of funds to prizemoney (this increased dramatically from 1 October 2014 and Queensland now returns more of the wagering revenue than any other state), lack of full consideration of the contested market for betting revenue, limited foresight in terms of major infrastructure being offline due to capital works, and the expansion of Racing Queensland s workforce and club subsidies. Racing Queensland is funded from wagering revenue. A formal agreement exists between Tatts and the State about racing industry funding. This agreement, signed in 2014, provides $15 million per year for 30 years and $97.4 million over nine years for infrastructure upgrades across the industry (refer to page 5 for details of the Tatts deal). Despite the Tatts deal, Racing Queensland s costs and returns to stakeholder groups continue to escalate beyond its revenue streams (including the Tatts deal). Prizemoney was increased from 1 October 2014. In the last five years, revenue has increased by 20% but direct operating expenditure has increased by 32%. This is unsustainable. The Queensland Audit Office has identified concerns with the ongoing viability of Racing Queensland and issued an interim audit report which added to the Queensland Government s concerns about the feasibility of racing infrastructure projects. While some actions have been taken to address these issues, these concerns have led to the State Government requesting the development of a long term sustainability plan for the racing industry in Queensland. 2
Purpose This discussion paper seeks input from key industry and other stakeholders on ways to improve public confidence and integrity in the racing industry with regard to the welfare of racing animals and the transparency of commercial operations of the racing industry with a view to creating an industry that is sustainable in the long term. Governance Racing Queensland In 2012, the Queensland Parliament approved legislative changes to establish a governance structure for the State s racing industry. The legislation established the Queensland All Codes Racing Industry Board (trading as Racing Queensland) as the overarching control body for the thoroughbred, harness and greyhound codes of racing. The Queensland All Codes Racing Industry Board came into being through an Act of Queensland Parliament on May 1, 2013 (the Racing Act 2002), and is a statutory board under the oversight of the Minister for Sport and Racing. The main function of Racing Queensland is to manage the codes of racing in the interests of all three codes, from a strategic to an operational perspective. Racing Queensland s focus is on the provision of governance and services to the industry while empowering clubs to manage and administer their own facilities. Racing Queensland performs the operational and regulatory functions for each code of racing by making policies and rules of racing, giving directions to members, and imposing penalties and sanctions for non-compliance in relation to the conduct of licenced animals, clubs, participants, venues and racing events. The powers and functions conferred on Racing Queensland by the Racing Act 2002 enable it to ensure that strategic issues are identified and assessed, responses are developed and implemented, and an effective framework for overseeing all codes of racing is in place. Racing Queensland is obliged to annually disclose its program to periodically audit the suitability of every licenced animal, club, participant and venue, and have a plan to manage its code of racing for the following year. Racing Queensland is a statutory body, and as a government entity, the staff are public officials bound by the Public Sector Ethics Act 1994, section 4. Options to improve the accountability and transparency of Racing Queensland will be explored. Options include, but are not limited to: changing the status of Racing Queensland from a statutory body to a statutory authority developing and applying additional conditions to improve accountability. Office of Racing The Office of Racing consists of two parts: Office of Racing Regulation and the Racing Science Centre. The Office of Racing Regulation provides a framework for the regulation of the Queensland racing industry, leading to improved integrity and public confidence that the industry is being operated in an accountable and responsible manner. The Office undertakes research and data-gathering and engagement with stakeholders to ensure policy advice is based on robust analysis. The Office of Racing works with other government agencies and stakeholders, to develop solutions and integrated policy advice. The Office of Racing monitors satisfaction and performance through regular consultations with Racing Queensland. This is achieved through: implementing and monitoring a regulatory and policy framework to sustain a commercially responsive and contemporary Queensland racing industry collaborating with and assisting the racing industry to meet its regulatory responsibilities under the Racing Act 2002 assessing and reporting on applications for control bodies and accredited facilities auditing, assessing and reporting on compliance with the Racing Act 2002 researching, analysing and advising on international, national and state developments and trends in racing, wagering and related industries. The Office of Racing will remain in some form to support racing policy and the Minister for Sport and Racing. The Racing Science Centre delivers independent, effective and quality assured drug control services to the Queensland racing industry. The Racing Science Centre is an accredited facility under the Racing Act 2002, providing a comprehensive range of racing integrity services including drug testing, research and related veterinary and scientific services. The centre also monitors, advises and makes recommendations to the chief executive and Queensland s principal racing authority about matters related to drug control in the Queensland racing industry. 3
