Submission to the review of the NSW Thoroughbred Racing Act
Introduction
Racing Reform Group NSW is a newly established organisation dedicated to helping ensure the sustainability of the NSW Thoroughbred industry at this critical juncture in its future. Its supporters come from every facet of the industry and its steering committee brings a vast amount of experience across racing administration, horse ownership and breeding to best address this opportunity and challenge. In developing this submission, we consulted widely with our industry colleagues. For more details on the group please visit reformnswracing.org
The Thoroughbred Racing Act 1996 established Racing NSW’s predecessor as an independent statutory body and it took over the regulatory responsibilities from the then principal racing club in NSW, The Australian Jockey Club.
It is important to acknowledge that since then the regulator has made a highly significant contribution to the industry’s success. The thoroughbred industry in NSW is a world leader. It supports 28,000 full time jobs, our races are followed globally and our major breeding sector, centred in the Hunter Valley, produces many of the world’s best race horses.
In particular, Racing NSW has made advances in overseeing the integrity of racing and driving significant improvements in equine welfare, although as our submission asserts, we believe there is considerable room for this review to drive better outcomes. Racing NSW also played a pivotal role introducing race fields legislation, which has enabled the industry to benefit significantly from the rise in online and fixed odds wagering. Similarly, they convinced the state government to harmonise wagering taxation with Victoria, leading to an increase in revenues for the industry.
This group believes firmly that the Act should preserve Racing NSW’s regulatory powers and responsibilities, but we are very concerned that its melding of commercial control, together with its regulatory responsibilities, has created the same structural imbalance that the Act was originally designed to address. Only this time, it is Racing NSW who wields too much power, to the industry’s detriment. There is also a lack of transparency and accountability to industry stakeholders, which we seek to highlight in this submission.
The Select Committee Inquiry into the proposal to develop Rosehill Racecourse noted the deep concerns of industry stakeholders about this structural imbalance and current governance practices and unanimously recommended to the NSW Government that there be a “thorough review” of the Act.
It is disappointing therefore that two critical elements have been excluded from this review’s terms of reference, the funding model of racing and the relationship between Racing NSW and the state government. That is why we launched a Parliamentary petition to ask that this committee’s terms of reference be widened to allow it carry out a “thorough review” of the Act.
Nevertheless, we very much welcome this review because it still has significant potential to make recommendations to set up much stronger, clearer governance principles and put forward measures to reform the Act so as to deliver better accountability and transparency by the regulator to the industry’s stakeholders and all who love thoroughbred racing in this state.
Executive Summary
The following are our specific recommendations, in line with the Review’s Terms of Reference, which we ask to be considered:
Governance Recommendations
The Act currently has no objectives for Racing NSW, instead being a document that gives the organisation a set of powers. A clear set of objectives, developed via consultation with industry, should be inserted into the Act.
While acknowledging the review cannot (at present) consider the role of Racing NSW as a body corporate independent of government, the review should recommend the development of a statement of ministerial expectations for the board and governance of Racing NSW. Such statements apply to other statutory authorities and could provide the board with strong direction on areas such as transparent consultation, treatment of participants and stakeholders, and fulfilment of obligations of the Act, such as industry consultation.
To ensure the integrity and governance functions of Racing NSW are aligned with community expectations, as well as changes in wagering and the Thoroughbred industry, the Act should be reviewed at least every five years.
In order to bring regeneration and renewal to the board, the term limits for directors of Racing NSW should return to a maximum of eight years.
To make the board more accountable to the industry, the selection panel that makes recommendations for board appointments to the minister should include people with significant industry experience.
A skills matrix for the board of Racing NSW should be developed and published, covering areas such as commercial acumen, racing knowledge, wagering, welfare, infrastructure, risk, technology and stakeholder engagement.
In the event of a casual vacancy emerging on the board of Racing NSW, a selection panel with industry stakeholders should be convened to make recommendations to the minister (currently Racing NSW draws up a shortlist).
In accordance with governance best practice, the Act should state that there must be an independent annual review of Board performance. The Act should also stipulate that no executive can leave their position at Racing NSW and then join the board as a non-executive member for a period of at least five years.
Racing NSW should publish a Delegations Authority that sets out a decision-making framework. This would demonstrate which matters are board decisions and which have been delegated to the executive.
In order to increase confidence in the organisation, especially considering the significant revenue and reserves of the regulator, any necessary change to the powers of the NSW Auditor General should be made, to allow it to audit the accounts of Racing NSW.
Racing NSW should be a body that is subject to the purview of the Independent Commission Against Corruption (ICAC).
Integrity Recommendations
The integrity functions of the regulator need to be clearly distinct, separate and independent of its commercial functions and should report separately to the Racing NSW Board.
Oversight of the integrity functions of Racing NSW are currently provided by an Integrity Assurance Committee. At the Rosehill inquiry it was revealed this body had not investigated a complaint in three years.
This body needs to be completely reconstituted and made independent of the executive of Racing NSW. It should publicly report its activities each year, including number of complaints, number of investigations and findings.
