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Financial Dramas In South Australia

Wednesday, 20th October 2010

In Adelaide, "just 9 years after the sale of the South Australian TAB was supposed to secure a prosperous future, it's clear, if a number of unresolved issues don't fall its way, the state's thoroughbred racing is headed into stormy financial waters," declared Craig Cook in The Advertiser. Departing Thoroughbed Racing South Australia chairman Philip Bentley "covered some of the most pressing matters in his final report that declared TRSA's profit plummeted to a meagre $267,000 last season from $6.76 million in 2008-09. While prize-money levels have benefited significantly in recent times, the promise of further increases are not fixed in cement." Cook noted TRSA "has been rocked by the recent announcement" from the SA Jockey Club that it will not "guarantee" annual contributions to prizemoney (of $3 million) from its sale of Cheltenham racecourse. SAJC chairman David Peacock emphasised in a members' newsletter: "There was never any commitment beyond that (initial) sum of $10.25 million." The SAJC says any further decisions on prize-money funding will require "a strong business case" & "will need to be considered by members". Cook reports there is "a growing sentiment from the jockey club that it is unreasonable to expect it to 'bail out' TRSA if the authority has over-committed its funds. TRSA has been left 'holding the baby' over a $7 million funding gap for the Gawler development - and it only has itself to blame." Supreme Court action taken by Gawler council, over the proposed sale of land at Gawler racecourse, has resulted in TRSA servicing "a hefty on-going interest bill" (totalling about $35,000 a month) "until the matter is resolved". If the council wins its case, "the value of the land will likely drop dramatically & TRSA will still be left to cover the gap". In addition, a court case "involving payments from corporate bookmakers also has the potential to significantly damage racing's bottom line": a loss in the courts "would mean TRSA repaying monies already received from bookmakers that runs to millions of dollars" & "even a settlement could result in a reduction in anticipated revenues from the bookies".

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