Racing must replace funds

The Victorian Government has committed to developing alternate funding arrangements that will not disadvantage the state's racing industry in the wake of sweeping changes to the gaming industry announced yesterday.

The thoroughbred code receives almost $70 million from Tabcorp's gaming profits, but the funding will end when licensing changes take effect in 2012.

The envy of other states for its gaming income, the Victorian racing industry entered into a joint venture agreement with Tabcorp when the TAB was privatised in 1994 for 25 per cent of poker machine profits. Racing Minister Rob Hulls told parliament yesterday the Government was committed to developing funding arrangements that are "no less favourable" to the racing industry.

"The announcement also provides Victoria's world-famous racing industry the opportunity really to be the master of its own destiny," Hulls said.

"The decision to fund the racing industry to the greatest possible extent from wagering will indeed provide new opportunities for an even greater racing and wagering product," Hulls said.

The $700 million wagering network will be put to tender, but the racing industry will not be able to bid for the single, exclusive licence, which is based on the existing pari-mutuel and fixed-odds betting model. An eight-week period of consultation with the racing industry begins today.

"These decisions, we believe, will give the racing industry control of its own destiny and the opportunity to work with a wagering partner which will have the racing industry as its main focus," Hulls said.

Bernard Saundry, Racing Victoria's acting chief executive, said the industry wanted to ensure it would be better off, rather than no worse off with the new arrangements.

"RVL is pleased that the Government's announcement has reaffirmed its commitment to creating funding arrangements that will be no less favourable to the Victorian racing industry than the current joint venture funding arrangements. However, it is important to note that RVL's intention is to ensure that this process sees the racing industry better off than it is today," Saundry said.

"While we have only been informed of this decision this morning, it is clear that there are serious ramifications for the racing industry that will need to be considered."

Opposition racing spokesman Denis Napthine viewed the announcement in a grave light, saying the proposed changes to gaming and wagering would cripple the racing industry.

"The Brumby Government has just devastated racing in Victoria in one fell swoop. These changes mean the multi-billion-dollar racing industry faces a very uncertain future after 2012," Napthine said.

"Without this significant revenue stream from gaming machine profits, it will be impossible for the racing industry to maintain prizemoney and marketing expenses, and it will be the death of racing as we know it."