The Act should stipulate specific limitations on how Racing NSW can use its funding and intervention powers over clubs. It should specifically prevent the regulator seeking financial or commercial advantage over clubs through its control of the distribution of industry funds. Any conditions for funding should be restricted only to specified integrity, participant safety or animal welfare thresholds.
Accountability and Transparency Recommendations
The provisions for ensuring adequate consultation with the industry need to be strengthened. This can be achieved by:
Creating sanctions for failure to adhere to the Act when it requires the CEO and chair to attend RICG meetings. If the Chair cannot attend, another non-executive member of the Racing NSW board should attend RICG meetings
Requests or proposals put to Racing NSW from the RICG should be formally responded to by the board of Racing NSW. These requests should be considered by the board, rather than only the executive. These requests and responses should be available to industry participants.
The minutes of RICG meetings should be made available to all industry participants within 5 working days of meetings.
In the absence of an annual general meeting, there should be at least one forum annually where industry participants can attend and ask questions of the board of Racing NSW.
Racing NSW must meet its obligations to develop a strategic plan every three years in consultation with industry stakeholders and then report against this plan in each of its annual report. A failure to do so should see the Directors’ subject to sanctions.
To improve transparency, Racing NSW should be required to provide a detailed breakdown of wagering income in their annual report. At present revenue from race fields, TAB and point of consumption tax is presented together.
Racing NSW should provide transparent information on what payments – including ‘top ups’, capital funding and other grants – that it provides to all clubs.
Racing NSW should include a list of all property they have purchased in the past 12 months in their annual report and rationale for purchase.
The Act should be amended to make clear that Racing NSW needs to provide the parliament with responses to Standing Order 52 requests (these are requests for information that are supported by a majority of members in the Legislative Council).
Racing NSW is a body that comes under the purview of the Government Information Public Access Act (GIPA). To aid transparency it should, like other statutory authorities, create a disclosure log and publicly report on its responses and the time it takes to respond to GIPA applications.
Equine and Participant Welfare Recommendations
In order to reflect the importance of animal welfare and participant safety, the Act should be amended to set those out as formal objects and specify reporting requirements and measurable targets to maintain the confidence of the general public and industry participants. For example, Racing NSW could be required to publish transparent information on equine welfare and participant safety every six months. This report should include:
Details of any significant participant injuries or deaths during the period and updates on procedures and recommendations to ensure best practice approach to participant and spectator safety
Equine injury and fatality rates
Details on equine welfare expenditure
Information on the number of horses in the care of Racing NSW’s rehoming and retirement properties
An analysis of horses being retired annually, with details on where they have been rehomed
In the absence of national welfare guidelines, Racing NSW should develop equine standards and guidelines that meet contemporary standards. These should be created in consultation with welfare experts, veterinarians and the industry. They need to be clearly communicated and understood by industry participants.
In the interests of improving workplace safety, clear obligations should be placed on Racing NSW. The Act should be amended in order that:
A. promoting high standards of participant health and safety is an express object of the Act, aligned with NSW WHS law,
B. Racing NSW has a defined function to lead industry-wide WHS programs (prevention, data collection, support for clubs and license holders) rather than only managing claims,
C. a dedicated, transparent WHS and participant safety fund is established and reported on annually,
D. Racing NSW must publish a three-year Participant Health and Safety Strategy and report each year on incidents, WHS projects, expenditure and outcomes, subject to independent audit, and
E. if RNSW is entrusted with industry funds and regulatory powers, it should also be clearly required to use those tools to make racing a safer workplace, not just to respond after injuries occur.
Sustainability Recommendations
The Act should define the principles for the distribution of wagering and tax revenue and define the limits for Racing NSW building reserves. In the event of an unresolvable dispute on funding operations, the Auditor General, or similarly qualified entity, e.g. industry Ombudsman should be created and assigned a resolution role.
Racing NSW should be required to provide clubs with detailed information about wagering on their meetings, including the revenue generated from overseas wagering and the resulting income. 8
To support the sustainability and viability of country racing, Racing NSW should re-establish regional offices. These would provide administrative support to country clubs.
Racing NSW must develop a clear and transparent mechanism to allow clubs to apply for funding. Applications and the reasons for their success or failure in attracting funding should be available to industry.
Racing NSW must report annually on its initiatives to build workforce capacity. This report should include courses it offers (it is a registered training organisation), numbers of enrolments and numbers of students who complete courses and then remain within industry.
The Review should recommend an immediate prioritisation of funding of dedicated training centres outside metropolitan Sydney and annual updates in NSW annual reports on progress.
The statement of ministerial expectations should require Racing NSW to demonstrate it engages in good-faith discussions with other states on matters of national significance, 9
Governance
The role and functions of Racing NSW have grown significantly since the Thoroughbred Racing Act was introduced in 1996, while that Act has also been amended in ways that has made its powers greater and accountability to the industry much weaker.
