Racing Victoria was in a precarious position in July, with the government increasing its Point of Consumption (POC) Tax to 15 percent.
The increased levy was part of an agreement with Victorian racing bodies and came on the back of a more than 10% decline in wagering over the previous year.
Racing Victoria responded by overhauling its race field models and appointing a new Chief Executive Officer, Andrew Morrison, to oversee the proposed changes.
The new regime starts from October 1 as Racing Victoria strives to stabilise revenue and encourage better market engagement.
Morrison will bring a new approach that addresses the changing taxation and funding scene, and changes are coming thick and fast from different angles.
A new monthly turnover and revenue calculation framework will replace the traditional greater of scheme. This new model gives bookmakers more predictable costs and revenue streams.
Race field fees on free bets will also be eliminated and is designed to rejuvenate free bet turnover, which had dropped alarmingly by 25% year-on-year. Also, there will be a unified rate for all races to simplify the fee structure.
The new model will also be adjusted to remove age-old discounts linked to the VicTAB joint venture while setting a 0.5% rate for on-course bookmakers. Additionally, a new system is set to replace the threshold discount structure.
There are also more incentives for larger players with a 50% fee discount for high-volume betting and requirements for demonstrating genuine risk for robotic betting exclusion.
Morrison is optimistic these changes will not negatively impact Racing Victoria’s finances. Instead, they are aiming for a neutral outcome while mitigating risks and encouraging more engagement.
Racing Victoria also ended their joint venture with Tabcorp, which is expected to give them more flexibility with their product fees and benefit bookmakers while restructuring the market.
The changes are designed to encourage more punters to use horse betting apps Australia to wager on the sport throughout the year.
Comparing Field Sizes and Declining Starts in the US
Australia is not the only country battling declining field sizes and number of starts per horse, with the United States (US) also experiencing a similar struggle.
According to the 2024 Jockey Club Fact Book, the average field size for thoroughbred races in 2023 was 7.40, down from 7.59 the previous year. The average size was 8.91 in 1990.
The average number of starts per horse reduced from 6.01 to 5.87 over the same time frame.
Several factors contributed to these declining numbers. Trainers Wayne Catalano and Barclay Tagg pinned the decrease on the reduction of foal crop.
Foal crop was approximately 40,333 in 1990 but has dropped to 17,200. Fewer foals results in fewer horses available to race, contributing to fewer races and smaller fields.
Todd Pletcher and Ron Ellis pinned the decrease on the newly-introduced regulations and strict restrictions on horse management, affecting starts. They both believe the new rules and limits on treatments make it hard for horses to race.
Ellis said: “The truth is, with HISA (Horseracing Integrity and Safety Act) coming in and veterinary restrictions, we can’t run the horses as often as we used to.
“All the restrictions and all the veterinary requirements, including the expensive scans we’re under now, are certainly one of the reasons. We have a lot more restrictions.”
Economic factors and management practices have not helped. Mark Casse pointed out that fewer racing opportunities and the need for strategic entries result in underutilised horses and fewer starts.
Because horse racing is no longer economically viable, there has been a faster turnover of horses, with investors refusing to pump money into their careers.
The industry has changed drastically, with new state programs and racing bodies interfering with proceedings, altering how horses train and race. These regional differences and reduced opportunities exacerbate the challenges.
Karl Broberg said: “I was looking at the Fact Book and what I was most concerned with was looking at foal crops by region. I began shaking my head. Every region is down. In the future, there’s only going to be racing in Kentucky and New York.
“It’s returning to the sport of kings. I think what’s missed due to the economics is that people are giving up on horses much quicker. That’s a huge factor. Also, there are fewer opportunities.”