Racing Queensland business Racing Queensland has operated at losses ranging from $12.7 million in the 2011-12 financial year to $3.9 million in the 2013-14 financial year. The expected loss for 2014-15 is $12 million. The Queensland Audit Office s interim audit report on 19 June 2015, requested a management response to address concerns about Racing Queensland s on-going viability. Compared to the previous financial year, Racing Queensland s finances for 2014-15 are summarised below: total revenue was up $13.6 million, however wagering revenue was $8m behind budget total expenditure was up $21.6 million, primarily due to the increased levels of prizemoney from 1 October 2014 total wagering revenue is forecast to be $167 million, down $7.5 million on the expected budget total prizemoney is $125 million up $15.6 million overall deficit of $12 million up $8.1 million on the $3.9m loss for FY2014 1. Racing Queensland has reviewed its budget for the 2015-16 financial year. It has identified approximately $6 million in savings from administration, marketing, limiting further proposed expansion of its workforce and limiting capital works to emergency club capital works. However, the forecast budget is still expected to be in deficit by $28 million. Racing Queensland s expenditure is as shown below: Prizemoney Trainers 10.5% Prizemoney Jockeys 2.5% Prizemoney Harness Drivers 0.5% Prizemoney Owners 48% Jockeys 7% Harness Drivers 0.5% Breeding Schemes 4% Club Subsidies 8% RQ Costs 19% 1 Note these figures relate to Racing Queensland and not the consolidated group as disclosed in the annual reports. The loss for the consolidated group for FY2014 was $4.382m as reported. 4
Revenue Revenue streams Racing Queensland is funded primarily from wagering revenue. The formal agreements between Tatts and the State about Racing Industry funding are documented in two separate agreements: Product and Program Deed Fixed and Variable Product Fees between Racing Queensland and Tatts Exclusivity Deed between the State of Queensland and Tatts. The first, the Product and Program Deed, provides a fixed fee of $15 million per year for 30 years indexed at 80% of CPI, and a variable fee made up of 39% of Gross Race Wagering Revenue and 2.5% of Sport Retail Wagering Revenue. The fixed fee component is in addition to the variable fee components, which Racing Queensland has always received from Tatts. The Exclusivity Deed provides funds for infrastructure upgrades across the industry of $97.4 million paid in four equal instalments over nine years. The first payment was received in January 2015. The Department of National Parks, Sport and Racing disburses funds from the Racing Infrastructure Fund on the completion of project works/milestones once the project is approved by the Minister for Sport and Racing and the Treasurer. Racing Queensland provides these funds to racing clubs. All infrastructure business case costs are met by Racing Queensland and if the project is approved, these costs are refunded to Racing Queensland from the fund. Race information fees Revenue for Racing Queensland from Race Information Fees was forecast to increase in the 2014-15 financial year as changes were made to the fee structure, the gross revenue method was abolished and the fee rates for fixed odds and derivative based were increased (while holding traditional parimutuel rates at 2013-14 rates). Race Information is the use of Queensland thoroughbred, harness and/or greyhound race information to accept or facilitate wagering in any way, whether recording electronically or in hard copy form, in betting ledgers or on betting tickets, using the information to accept and process bets by telephone, in person, by internet and whether on one or several animals in any one race. A licensed wagering operator may apply for an authority to use Queensland race information and pay the relevant application fee (currently $150). Revenue from licensed wagering operators, other than UBET, is determined by a percentage of wagering turnover depending on whether the user of the race information is a tote, a corporate bookmaker or a betting exchange, and whether it is a standard or premium race. In 2013-14, revenue from licensed wagering operators for Race Information Fees in Queensland was $43.8m. In comparison, Racing Victoria Limited s race information fee revenue for the same period was $85.1m. The current race information fee structure is being held at 2014-15 levels until 30 September 2015 as Racing Queensland is currently consulting with wagering service providers regarding changes to the current fee structure. Noting that racing information fees are a source of revenue for Racing Queensland, should the racing fees be held at their current levels? If so, for how long? 5
Expenditure Club subsidies Racing Queensland provides subsidies to racing clubs (TAB and non-tab) in Queensland with subsidies to support the race tracks. In addition, Racing Queensland has been assisting clubs with additional subsidies to meet fixed costs where tracks are not being used because of renovations, or when meetings are transferred and loans for clubs need to be written off. Some clubs have three year plans to repay advance payments. Club subsidies have escalated from $9.5 million to $15.2 million over the last five years, which was 8% of Racing Queensland s total expenditure. The last review of subsidies was in 2012-13 when these escalated sharply across all three codes. Not only have horse racing clubs been supported, but also greyhound clubs. Established in 1998, the Training Track Subsidy scheme was designed to offset the cost of providing training facilities at Thoroughbred TAB and non-tab tracks. Over 66 of the 120 thoroughbred clubs receive payment as a contribution to offset costs of training for starters generated at the facility. The amount contributed to clubs only partially offsets the training costs to clubs. Half the clubs have dedicated training tracks and others use the course proper for training and racing purposes. There is no requirement to acquit these costs against the agreed purpose and Racing Queensland does not seek any other confirmation that these subsidies are used for purposes other than those designated. 1. Should club subsidies be paid: To maintain race tracks? To cover the loss of foregone revenue while tracks are being maintained? To write off club loans? 