Many in the Thoroughbred Racing Industry are of the view that the Act is unnecessarily vague and does not allow the Minister to appropriately interrogate the regulator. resulting in no mechanism for oversight and accountability
For example, RRG believes (the more recent) Greyhound Racing Act 2017 is better aligned to modern governance standards, in terms of setting out clear objects for the Act and allowing the Minister to give directions to the regulator (Greyhound Welfare and Integrity Commission), if and when that direction is consistent with the public interest. Similar changes could be introduced to the Thoroughbred Racing Act to provide more clarity, without altering the independence of Racing NSW from the NSW Government.
Specific governance concerns with the operation of Racing NSW are:
Combination of regulatory power and commercial control
It is evident to most industry participants that the Act has facilitated Racing NSW’s ability to combine regulatory authority and commercial control in a manner that was never contemplated by the legislators.
Racing NSW, as both the regulator and distributor of virtually all industry funding, can and does attach conditions to funding that go well beyond what is needed for guarantees of integrity or safety but rather increases Racing NSW commercial control over racing clubs.
For example as noted in the ‘Save Rosehill’ group’s submission to the Select Committee Inquiry into the proposed development of Rosehill in recent years, Racing NSW has acquired (at least) three regional and and country racetracks in Goulburn, Scone and Cessnock. In each of these cases, the sale of these clubs’ primary asset was linked to or contingent upon the release of funding for training and/or stabling facilities by Racing NSW.
In the case of Goulburn, Racing NSW CEO told the Goulburn Post: “Ownership of the land is of no benefit to the club if there is no intention to ever sell it. In fact, retaining ownership…is poor use of the club’s capital assets as construction of stabling through this funding provides the club an opportunity to generate significant recurring revenues.”
As the Save Rosehill submission noted and we agree:
“The sale of a racetrack – a racing club’s home and heritage, and often its only significant asset – to the regulator, versus the release of funds for vital infrastructure development should not be a binary choice for clubs. However, that is now Racing NSW’s established pattern of behaviour. So, it comes as no surprise to us that Racing NSW has stated it is supportive of the sale of Rosehill Gardens, if it controls the process and the funding that results from its sale.
“The creation of Racing NSW to replace the Principal Club as the regulator was intended to determine and control funding priorities for the benefit of the racing community as a whole, and improve the administration of matters and affect the integrity and welfare of the sport.
“However, we believe that the way in which Racing NSW is exercising its mandate – as an asset owner and sporting administrator, rather than a regulator – risks creating a mendicant thoroughbred industry, which is inconsistent with the intention of the Thoroughbred Racing Act. The expanded commercial ambitions of Racing NSW bring inherent conflicts with its regulatory functions.
Racing NSW introduced commercial restrictions on the use of the new Winx stand that, we believe unnecessarily, limited the ATC’s operation of the new stand, to its significant financial disadvantage.
And earlier this year Racing NSW and the ATC were reportedly “at odds” (SMH October 17) following a lengthy and challenging negotiation over the contract terms for an area at Randwick racecourse that became known as Base Camp.
Racing NSW were keen to take control of this site – situated after the winning post – to build a facility for corporate partners. Developing such a site is the sole responsibility of the hosting club (rather than racing authority) in every other racing jurisdiction in Australia.
Shortly after agreeing the deal to take over the site for the Base Camp, Racing NSW issued the ATC a show cause notice, demanding the club explain why it shouldn’t be placed into administration due to poor financial and commercial management, as well as poor governance. Many in the industry questioned how Racing NSW could be involved in such significant commercial negotiations with a club, while also having the power to remove that club’s board. The power imbalance means the commercial negotiation cannot be conducted on a level playing field.
The influence Racing NSW has over clubs goes beyond funding and licensing. Since 2023 Racing NSW has demanded to be involved in the selection process for all CEOs for race clubs, with all appointments to be signed off by the Racing NSW CEO. Again, this level of involvement does not happen under any other principal racing authority.
Additionally, any club that receives $1 million or more in funding from the regulator is required to restructure its board and include a minimum of two directors who are appointed by Racing NSW.
Unlike NSW, the regulatory and commercial functions for thoroughbred racing in Queensland and New Zealand are run separately, similar to the structures created for greyhound racing by the NSW Greyhound Racing Act 2017.
The regulatory and commercial powers of Racing Victoria are combined, but in that state industry membership of Racing Victoria mitigates against the risk of a major power imbalance in that jurisdiction.
The membership of Racing Victoria comprises: Country Racing Victoria, Melbourne Racing Club, Moonee Valley Racing Club and Victoria Racing Club.
Industry body members include Australian Jumping Racing Association, Australian Trainers Association Victorian Branch), Thoroughbred Racehorse Owners Association, Victorian Bookmakers Association, Victorian Jockeys Association, as well as relevant union representation. These organisations are all shareholders in Racing Victoria.
