Racing Victoria announce prizemoney reductions despite POCT increase
Racing Victoria (RV), the principal authority governing thoroughbred horse racing in Victoria, Australia, has recently declared a reduction in prizemoney for the imminent racing season.
This momentous announcement, coming on the heels of extraordinary growth in prize money and bonuses in recent years, is a strategic response to a potential $30 million funding shortfall for the upcoming season, resulting from a downturn in wagering and a delay in returns from the recent Point Of Consumption Tax (POCT) increase.
Taking a step that is being viewed as a unique response to these circumstances, RV is not merely slashing prizemoney, but also introducing a tenth race on Saturdays, in an attempt to distract local participants from the wider impact of the reductions.
This move, which will be experimented with for a period of one year starting from the new season in August, is expected to be allocated a total of $3.52 million in prize money.
RV is marketing the additional race as a potential boon for smaller stables, but the reality is that it won’t offset the reduced participant returns from the prizemoney reductions.
The general consensus in the industry is that this additional race could help boost betting turnover, thus providing a shot in the arm to RV finances.
The reduction in prizemoney will impact a range of races including high-profile ones and country benchmark 64 races.
Races such as the All Star Mile will see a drop from $5 million to $4 million in the upcoming season.
Likewise, early spring Group 1 races including the Memsie Stakes, Makybe Diva Stakes, Underwood Stakes, Moir Stakes, and Turnbull Stakes, will see prize money reduced from $1 million to $750,000.
Other races feeling the pinch of this monetary squeeze include the Moonee Valley Gold Cup, The Bart Cummings, Alister Clark Stakes, MVRC Vase, and the VRC St Leger.
The reduction will also filter down to the country premium benchmark 64 races, which will see a decrease from $37,500 to $35,000.
Midweek metropolitan races, barring the maiden races, will also witness a dip in prizemoney from $55,000 to $50,000.
Public holiday meetings will be hit as well, with prizemoney being brought down to $65,000, excluding Black Type races.
Despite these cuts, RV’s Chief Executive, Andrew Jones, underlined the fact that the total prizemoney on offer next year, which is upwards of $315 million, represents an 80% increase compared to 2015, and is $25 million more than what was available two years ago.
Emphasizing that as revenue ebbs and flows, so must expenses, Jones highlighted how Racing Victoria is endeavouring to lessen the impact of this reduced revenue on participants and owners by delivering cost savings and drawing upon the Industry Sustainability Fund.
The challenge for the industry now, Jones stated, is to return to growth in tougher economic times, which necessitates an efficient and aligned industry, along with a relentless focus on fans and punters.
There was no word from RV on what savings would be sought from burgeoning administration costs, nor the money pit that is the Racing.com media arm of RV.