2. Would it preferable for Office of Racing to support clubs with management training? 3. Is a separate training track subsidy scheme still required? $2 million per annum is paid to Thoroughbred clubs. This is split between a threshold payment of $1.2 million and an incentive payment of $800,000. Racing Queensland has categorised race clubs providing training facilities into seven (7) grades which reflect the extent and quality of the training facilities provided. Only those race clubs categorised into grades 1-7 are eligible to receive a base threshold payment which the State pays directly to clubs. The incentive payment is a payment based on the actual number of starters provided by a recipient s particular venue to the Queensland racing industry during the financial year. Clubs graded into category 8 are only entitled to receive an incentive payment based on the number of starters provided by the venue. Racing Queensland agrees to administer the funds by making the Incentive Payments to Recipients, providing a financial reconciliation to the State of all Threshold Payments and Incentive Payments made under the Scheme, and ensuring the benefit of the public funding to the Queensland racing industry. 6
Support for Jockeys Racing Queensland s Workplace Health and Safety Policy provides a clear outline of its obligations and expectations regarding the maintenance of workplace health and safety standards. This policy applies to all employees, including permanent, casual and temporary personnel of Racing Queensland unless otherwise identified by the CEO. The policy also applies to contractors and sub-contractors (and their employees), volunteers, work experience students and employees engaged on labour hire arrangements. Over the last four years there has been a significant increase in jockey Workcover, jockey riding fees, and jockey superannuation, as outlined below: Jockey Public Liability Insurance for 2013/14 $219,790; 2014/15 $244,544 Jockey Personal Injury Insurance for 2013/14 $507,737; 2014/15 $504,057 Jockey WorkCover for 2013/14 $3.11m; 2014/15 $3.6m. This is on top of the additional administration and maintaining administration of the collection of jockey membership fees and maintenance of the 1% prizemoney contribution on behalf of the Queensland Jockey Association. The 1% of prizemoney is used to fund public liability insurance and personal injury insurance and jockey welfare such as specialist doctors. In addition, there is a new national requirement being introduced that all jockeys are to wear a particular helmet type. The cost of new helmets is approximately $320,000 for all Queensland jockeys. Jockey riding fees and superannuation There has been a significant increase in jockey riding fees with a three year agreement from 1 October 2014 increasing from $165 per ride to $167.50 and increasing to $170 per ride for FY16 and $175 per ride for FY17 and ending on 30 June 2017. Total for 2013-14 was $8.1m not including superannuation. Superannuation at 9.5% is added to the riding fee and was backdated to 1 July 2014 at an additional cost. The barrier trial riding fee is set at 35% parity of the jockey riding fee plus superannuation and is on the same three year deal expiring on 30 June 2017. Superannuation is an essential element for today s workforce. Currently superannuation for jockeys is paid for by Racing Queensland. There are discussions about whether it is the role of Racing Queensland to pay jockeys, and whether this payment should come from prizemoney or from owners. Who should pay jockeys to ride in a race? To ensure jockeys are paid, should their riding fees be deducted from the prizemoney? If riding fees are deducted from prizemoney, should superannuation be deducted as well? Should jockeys be required to purchase their own personal protective equipment? What level of one-off subsidy should Racing Queensland provide to jockeys for personal protective equipment, given this change in standard? 7
Inter-jurisdictional comparison States allocate 1% of total prizemoney (or its equivalent) to fund Public Liability Insurance (PLI), Personal Accident Insurance (PAI) and Welfare Programs for jockeys. Jockeys are recognised as employees for the purposes of the relevant workcover legislation in all states except Queensland and ACT. Victoria Riding fees Jockeys receive a standard riding fee, which is reviewed from time to time, in addition to receiving 5% of any prizemoney won. The current riding fees for 2014-15 are: Flat ride fee: $186 Jumps races ride fee: $395 These are up from $171 in 2012, $175 in 2013, $345 in 2012, up to $360 in 2013. In 2012 Racing Victoria signed a three year agreement with the Victorian Jockeys Association (VJA) which took effect on 1 August 2012. The agreement specified that jockeys would receive (on average) a 3.2% increase on riding fees per year for three years. The increases occurred as follows: 2.7% increase from 1 August 2012 3.3% increase from 1 August 2013 3.8% increase from 1 August 2014. Superannuation Superannuation is paid to jockeys by Racing Victoria on behalf of the Racing Clubs. The superannuation scheme for retired jockeys is administered by Australian Super and is known as the Jockeys Super Benefit scheme. Jockeys are able to have contributions deducted directly from their riding fees if they choose this fund. Career Benefit Scheme The Career Benefit Scheme has been established to provide a level of financial support when a jockey retires from race riding or is in need of financial assistance. To be eligible to participate in the scheme, a rider must be a Victorian resident and be a registered Victorian Jockey, who is a member of the Victorian Jockeys Association or an apprentice jockey indentured in the State of Victoria. Eligibility will also require the jockey to make a minimum contribution of $15 per ride into the Australian Super Jockeys Super Benefit scheme or other approved superannuation fund. If this contribution is made, Racing Victoria will contribute $10 per ride into the Career Benefit Fund. Subject to Racing Victoria s discretion, the Career