While stewards are employed by Racing Victoria, there is a separate Racing Integrity Board, which has oversight of the performance of the integrity departments of the state’s Thoroughbred, greyhound and harness racing authorities. It also reviews integrity spending, changes to rules and can receive complaints from officials. Victoria also has a Racing Integrity Commissioner, responsible to the Minister, which can investigate matters relating to the integrity and administration of racing (including complaints referred by the Racing Integrity Board). This framework is very different to the Integrity Assurance Committee that is a creature of Racing NSW (as noted in this Review’s discussion paper) and appears to be non-functioning (this is discussed further in the integrity section of this submission).
On balance, we believe amending the Thoroughbred Racing Act, to separate out the regulatory and commercial powers of Racing NSW (as per the NSW Greyhound Racing Act) is the most thorough remedy to the current power imbalance, which is a major inhibitor to the industry’s sustainability, particularly in regional and country NSW, as we discuss later in this submission. Irrespective of the precise remedy, the maintenance of the status quo is not a justifiable option.
Lack of Accountability:
When the Thoroughbred Act was first introduced, it made clear that Racing NSW would be independent of the state government, but the directors of its board would be accountable to the industry, with stakeholders given direct control of the appointments to the board. But now the Minister for Racing chooses the selection panel and board, with little formal input from the industry and via a very opaque process.
Indeed, Racing NSW’s wholly inadequate response to the inquiry into the proposed redevelopment of Rosehill and the subsequent Privileges Committee report into a Possible contempt arising from the Select Committee on the Proposal to develop Rosehill Racecourse raised serious concerns that the Board of Racing NSW simply does not see itself as accountable to the industry it was set up to serve.
This is directly from the Chairman Stephen Lawrence’s Forward in the Privileges Committee report into a possible contempt by Racing NSW.
“In the course of the Select Committee inquiry, allegations were aired about impropriety and poor workplace culture at Racing NSW, based on confidential evidence to that committee. In response, senior Racing NSW personnel wrote to the Select Committee suggesting that former staff were engaged in a campaign to make submissions critical of the organisation. In its letters, Racing NSW provided details of former staff it believed were behind criticisms of the organisation. Due to adverse reflections on individuals in those letters, the Select Committee kept them confidential. Nevertheless, the Select Committee considered that Racing NSW’s actions could be interpreted as an attempt to interfere with inquiry participants. The Select Committee outlined its concerns in a special report, which recommended the matter be referred to the Privileges Committee to consider whether Racing NSW’s actions amounted to a contempt of Parliament. This committee has carefully considered two questions: first, whether the actions of Racing NSW constituted interference with witnesses; and second whether the actions amount to contempt. On the first question, this committee has serious concerns that Racing NSW has engaged in conduct that may have had the effect of deterring potential inquiry witnesses from coming forward to give evidence for fear of reprisals – the so-called ‘chilling effect’. On the second question, the committee did not consider that the threshold for contempt was met, primarily due to lack of conclusive evidence, and the limited impact of Racing NSW’s actions on the Select Committee’s ability to report on its terms of reference. While not finding contempt in this instance, this committee is concerned by the conduct of Racing NSW in a number of respects, particularly its deeply personal depictions of third-party individuals. It considers that it is highly unusual for an organisation to take such steps in respect of former employees, and reflects poorly on Racing NSW as an organisation. This committee has concerns about the potential for such behaviour, if repeated, to deter potential witnesses from coming forward to any future inquiry for fear of being targeted for adverse treatment.”
This ‘chilling effect’ expands well beyond former Racing NSW employees and is well understood and commented upon. Yet, we cannot find any evidence that the Board of Racing NSW has made any attempt to engage with industry to understand the extent to which this ‘chilling effect’ is in place or how deeply it may characterise its relationship with industry participants. It has a pattern of characterising genuine concerns held by many current industry participants about its role and behaviour as that of isolated miscreants. For example, in his opening remarks to the Select Committee examining the development of Rosehill, the CEO said this:
“Yes. I’d like to make an opening statement. Firstly, thank you for allowing us to appear today. I should say from the outset that Racing NSW is a regulator. One of our main roles is to get rid of the cheats and the undesirables, especially the ones that are cruel to horses. I’m aware that some of them are using this inquiry to undermine racing in New South Wales.”
No evidence was provided to the Committee to support this assertion.
Similarly, In relation to Racing NSW’s response to the Privileges Committee’s findings, this is the only public response we can find, attributed to a ‘spokesperson’, as reported by the Sydney Morning Herald and Australian Financial Review, which seems to ignore the Privileges Committee’s serious (and unanimous) concerns about Racing NSW’s behaviour:
“Racing NSW wishes to again reiterate that it has the greatest of respect for the NSW Parliament and the privileges committee. Accordingly, it is pleased that the privileges committee has found that no action should be taken against it.”
“Unsubstantiated aspersions were made about Racing NSW by disgruntled ex-employees and disqualified participants. Naturally, Racing NSW believes that we should have been provided due process and natural justice to show that these claims and aspersions were false and without substance.”
