August 2009 - HRV Chairman's Letter to the Industry
Dear Stakeholders,
On behalf of the Board I present this report on the current state of the industry, including a review of the 2008/09 financial year and the challenges we face in coming years.
The 2008/09 season will be remembered as the year that the harness racing industry in Victoria finally developed its own home, Tabcorp Park in Melton. After a number of years in the planning, the acquisition of land and obtaining the necessary permits and licenses, construction finally commenced on the site in mid 2007.
In less than two years, the $45 million construction of the complex was completed on schedule and opened for business on March 5, 2009. Racing followed soon after with the opening race day on Sunday, July 5.
The opening of Tabcorp Park represents the completion of a lifelong dream and is the commencement of a new era for harness racing in Victoria. It is the culmination of a significant contribution by many parties.
The venue has been developed as the result of a strong partnership between HRV, the Shire of Melton and Tabcorp. The Shire of Melton has been very positive and supportive of the development and on behalf of the industry I sincerely thank the Shire for this once-in-a-lifetime opportunity.
The industry should also acknowledge the financial and corporate support of Tabcorp, including a $7 million naming rights package which enabled HRV to complete the project to a high standard.
The Board also acknowledges the work of a number of consultants and contractors on the project, principally:-
• WHAT Architects, who designed the building,
• The external project managers David Langdon;
• Building Contractor Kane Constructions;
• Our track design team of Wayne Edgeloe; Mike Snelgove, Graham Maher and Rob Pongho, delivering an outstanding 1040- metre racing surface;
• Track builders, Cornfoot Brothers led by Brendan Cornfoot; and
• Western Water, who have installed the pipeline for recycled water to be used at the complex.
The project, which has been a co-operative effort between the Board, senior management, staff and a team of contractors and consultants, will deliver strong economic and social benefits to the area, employing the equivalent to 70 full time jobs.
Tabcorp Park is the most significant development in the history of Harness Racing Victoria and provides the foundation for the future growth of harness racing in Victoria. It is a venue that the industry should be proud of.
While the Tabcorp Park development dominated the year, there were other capital projects funded during the year which continued the Board’s commitment to improving and upgrading tracks and facilities around Victoria.
In October 2008 the new $1.9 million grandstand at the Shepparton track was officially opened by the Minister for Racing Rob Hulls. This new facility has proved to be an enormous bonus for the Club providing an enhanced race day experience for patrons and the local community.
The Cobram track upgrade also took place in the second half of 2008. The camber on the bends has been increased from 4 percent to 12.5 percent on the revamped 1008 metre circuit at a cost of $500,000.
Similarly, the Cranbourne track underwent a $500,000 upgrade by increasing the camber on the turns to 12.5 percent and was ready for racing in February 2009.
The Board also made an announcement that the Hamilton track would be upgraded to a 1000-metre surface and that racing would resume at Hamilton in 2010. The project is to be funded jointly by Harness Racing Victoria, the Southern Grampians Shire and the Hamilton Club.
On the subject of tracks the Board also finalised a Memorandum of Understanding with the Mildura City Council to extend the Mildura Club’s lease on the Recreation Reserve for a further 10 years to 2022, thereby guaranteeing racing in the district for the long term. As part of the agreement with the Council, HRV will spend $2.5 million in upgrading the facilities and the track in 2012/13.
As a result of the successful completion of the Tabcorp Park venue and the quality of the track and facilities that have been built, HRV entered into negotiations with Moonee Valley regarding the future of that venue, despite a long term contract to race there 52 times per year.
A mutually agreeable termination of the agreement was reached, with racing at Moonee Valley to cease in February 2009. The final meeting will be on February 27 preceded by the Hunter Cup meeting on February 6.
HRV once again conducted three premier carnivals during the year:-
i. The Australasian Breeders Crown was hosted by the Bendigo Club. In total the Breeders Crown paid out over $2 million in stakes including a record $1.3 million on finals day. The Bendigo Club did an excellent job in hosting the Australasian Breeders Crown in 2008. Soon after, the Board announced that the 2009 Crown will be held at the industry’s new home Tabcorp Park, Melton on August 23, including a record nine Group One races, and a record $1.55 million in prizemoney on final’s day.
ii. The 2008 SEW Eurodrive Victoria Cup was a triumph for Victorian pacer, Melpark Major who rose to Grand Circuit prominence with his win. Unfortunately, Melpark Major suffered an injury at home which meant he sadly could not compete in the 2009 Inter Dominion at the Gold Coast.
iii. The Big6 Hunter Cup was won by the eventual Inter Dominion Champion Mr Feelgood. The 2009 Inter Dominion Trotters Final was won by Sundons Gift who went on to compete in The Elitlopp in Sweden in May.