Benefit Fund can be accessed when a jockey: Has reached 35 years of age, or Has made application on the grounds of financial hardship, or Has died. Workcover Jockeys are deemed employees under the relevant legislation. Workcover is provided for jockeys in Victoria by Racing Victoria Limited. The total amount of Workcover paid has fluctuated over the past four years, from $4,526 in 2011, to $4,317 in 2012, to $4,126 in 2013 and to a high of $4,875 in 2014. Other benefit schemes/support 1% prizemoney allocation Racing Victoria has reaffirmed its commitment to the continued allocation of an amount equivalent to 1% of the industry s total prizemoney pool to jockey wellbeing. This investment includes the payment of jockeys personal accident and public liability premiums, the provision of a 24/7 counselling service, medical consultant and a wellbeing and safety officer, the delivery of personal development programs and the funding of the Career Benefit Fund (CBF). Victorian Jockeys Assistance Program Racing Victoria and the Victorian Jockeys Association provide support for jockeys and their families through the Jockey Assistance Program. The Program has been developed to continue the professional approach to the sport and highlight the image of jockeys as highly-skilled athletes. The program provides support to jockeys and their families in a number of different areas. The program consultants have expertise, qualifications and experience in the allied health and sporting fields. 8
Racing New South Wales Riding fees Jockeys receive a standard riding fee, in addition to receiving 5% of any prizemoney won. The current ride fees for 2014 are; Race Ride $191.65 per ride plus GST (if any) Barrier Trial $67.07 per ride plus GST (if any). These are up from $150 in 2009 and $120.75/$42.26 GST in 2004. Superannuation Superannuation is paid by Racing NSW on behalf of the owners. From 1 July 2014, payment of 9.5% superannuation for race rides and barrier trial rides will be made for all jockeys and apprentices to the superannuation fund of their choice. The payment, made on behalf of the owners, will comprise redirecting the previous allocation of $10 per ride career futures fund payment, and an increase of 3.8% to the riding fee. Workcover Racing New South Wales is a licensed Specialised Insurer within the New South Wales workers compensation jurisdiction. Jockeys, including apprentices and approved riders who are injured while riding in a race, barrier trial or track work at a New South Wales racetrack, are entitled to the full range of workers compensation entitlements prescribed under NSW workers compensation legislation. Cover is also extended to jockeys injured while riding at a meeting conducted at the Canberra Race Club at Thoroughbred Park. Jockeys injured in these circumstances are deemed to be workers of the race club or association conducting the meeting. Other benefit schemes/support As part of Racing NSW s continuing commitment to improving jockey welfare, the Jockeys Benefit Scheme was established to provide financial assistance and other forms of support to NSW and ACT jockeys in need, or preparing for a new career. The Jockeys Benefit Scheme comprises: The Jockeys Benefit Scheme Trust, a public charitable trust established to provide financial assistance to former and current NSW and ACT jockeys and their families who are in necessitous circumstances The JBS Discretionary Fund from which funding is provided for programs and initiatives to benefit jockeys welfare both during their riding career and upon retirement. The Jockeys Benefit Scheme Trust was founded by Racing NSW in February 2011 with the aim of relieving financial stress and improving quality of life for NSW and ACT jockeys, ex-jockeys and their families who are in necessitous circumstances, especially (but not limited to) financial hardship caused through a jockey being seriously injured or dying (whether on a racetrack or otherwise) or suffering a severe illness. The public activities of the Trust are conducted under the name NSW Jockeys Trust. Funding for the Trust is provided from the 1% of all prizemoney allocated to NSW Thoroughbred race meetings which has been deducted by Racing NSW for the benefit of jockeys insurance and welfare programs since July 2009, and through public donations. Racing NSW also provides secretarial, administrative and marketing support to the Trust at no cost, so that every dollar donated is available to assist jockeys and their families in need. During 2013-14, $18,000 was distributed for payment of medical procedures, rental assistance, clothing and education costs, day-to-day living expenses and specialised purchases as determined appropriate. The Australian Racing Board Ltd (ARB), in conjunction with the Australian Jockeys Association and the Principal Racing Authorities, on behalf of all licensed jockeys and apprentices, have appointed Gow-Gates Insurance Brokers (Australasia) Pty Ltd to arrange a personal accident insurance plan. Gow Gates also arrange Public Liability and Professional Indemnity Insurance for Jockeys and Apprentices. 9
The Jockeys Association carefully scrutinise the policies to obtain the best possible coverage for rides at a reasonable rate. There is no charge to jockeys and apprentices. The total premium cost for all policies is paid by Racing NSW from the 1% of prizemoney deduction, granted by the ARB on behalf of the industry, to Jockey Welfare programs. The JBS Discretionary Fund provides funding for programs and initiatives to benefit jockeys welfare both during their riding career and in retirement. During 2013-14, over $106,000 was distributed from the JBS Discretionary Fund towards providing NSW jockeys with vocational and life skills training, career transition support, business start-up assistance and counselling services. Every rider, when mounted on a horse, must wear a properly fastened safety vest that conforms to the standard prescribed by the Australian Racing Board. Further to this requirement, the rule specifies that every safety vest shall be in a satisfactory condition and must have the manufacturers label attached stating it