“Racing NSW doesn’t understand how one party can make unsubstantiated aspersions without the other party being given the opportunity to show that they were complete fabrications. That is all that Racing NSW did.”
Again, no evidence to support this assertion. However, this characterisation of Racing NSW critics does serve to distract attention from the fact that many industry participants, past and present, have serious and genuine concerns that Racing NSW should be answerable for. It represents an extraordinary attitude for a regulatory body to take.
In the absence of a review of the provisions of the Act that establish Racing NSW as a body corporate that is independent of government, changing the Act to include a statement of ministerial expectations for the board and governance of Racing NSW – identical or similar to that in the Greyhound Racing Act – would allow the Minister to provide the board with at least some direction on areas such as fair treatment of industry participants, which is also entirely consistent with the public interest.
Board composition and terms:
As well as changing how board members were appointed, the Act has twice been amended to allow directors to remain much longer than typical governance practice would allow. The original maximum term was eight years (two four year terms), but it was increased to 10 and then 12 years. In fact, in 2023 the state Government sought to increase the term of then Racing NSW chairman, Russell Balding, to 14 years. These significantly longer terms are out of step with other statutory authorities and especially for a regulatory authority that is effectively unaccountable to either the Minister or its industry stakeholders.
Current Racing NSW director, Garry Charny, criticised the make-up of the board at the Rosehill Inquiry. Asked to explain a meeting he attended with the Premier in July 2023 to discuss Racing NSW, he stated: “The purpose of that meeting was to impress upon the Premier… that board renewal was important, that the gender balance on the board was hopelessly inadequate, and remains hopelessly inadequate, and that there were insufficient younger members coming through, so there was no real succession. Basically, you know, the board was old, male, stale and white.”
The Act requires that the Minister establishes a selection panel to make recommendations to him for the appointment of Racing NSW Board members. There is no requirement for the Minister to consult with industry by having formal representation from recognised industry groups on the selection panel. Indeed, RRG understands that the Minister has currently convened a selection panel to advise on new Board appointments. However, the composition of that panel remains a mystery to industry participants.
The Act should be amended to require that the Selection Panel include representatives of major industry groups (for example, those currently comprising the Racing Industry Consultation Group) and suitably qualified expert independent members and that its selection criteria should be transparent. For example, the Selection Panel should be required to publish a skills matrix for the composition of the Racing NSW Board. It should include a deep knowledge of racing and breeding as well as the director specific skills and personal qualities required for sound Board governance.
In Victoria the Minister for Racing sets up a selection panel with an independent chair, but the panel includes a minimum of two representatives from industry stakeholder groups.
Term limits for directors should be returned to a maximum of two terms each of four years. While term limits for NSW statutory authorities vary, this proposal is consistent with the norm. For example, board appointments to the Port Authority of NSW are usually for three years, with a maximum of two terms. Directors to Greyhound Racing Board cannot serve for more than nine years in total.
Board performance reviews
The Australian Institute of Company Directors (AICD) promotes independent, structured, annual board performance reviews as crucial for improving governance, strategy alignment, and decision-making, moving beyond simple ‘tick-box’ exercises. The review could recommend incorporating such a provision in the Act.
Prohibitions on CEOs becoming non-executive directors
Organisations like The Australian Institute of Company Directors note significant governance concerns can arise if a CEO is subsequently appointed as a non-executive director of the same organisation.
These include the potential for confusion and a lack of clarity on who is in charge, potentially hindering a new CEO’s ability to establish their own leadership style. A former CEO’s presence may also limit the new CEO’s autonomy and ability to make tough decisions, such as terminating underperforming employees or significantly amending or ending projects initiated by the former CEO. It also sends the wrong message, i.e. that the former CEO controls the succession process.
For all these reasons, it is extremely rare for a CEO (or other senior executive) to step into a non-executive Board role in the same organisation, at least until a considerable period of time has elapsed. It is recommended that a departing CEO immediately step off the Board to allow the new CEO to fully discharge their responsibilities without any interference.
The Act is silent on this matter and should be amended to ensure that executives of Racing NSW cannot become non-executive directors for a minimum period of five years after their executive employment ends.
Lack of financial scrutiny
Additionally, the accounts of Racing NSW are not subject to scrutiny by the NSW Auditor General, unlike other statutory authorities. This issue was raised by former NSW Auditor General, Tony Harris, in a submission to the Rosehill Inquiry Mr Harris suggested Racing NSW’s use of provisions in their accounts may not comply with accounting standards and that there was a need for the organisation to have similar oversight to other state-created entities.
During the debate into the Government’s proposal to extend the term of Racing NSW Chair by another two years, the NSW Opposition proposed amendments to “strengthen the probity, governance and oversight of Racing NSW”. One of those amendments sought to make the financial reports and statements of Racing NSW subject to the Auditor General. The effect of that amendment would have made Racing NSW an auditable entity under the Government Sector Audit Act 1983 and the chief executive of Racing NSW the accountable authority for Racing NSW.
Given the significant revenue and reserves that Racing NSW manages on behalf of the industry, we believe this oversight would enhance confidence in the regulator.