The Gordon Rothacker Medal was once again the industry’s biggest night of the year. History was created when Bruce and Elizabeth Clarke were announced as joint Gordon Rothacker Medallists. Both have been outstanding contributors to harness racing as participants and administrators. The major Club award went to Maryborough which has been an outstanding club for a long period of time having grown the successful Redwood Carnival to one of the premier events on the harness racing calendar.
Another of the industry’s favourite events, the Pearl Kelly Awards night run by the Angelique Club, was highlighted by the winner of the Award, D’Arne Bellman.
Several of our participants were affected by the bushfires which ravaged parts of the State in early February. We were fortunate to avoid tragedy in the harness racing industry, however, there were many not so fortunate and the harness racing participants around Australia rallied together to support the HRV Bushfire Appeal. HRV was proud to be able to contribute $115,000 on behalf of the industry to the Red Cross Appeal and our thanks go to all those around the country who contributed.
The Board would like to thank its premier sponsor, Rob Merola and SEW-Eurodrive who, during the year committed, to an extended three-year deal including sponsorship of the SEW-Eurodrive Victoria Cup and signage packages at Tabcorp Park among other industry benefits.
2012 Wagering Licence
The Board has participated in the formation of the proposed Partnership Agreement between the three codes of racing and the Victorian Government to be submitted to potential wagering operators. The current pari-mutuel wagering licence held by Tabcorp expires in 2012 and the bidding process for the new licence will commence in the latter part of 2009, with a view to appointing a new licensee in 2010 for a term of 10 years from August 2012.
This is one of the most important decisions for the future of the racing industry in Victoria. The Government has chosen to separate the gaming component of industry funding and replace it with a higher rate of return from wagering. The growth in gaming has served the industry well during the current Partnership Agreement with Tabcorp, therefore there is significant risk to industry funding post 2012 by removing our share in gaming. The government has stated it is committed to a funding model which leaves the racing industry no worse off from 2012, however, the Board is concerned that the current wagering environment represents a severe threat to the prospect of the government receiving bids that will satisfy the ‘no worse off’ criteria.
Industry Funding
In addition to the uncertainty to industry funding resulting from the 2012 bidding process, there are several other key issues which the Board is keen to address in respect to industry funding.
Harness racing revenue has grown substantially over the past 15 years as a direct result of the benefits derived from the pari-mutuel wagering model. This model is now being challenged by the influx of interstate licensed operators, such as corporate bookmakers and betting exchanges.
While the Board understands and accepts the changing nature of wagering, the industry must be aware that any transfer of wagering from the pari-mutuel operator (currently Tabcorp) to any of these wagering operators represents a significant decrease in returns to the industry. It is imperative that these operators are required to pay a fair fee for the use of harness racing product and the Federal and State Governments have a responsibility to ensure this happens otherwise the funding of racing will be diminished.
Board Changes
During the year there where several changes in the composition of the Board. Neale Wheat was appointed in December 2008. Neale brings a wealth of wagering experience to the Board having been a Senior Finance Executive with Tabcorp. Resignations for the Board came from Anne Jacobson and John Doherty and I thank them for their contribution.
The Year Ahead
There are many challenges facing the industry in the coming years. It is hoped that the opening of the Tabcorp Park complex for racing will be a boost for the industry. There are 55 race meetings planned for Melton in 2009/10 and, as many of these meetings are transferred from Moonee Valley, they will prove financially beneficial for the industry.
As a result the Board is in a position to make several stake money announcements for the coming year, including:-
• a $25,000 increase in the SEW-Eurodive Victoria Cup to $375,000;
• a $50,000 increase in the Alabar Victoria Derby to $200,000;
• HRV will again run the Inter Dominion Trotting Championship during the Sky Racing Nights Of Glory with a grand final stake of $250,000; and
• an announcement of increases in HRV funding for pacers and trotters Country Cups, meaning that HRV contributions to these events exceeds $1 million for the first time.
We look forward to the year ahead being a successful one for the industry.
Neil Busse
Chairman