complies with the relevant standard. Any rider required by the rule to wear a safety vest may be penalised if he/she wears or has in his/her possession any safety vest that does not conform to a standard which has been prescribed by the Board or which has been modified in any way. Manufacturers advise that skull caps are no longer serviceable after five (5) years has expired since the date of manufacture. All riders (including stablehand and trainers) are reminded under AR87AA that such helmets must immediately be replaced. Furthermore, if the skullcap sustains a severe impact or if the rider suffers from concussion following a fall, the skull cap must immediately be replaced. Western Australia Racing and Wagering Western Australia Riding fees Apprentice jockeys and jockeys receive a riding fee for every race ride along with 5% of any prizemoney earned by the horses ridden. The riding fee in WA increases by $5 per year. Current riding fees: flat ride fee $178 including superannuation the jockey ride fee will increase by $5.45 to $183.45 per ride, including superannuation on 1 August 2015. Workcover The workers compensation premium that RWWA is required to fund for riders will increase by a further 27%, taking total additional funding for jockeys in 2015-16 to $675,000. South Australia: Thoroughbred Racing S.A. Limited Riding fees Apprentice and registered jockeys receive a $90 riding fee plus 5% of any prizemoney earned by the horses ridden. Workcover Jockeys Workcover & Insurance made up $680,000 of industry payments in 2013 and $850,000 in 2014. Total payments for Workcover and insurance for jockeys were $964, 785 in 2012, $712,360 in 2013, and $852,771 in 2014. Other benefit schemes/support 1% of prizemoney (or its equivalent) to fund Public Liability Insurance (PLI), Personal Accident Insurance (PAI) and Welfare Programs. Every rider shall be responsible for the care and condition of his helmet. A helmet is not regarded as serviceable and must be immediately replaced by the rider when: a period of 5 years has expired since its date of manufacture, or it sustains a severe impact, or the wearer suffers from concussion following a fall. 10
Jockey trust fund Racing Queensland administers a trust fund that holds earnings from apprentice jockeys, less approved withdrawals, to be transferred to the jockeys when they reach 18 years of age. This is an administrative cost to Racing Queensland. Harness Drivers Harness drivers fees are approximately the same across the states. Fees range from $40 in South Australia to $70 in Western Australia. In New South Wales the drivers fees equate to 1% of the total prizemoney for the race in question (a minimum of $30 and a maximum of $100). All states Workcover for jockeys also covers harness drivers. Should the Jockeys trust fund be held by the Jockeys Association rather than Racing Queensland? What should the fees be for harness drivers? Should harness driver fees be paid from prizemoney? Should harness drivers have the same conditions as jockeys (for example 9.5% superannuation?) 11
Prizemoney Prizemoney has significantly increased from 2011-12 to 2014-15 to $125 million. In the last year, the increase has been $15.6 million. Over the 3 year period, there has been $14.7 million increase in thoroughbred prizemoney, $5.2 million increase in greyhound prizemoney and $2.4 million in harness prizemoney. Prizemoney is set to increase further in 2015-16 and is a significant contributor to Racing Queensland s projected $28 million loss. Racing Queensland has increased prizemoney across the three codes. The focus was increasing metro mid-week and Saturday prizemoney and across the state including non-tab for thoroughbreds and an increase in Stradbroke prizemoney. This was consistent across the codes. Based on a business as usual scenario in 2015-16, Racing Queensland anticipates total prizemoney will increase by $14 million under the current race schedule. This includes a $2 million increase in prizemoney for the Magic Millions race day, making it one of Australia s richest race meetings. 200 150 Millions 100 50 0 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Prizemoney Thoroughbred Prizemoney Greyhounds Prizemoney Harness RQ Revenue 12
Prizemoney increased across the three racing codes (20% for thoroughbreds, 16% for harness and 50% for greyhounds) on 1 October 2014 and increased by over 16% (or $17 million) in 2014-15. Meeting Status Prizemoney levels to 30 September 2014 Prizemoney levels from 1 October 2014 Metro 45,000 65,000 Metro Midweek 17,000 20,000 Public Holiday Metro 17,000 50,000 Prov 1 13,000 16,000 Prov 1 Sky 2 130,000 12,000 Prov 2 11,000 14,000 Prov 3 a 10,000 13,000 Prov 3 10,000 12,000 Prov 3 Sky 2 10,000 10,000 Strat 6,000 7,000 Non Strat 5,000 7,000 TAB Club - Non TAB 7,500 7,500 Picnic 2,000 2,000 13
Harness prizemoney levels per race Meeting Status Prizemoney levels to 30 September 2014 Current Prizemoney levels Metro Monday 2,000 - Metro Tuesday 5,500 7,000 Metro Tuesday Conditioned - 4,000 Metro Tuesday Restricted 4,000 3,001 Metro Wednesday 3,500 5,000 Metro Thursday 3,250 3,001 Metro Friday 4,500 6,000 Metro Friday Conditioned 4,000 Metro Friday Restricted 4,000 3,001 Metro Sunday 2,000 2,000 Q Feature 14,999 14,999 Fast (Open Class) 14,000 14,000 QO/Q1/Q2 11,000 12,000 CMO/Claimer 8,000 12,000 Trot - 8,000 Restricted - 8,000 2nd Div QO/Q1/Q2 6,000 8,000 Prov 1 Monday 2,000 - Prov 1 Tuesday 5,500 7,000 Prov 1 Wednesday 3,500 5,000 Prov 1 Wednesday Conditioned - 3,500 Prov 1 Wednesday Restricted 3,500 3,001 Prov 1 Thursday 3,250 3,001 Prov 1 Friday 4,500 6,000 Prov 1 Sunday 2,000 2,000 Marburg Non TAB 1,501 1,501 Prov 1 Non TAB 1,501 1,501 Grass Track/Sunday 2,000 2,000 14