We believe the above change can be achieved without any change to the Racing Act or change to the fundamental relationship between Racing NSW and the Government, so such a recommendation by this review may be consistent with its restricted terms of reference.
Better safeguards against corruption
Since its inception and significant changes to the betting and taxation regimes, Racing NSW has become an immensely rich organisation, with revenue in excess of $410 million, with no real accountability to either government or its industry stakeholders.
The Independent Commission Against Corruption Act 1998 should be amended, specifically to bring the NSW racing regulator under its purview. We believe that recommending this change to the ICAC Act is also consistent with the Review’s restricted terms of reference.
Further reviews of the Thoroughbred Racing Act
As noted in the introduction, contrary to the recommendations of the Select Committee into the proposal of Rosehill, the scope of this review does not include:
● provisions of the Act that establish Racing NSW as a body corporate that is independent of government (Sections 4 and 5)
● provisions of the Act that relate to thoroughbred racing industry funding arrangements (such as the totalizator distribution arrangements in Division 3 of Part 2A).
As noted in the introduction (and because of the issues highlighted in this submission regarding significant concerns about industry funding arrangements and governance shortcomings on the part of the regulator) we urge this review to recommend to the government that these matters be examined immediately by a suitably qualified independent reviewer.
Thereafter, we recommend a mandatory review of the Act every five years, as was specified in the original Act. This frequency is consistent with other Acts that specify a review period, usually upwards of three years, which is the frequency specified for the Greyhound Racing Act.
Governance Recommendations
The Act currently has no objectives for Racing NSW, instead being a document that gives the organisation a set of powers. A clear set of objectives, developed via consultation with industry, should be inserted into the Act.
While acknowledging the review cannot (at present) consider the role of Racing NSW as a body corporate independent of government, the review should recommend the development of a statement of ministerial expectations for the board and governance of Racing NSW. Such statements apply to other statutory authorities and could provide the board with strong direction on areas such as transparent consultation, treatment of participants and stakeholders, and fulfilment of obligations of the Act, such as industry consultation.
To ensure the integrity and governance functions of Racing NSW are aligned with community expectations, as well as changes in wagering and the Thoroughbred industry, the Act should be reviewed at least every five years.
In order to bring regeneration and renewal to the board, the term limits for directors of Racing NSW should return to a maximum of eight years.
To make the board more accountable to the industry, the selection panel that makes recommendations for board appointments to the minister should include people with significant industry experience.
A skills matrix for the board of Racing NSW should be developed and published, covering areas such as commercial acumen, racing knowledge, wagering, welfare, infrastructure, risk, technology and stakeholder engagement.
In the event of a casual vacancy emerging on the board of Racing NSW, a selection panel with industry stakeholders should be convened to make recommendations to the minister (currently Racing NSW draws up a shortlist).
In accordance with governance best practice, the Act should state that there must be an independent annual review of Board performance. The Act should also stipulate that no executive can leave their position at Racing NSW and then join the board as a non-executive member for a period of at least five years.
Racing NSW should publish a Delegations Authority that sets out a decision-making framework. This would demonstrate which matters are board decisions and which have been delegated to the executive.
In order to increase confidence in the organisation, especially considering the significant revenue and reserves of the regulator, any necessary change to the powers of the NSW Auditor General should be made, to allow it to audit the accounts of Racing NSW.
Racing NSW should be a body that is subject to the purview of the Independent Commission Against Corruption (ICAC).
Integrity
The maintenance of a successful and sustainable Thoroughbred industry is dependent upon confidence in the integrity of racing and its administration.
It is this confidence that enables punters to bet on racing in the belief there will be a fair outcome; equally that creates an environment where owners invest significant sums in buying racehorses and their ongoing costs; this confidence is also important for participants, such as trainers, breeders and jockeys to build their businesses and their careers within NSW.
The view of the RRG is shared by that of Racing NSW chair Dr Saranne Cooke. While giving evidence at the Rosehill Inquiry, she stated: “If we don’t have a fair playing field with an appropriate system of rules, and if we don’t look after our elite athletes, people will not place a bet, invest in a racehorse or attend a race meeting in the city or the bush, and we will not have an industry.”
It is worth noting that Racing NSW and its Stewards are granted significant powers under the Act: as well as regulating events on race days, from drug testing through to equine welfare, they have significant authority to investigative matters and to also issue penalties. Racing NSW can, in effect, close a person’s business or effectively end their career. The regulator can also issue ‘show cause’ notices against individuals or clubs, seeking a response to a concern with the threat of removing an individual or club’s license to operate.
It is worth noting that the stewards’ possess wide ranging search powers against registered persons, without the requirement for a warrant or other judicial supervision – an extraordinary power.
When racing stakeholders petitioned the Fahey government to establish the review of racing regulation that was ultimately carried out by Ian Temby in 1995, a strong motivation behind these calls for reform was the perceived need to separate the integrity functions of racing regulation from the commercial activities of the Australian Jockey Club.