Greyhound prizemoney per race Meeting status Venue Meeting Status Prizemoney levels to 30 September 2014 Current Prizemoney Levels Metro Thu Open Brisbane Metro Thu 7,100 9,025 Metro Thu Graded Metro Thu 5,300 7,600 Metro Thu Graded Metro Thu 4,860 7,125 Metro Mid Graded 1 Metro Mid 2,075 3,088 Metro Mid Graded 2 Metro Mid 1,775 2,613 Metro Mid Maiden Metro Mid 1,225 1,900 Metro Sun Graded 3 Metro Sun 1,275 2,138 Metro Sun Maiden 3 Metro Sun 1,225 1,663 Prov 1 Sat Graded 1 Ipswich Prov 1 Sat 2,075 3,088 Prov 1 Sat Graded 2 Prov 1 Sat 1,775 2,613 Prov 1 Sat Maiden 2 Prov 1 Sat 1,225 1,900 Prov 1 Mid Graded 3 Prov 1 Mid 1,275 2,138 Prov 1 Mid Graded 3 (Tue/Fri) Prov 1 Mid 1,225 1,663 Prov 2 Open 6 Townsville Prov 2 1,175 1,663 Prov 2 Graded 6 Prov 2 925 1,140 Prov 3 Open 6 Rockhampton Prov 3 1,175 1,663 Prov 3 Graded 6 Prov 3 925 1,140 Non TAB 1 Graded 5 Capalaba Non TAB 1 575 760 Non TAB 2 Graded 4 Bundaberg Non TAB 2 575 760 Non TAB 3 Graded 4 Cairns Non TAB 3 575 760 Given each of the three codes will run at a loss in 2014-15 with prizemoney levels not covering the downturn in wagering revenue, the current level of prizemoney is unsustainable. The Magic Millions deal was struck so Queensland would have Australia s richest race. No review of costs was undertaken. There was no consideration of the additional annualised financial implications. Given the financial status of Racing Queensland, is the level of prize money sustainable? 15
Inter-jurisdictional comparison Racing Victoria (RV) has significantly increased prizemoney to $174.2 million (excluding Victorian Owners and Breeders Incentive Scheme bonuses) for the 2015-16 season. This is a $16.5 million increase on the 2014-15 season and completes a 21.3% increase in total prizemoney since 2012. The prizemoney increase took effect on 1 August 2015. It is aimed primarily at rewarding participation at the base of the sport and providing owners with the potential for earlier returns. It includes an allocation of $3 million to enhance Victoria s feature late summer/early autumn racing period pending the completion of an RV-led industry review into the state s feature race calendar. The NSW industry delivered increased prizemoney and returns to owners. Returns to owners increased by 11% to $192.2 million in total. Item 2013/14 Prizemoney and Racing NSW Breeder Owner $177,981,754 Bonus Scheme (BOBS) Other payments on behalf of owners $14,174,966 (i.e. jockey riding fees) Total $192,156,720 Queensland Thoroughbred Incentive Scheme The Queensland Thoroughbred Investment Scheme (QTIS) offer will increase by $3 million from 1 August 2015 to $13 million. This scheme is a key driver of the Queensland breeding industry and to attracting investment from local and interstate owners through: a 6% breeders bonus being awarded to the winner of all QTIS races provided the breeders payment has been made all 2YO and 3YO races in Queensland becoming part of the QTIS program a 50% increase to the standard bonus for fillies and mares. This will apply to 2YO fillies from August 2015, 2YO and 3YO in 2016 and 2YO, 3YO and 4YO in 2017 free racing for all QTIS registered 2YO in the state for 2015, then for 2YO and 3YO from 2016 an additional $150,000 QTIS race at the Gold Coast coinciding with the 2015 March QTIS sale, which will be open to any QTIS horse of any age the addition of selected 4YO races for QTIS horses across the state, with a particular focus on regional Queensland. Western Australian thoroughbred racing continues to provide healthy returns to owners via stake payments, breeding bonus schemes and other subsidies. In 2015-16, Racing and Wagering in Western Australia and Western Australian Race Clubs will pay out in excess of $55 million in prizemoney and $5.5 million in WestSpeed bonuses. In South Australia, prizemoney has increased 61% over the past seven years from $18.4 million in 2006-07 to $29.6 million in 2013-14. In 2014, prizemoney, including SABOIS, increased by $750,000. Is free racing for all QTIS registered horses viable in the current financial situation? Should the bonus be reduced in the outyears to 5%? What level of subsidy is appropriate? Throughout the year the club distributed $3,878,526 in prizemoney, trophies and subsidies across 173 races. For the financial year 2013-14 prizemoney for standard races, compared to the previous year, increased from $14,000 to $15,000 for maiden races on the Course Proper and from $12,000 to $13,000 for all races on the Acton Track. 16
Oncourse Fielding Incentive Scheme Racing Queensland introduced a scheme called the Oncourse Fielding Incentive Scheme (the scheme) designed to assist clubs and oncourse Queensland bookmakers. There are three categories of eligibility under the scheme: 1. racecourse facilities licensed clubs are eligible to apply for assistance to establish and maintain facilities at racecourses such as the bookie stand area, TV monitors, and power and communications connections 2. oncourse bookmaking licensed wagering operators are eligible to apply for assistance to conduct oncourse bookmaking activities 3. specific initiatives industry participants, including licensed clubs or licensed wagering operators, are eligible to apply for assistance for specific initiatives aimed at assisting the development of vibrant and valuable oncourse activities in Queensland. Is the Oncourse Fielding Incentive Scheme in alignment with the core role of Racing Queensland? Should clubs charge oncourse bookmakers stand fees (rather than Racing Queensland paying this amount)? The scheme subsidised clubs with more than $1 million per annum, which was reduced to $800,000 in 2014-15. Racing Queensland, however, also paid clubs the fielding fees/stand fees that clubs used to charge oncourse bookmakers. Racing Queensland also paid clubs on application for improving the oncourse bookmakers experience by upgrading TVs, stands, and boards and bookies arenas. 17
Country Racing 2014-15 was the third year (of a four year commitment) that saw the Queensland Government provide $1 million annually in funding for three Country Racing Series, to assist in rejuvenating country racing in Queensland. This commitment from the Queensland Government, together with an additional funding injection from Racing Queensland, resulted in 20 additional race meetings being conducted throughout country Queensland. Race programming was adjusted and now second and third tier clubs receive TAB race meetings (10 additional TAB meetings Country Showcase Series, eight Celebrate Series and two Sustain Country Series). Country clubs showed significant signs of improvement under the new arrangements. Clubs like Yeppoon, Oak Park, Longreach and many others hosted significant race days throughout the year. In North Queensland, the Cairns Amateurs was a highlight. Racing Queensland supported the country clubs over and above its legislative requirement of 5.32% in prizemoney. In 2013-14, this additional prizemoney amounted to almost $3.5 million and in 2014-15 this is estimated to amount to $4.8 million. In addition, Racing Queensland provided $11 million in 2013-14 (up from $7.55 million in 2012-13) and is estimated to provide $14 million in 2014-15 in other contributions (over and above its obligation to these country meetings) through TAB payments at non- TAB clubs, club administration/subsidy payments, subsidisation of insurance, jockey riding fees, contribution to the Australian Jockey Association, wages, and payments for travel and communication costs. In 2014-15, the Queensland Government subsidy was $1 million while the direct costs to Racing Queensland were $1.9 million for prizemoney, QTIS, Club Subsidies, Vision for non-tab meetings becoming TAB meetings and Jockey riding fees, noting that this excludes other stewarding and integrity costs. Racing Queensland is servicing almost 300 non-tab race meetings and paying for Racing Queensland staff to manage and support country, non-tab racing in raceday planning, prizemoney, dedicated non-tab Thoroughbred Racing Manager to service, licensing, finance and club compliance. How should Racing Queensland and country clubs reduce the costs for country racing to enable these race meetings to manage within the $1 million subsidy provided by Queensland Government? Could local club members be trained in specific roles to reduce Racing Queensland having to pay their staff to attend? Should the State Government continue to provide financial support in the form of $1 million annually for country race meets? 18
Race appearance fees A new initiative of paying for appearances at race meetings was introduced in 2013-14. The cost of this initiative in 2014-15 was $1.6 million. Of particular concern is allowing clubs to make this payment in cash. The cash payment to greyhound trainers for appearing in a race raises risks relating to fraud and GST compliance. Given the current level of prizemoney is this incentive payment needed? It is questionable whether this incentive has increased nominations, as the number of nominations already exceeded the number of starters during a month. 6,400 5,900 5,400 Appearance Fee Started $40 Prize Money Increase Live Baiting Uncovered Increased Licence Requirement 4,900 4,400 Appearance Fee Reduced to $15 3,900 3,400 2,900 Jan-14 Feb-14 Mar-14 Apr-14 Nominations Starters May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 19
Racing Queensland Organisational costs Racing Queensland implemented the program subsidising the Hendra Virus vaccine to improve the number of horses that are vaccinated across both codes to ensure the safety of its participants. The majority of clubs, both racing and recreational, now make this vaccination a requirement of entry into competitions and events. Should all race horses, as part of their registration, be required to be vaccinated for the Hendra Virus? Infrastructure In all sporting codes, the maintenance and redevelopment of infrastructure is an ongoing issue for clubs and their management boards. Attendance and volunteers are reducing over time as opportunities for alternative activities grow. Hence, the revenue and manpower to maintain assets is becoming problematic within a large number of sporting clubs. For the majority of racing clubs across Australia, the visitation numbers are falling (estimated at 6% per annum). Racing Clubs have a responsibility to manage maintenance and their assets. Apart from using the Racing Infrastructure Fund to support major infrastructure projects, Racing Queensland has approved minor capital works from operational funding. Racing Queensland s role is to empower clubs to manage and administer their own facilities. Clubs therefore have an integral role in project managing any new developments and managing their assets. Should Racing Queensland, or the owners, be responsible for vaccinating horses? What role should Racing Queensland have in infrastructure decisions? FF identify projects FF work with clubs to finalise their business plan FF prioritise projects FF seek Board approval to submit the prioritised list of projects to the Queensland Government FF adhere to the funding agreements between Racing Queensland and Queensland Government. What are appropriate roles for Clubs? FF project management FF approve tenders FF provide monthly reports to Racing Queensland. 20
Other options to fund infrastructure includes a loan arrangement to a Club when the infrastructure project is a commercial project. For example, a club may work with a developer to build units on part of the grounds to allow the club to upgrade its member facilities and develop a non-racing revenue stream. Should Racing Queensland be the financier for these projects? Animal Welfare and Integrity There are many animal welfare and integrity issues arising in racing that are approached differently by control bodies in each state. Owners and trainers, if appropriately licensed, can race their animals in different states. The following highlight areas of differentiation which have been identified as impacting on animal welfare and integrity in Queensland. These have been raised with Racing Queensland by the Racing Animal Welfare and Integrity Board RAWIB) and/or the Office of Racing. Hot Weather Policy Both greyhounds and horses can be affected by heat and humidity. However, unlike horses and humans, canines sweat only through the pads on their feet and the pores on the tip of their nose. This allows little evaporative cooling with canines relying on panting for their cooling. This is reasonably efficient if the humidity is not high. In Racing Queensland s 2013-14 Annual Report it acknowledges that environmental factors, including extreme weather events and a changing and more variable climate, could have an impact on