These calls followed changes in the United Kingdom, when in 1993 the British Horseracing Board was established, taking over the regulatory and integrity functions from the Jockey Club, the aristocratic body that had run racing for more than two centuries.
This trend to separate the commercial and integrity functions has continued across Australasia. In recent years new integrity frameworks have been established in Queensland and Tasmania, while a new integrity body was also set up in New Zealand for thoroughbred racing industry.
The Queensland Racing Integrity Commission, a body that is completely separate to Racing Queensland, was established in 2016 and reports to the Minister. It is responsible for stewarding, drug testing, animal welfare, and can conduct inquiries into clubs and administrators.
There are some in the Queensland industry that have criticised the performance of QRIC, but the RRG understands such criticisms have focused on the personnel and capability of those involved in the organisation, rather than the structure of the integrity framework and division of responsibilities.
At the end of last year, the Tasmanian government introduced the Racing Regulation and Integrity Act, which created the role of an Integrity Commissioner. While not in charge of day-to-day stewarding, this role, which is accountable to the Minister for Racing, has extensive powers to monitor and conduct inquiries into the administration and regulation of racing, while ensuring welfare and integrity processes meet contemporary standards.
This newly created role is similar in its functions to that of the Victorian Racing Integrity Commissioner, a position established in 2010 and which is tasked, along with the Victorian Racing Integrity Board, with providing oversight to the integrity functions of all three racing codes (it is worth noting that TasRacing and Racing Queensland both also oversee three codes).
In NSW the integrity functions for Thoroughbred racing are retained by Racing NSW without an independent oversight body. Furthermore, there is no clear separation of the integrity functions of Racing NSW from its commercial responsibilities, nor a clear division of responsibility at executive level.
During the Rosehill Parliamentary Inquiry, questions were raised on a number of occasions about the roles and responsibilities relating to its integrity functions.
In his evidence, the Racing NSW CEO said that he did not involve himself in stewards’ inquiries. However, in response to written supplementary questions, Mr V’landys stated: “I have the delegation of the Board of Racing NSW in respect of all integrity, licensing and disciplinary matters.”
This was confirmed by Dr Cooke when she responded to a question about the CEO’s involvement in stewarding matters at the Rosehill Inquiry, stating: “The correct answer to that is that technically he can (involve himself) if he wants. The stewards and the integrity department report through to him. He chooses—and the board is fully aware of this—not to involve himself because he wants it done at arms-length. He wants it done independently at a distance. We support that— it doesn’t mean that he can’t step in at any time.”
To many in the racing industry, including some on the Steering Committee of the RRG, the information that the CEO had been delegated all authority in integrity, licensing and disciplinary matters was the first time this had been publicly revealed.
Details about the workings of the Integrity Assurance Committee (IAC), the body established in the Act to oversee the integrity functions of Racing NSW, were also made public in the Rosehill Inquiry. Dr Cooke stated the IAC had met just once in the previous three years and, in that time period, had not investigated a single complaint.
Given the importance of the oversight responsibilities of the IAC it is concerning to the RRG that this body has received and reviewed so few complaints or queries. Rather than being seen as a positive that there has been little need for oversight, the RRG believes this is evidence there needs to be significant change in the integrity functions.
There are legitimate concerns the current structure may lead to a perception that integrity matters may be cross-contaminated by the other functions and responsibilities of Racing NSW. This perceived conflict is potentially damaging to the regulator.
To improve the confidence of the industry in this area and to protect the reputations of those involved at the executive level at Racing NSW – including whoever is the incumbent CEO – the RRG believes there needs to be separation between commercial and integrity functions, as well as a clear and transparent demarcation of roles and responsibilities in relation to disciplinary, integrity and licensing matters.
These issues were given careful consideration by Justice McHugh when he conducted his review of the NSW greyhound industry.
His report stated: “The Commission considers that the integrity of the industry can only be maintained if there is a formal separation of the commercial functions of Greyhound Racing New South Wales (“GRNSW”) from its regulatory functions. The combination of those functions has not worked and it will not work moving forward. There is no reasonable alternative model.
As a result of McHugh’s work, the NSW Greyhound Welfare & Integrity Commission (GWIC) was established. This body, which is answerable to the Racing Minister, now has broad functions that encompass welfare and integrity. This is similar to the role carried out by QRIC and NZ’s Racing Integrity Board.
While these bodies have wide-ranging powers, another common requirement of them is that they all have detailed and extensive reporting requirements placed upon them, in order to aid transparency and accountability.
The RRG believes that more transparency around integrity matters, including roles, responsibilities and performance, can only enhance confidence in the Thoroughbred industry in the state.
Clearly, with the advent of GWIC, the regulation of greyhound integrity and welfare in NSW is now being conducted under a very different system than exists in the Thoroughbred industry. Funding for such a body would need examining and the greyhound and QLD experiences may provide good models.