racing in Queensland. Racing Queensland has a protocol to assist clubs and participants in caring for greyhounds in hot weather. In Queensland, if the temperature is forecast to be above 38 degrees (on the basis of information from the Bureau of Meteorology) trainers may scratch all their greyhounds without penalty if the trainer has a journey exceeding one hour to get to the race track, or does not have air-conditioned transport for the greyhounds. In Victoria, the temperature for scratching is 32 degrees. Research from South Australia, indicates that ambient temperatures of more than 33 degrees may pose a significant risk to the animal s welfare, both while travelling to the track and while racing. Cancellation of meetings where the ambient temperature is 40 degrees or more is consistent across states and is validated by research that racing at temperatures above this poses a risk of heat stroke. Should Queensland reduce the temperature at which trainers can scratch their dogs from racing without penalty to (at least) 35 degrees, given the number of days Queensland has above 32 degrees and the increased humidity in Queensland compared with other states? 21
Sampling of Animals post-race Track Fatality In Queensland, there is no mandatory requirement for samples to be taken pre or post-mortem when a fatality, greyhound or horse, occurs at the track. The increased use of drugs in horses in racing in the United States has highlighted welfare issues such as an increased incidents of heart failure in young, otherwise healthy horses. Media articles in Australia in relation to the use of cobalt, methamphetamines and other drugs in horse and greyhound racing highlights the scrutiny being placed on racing by the public. It is necessary in the case of a race track fatality to rule out whether doping or nontherapeutic medications were a factor. This is imperative to uphold the integrity of the industry, and vital in the situation where there has also been human (jockey) injury. In Victoria, all horses that die, or are destroyed while competing at a metropolitan race meeting, are sent for post-mortem examination. On country racecourses, a post-mortem examination is to be performed where appropriate, such as if a jockey is injured, in a case of the unexplained death of the racing animal or if there are unusual circumstances associated with the injury. Sample Collection Officials at all Race Meetings In some race tracks in Queensland, the race day veterinarian also performs the duty of the sample collection official. This is less than ideal as it impacts on the ability of the veterinarian to attend all race starts (in the case of greyhound races), and limits their ability to attend to examinations of injured or poor performing racing animals, as requested by the chief steward. In addition, it limits the numbers of post-race samples which can be taken as the veterinarian does not have time to sample after every race while also performing veterinary functions. In addition to these welfare issues, there could be a perceived issue with the integrity of race day samples taken when the veterinarian collecting the sample from an animal is the private veterinarian for the trainer whose animal is being sampled. Should at least one sample collection official be employed at every race meeting for every code, in addition to the race day veterinarian? Should Racing Queensland adopt a similar policy to require mandatory post-mortem sampling at the very minimum, (with a full post-mortem examination at metropolitan tracks and a post-mortem examination at provincial and country tracks)? 22
Guidelines for Race day Veterinarians Guidelines for race day veterinarians are only available for the thoroughbred code of racing in Queensland. There are no such guidelines provided for the greyhound or harness codes. Given that many different veterinarians attend race meetings, these guidelines provide consistency. This is especially important in respect of such matters as, for example, biosecurity, given the existence of Hendra Virus, and the need for veterinarians to be aware of the Racing Queensland Biosecurity Plan for Suspect Hendra Virus Cases, and the death of a racing animal, and the requirements in respect of post-mortem sampling and examinations. The Office of Racing has provided templates for race day guidelines for greyhound and harness veterinarians which could be adapted. Should there be guidelines for race day veterinarians in greyhound and harness racing? Should there be management guidelines and Standard and Safe Operating Procedure to ensure the quality of the water and the health and safety of horses and people using equine swimming pools/dams? Consistency of stewarding Currently, Racing Queensland does not have an updated manual of procedures for stewards and application is known to vary across racing meetings and codes. A comparison between Stewards Reports (which are in the public domain), and samples received at the Racing Science Centre indicate that stewards are failing to report the numbers of animals sampled accurately. Both Racing Victoria and Racing NSW report all horses sampled by name on their respective websites. Procedures and protocols for Equine Pools at Racetracks in Queensland Some racetracks in Queensland have an equine pool (or dam) facility which provides trainers with the opportunity to swim their horse. Such pools are used to exercise and rehabilitate horses. They provide cardiovascular conditioning without incurring the stress to the race horse s legs and joints associated with on-track training. Following the death of a racehorse at the Toowoomba Turf Club equine pool, the Office of Racing investigated the pool, and the policies and rules surrounding the use of these facilities in Queensland. Racing Victoria has Standard and Safe Operating Procedures for the use of the equine pool/dam to ensure the quality of the water and the health and safety of horses and people using these equine pools/dams. Should all stewards be required to be trained against a standard operating manual to get consistency between codes? 23
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