GWIC may provide a template for Thoroughbred racing – certainly the merits put forward by McHugh in his report make it worthy of consideration – but, whether a GRIC for horseracing is for the best or not, the continuation of the current model is not sustainable, nor in the best interests of thoroughbred racing in NSW.
The view of the RRG is the regulatory and commercial functions currently held by Racing NSW need to be separated and, additionally, there needs to be effective independent oversight of these integrity functions.
Integrity Recommendations
The integrity functions of the regulator need to be clearly distinct, separate and independent of its commercial functions and should report separately to the Racing NSW Board.
Oversight of the integrity functions of Racing NSW are currently provided by an Integrity Assurance Committee. At the Rosehill inquiry it was revealed this body had not investigated a complaint in three years.
This body needs to be completely reconstituted and made independent of the executive of Racing NSW. It should publicly report its activities each year, including number of complaints, number of investigations and findings.
The Act should stipulate specific limitations on how Racing NSW can use its funding and intervention powers over clubs. It should specifically prevent the regulator seeking financial or commercial advantage over clubs through its control of the distribution of industry funds. Any conditions for funding should be restricted only to specified integrity, participant safety or animal welfare thresholds.
Accountability and Transparency
The Racing Act envisions the Racing Industry Consultation Group as a central cog in accountability and transparency by the regulator to the industry. It is clearly a broken model.
The Racing Act requires either the Racing NSW Chair or CEO to attend each RICG meeting. In fact, RICG members tell us that the current Chair has never attended a meeting and the CEO has attended only one meeting in each of the last two years. Despite the clear requirement of the Act, this responsibility has been largely delegated to Racing NSW’s COO. The Racing NSW 2024 annual report noted RICG met quarterly and the 2025 annual report is silent on its frequency (the act recommends RICG convenes 12 times a year but that frequency can be varied by agreement between RICG members and Racing NSW).
RICG members note that there is nothing to compel Racing NSW to explain its decisions or to demonstrate that industry stakeholders’ input has also been taken into account at RICG meetings. Written submissions by RICG members to Racing NSW about what they regard as critical industry issues regularly go unanswered.
There is no requirement in the Act for Racing NSW to hold any other forum, annual general meetings or publish minutes of meetings that discuss industry participants’ concerns and report on measures the regulator is taking to address them.
There have been clear shifts in strategy by Racing NSW, which have not been explained or discussed in Strategic Plans by the regulator. For example, starting with The Everest in 2015, there has been a focus on creating new feature races to be run for very significant prizemoney levels. Similarly, Racing NSW also began acquiring significant property holdings from 2017, with little or no discussion with industry. Both these new strategic initiatives came as the wagering revenue received by Racing NSW from corporate bookmakers was soaring.
But these initiatives were not universally supported, even by those who benefited from them. As leading Sydney trainer Bjorn Baker noted in his submission to the Rosehill inquiry:
“It is of concern to hear that the Chairman of the Australian Turf Club, Peter McGauran, state the club are struggling to afford to maintain the current facilities; with Mr McGauran having told a recent meeting that $12 million should be spent annually on this task, but the ATC can only afford $4 million. This admission comes despite the significant sums that are available in prizemoney: the ATC’s five most valuable races are worth a combined $45 million. While I have been the beneficiary of such prizemoney, I and others would contend that some races have prizemoney that is beyond their standing. For example, the Golden Eagle is worth $10 million and the Big Dance $3 million (this is the sixth most valuable race held at the ATC). If these races were worth less, I contend they would still attract the same quality of racehorses in the field. I was fortunate to have four runners in the field of the Big Dance in 2023 (and will certainly try to qualify more horses this year), but the field was far from top class and I am sure there would have been similar quality, and the same excitement amongst owners, if the race had been held for $1 million. As a trainer in Sydney the prizemoney on offer has been a great benefit but the facilities available to trainers in Sydney are substandard. The Rosehill boxes and training precinct are the most modern, largest and well managed stables in Sydney. The stabling is of huge importance to the health and wellbeing of the horses and modern, clean and safe stabling is imperative in the current environment. If Sydney is to maintain its standing in global racing it needs to invest far more in its training and racing facilities, not consider selling off its most valuable asset.”
Likewise, since 2017 there has been a significant increase in the acquisition of property that, again, was never put to industry in consultation at a time when clubs state-wide were already struggling to invest in their infrastructure, training and race facilities.
Yet another example of a lack of appropriate industry consultation was the decision in May 2025 by Racing NSW (following the collapse of the business of a high-profile trainer) to demand trainers now provide detailed documentation such as tax assessments and company financials as a condition of their annual license renewal. There was no forewarning, or discussion of how this new requirement could be implemented to minimise the additional compliance burden; maintain confidentiality and privacy or, indeed, whether there was a less onerous alternative mechanism that could satisfy the regulator’s concerns. These onerous and invasive new requirements were presented to trainers as a fait accompli. Trainers’ trust in the regulator was further eroded when the names of those who had failed to meet the regulator’s financial disclosure expectations and requiring more evidence of their viability were mass emailed to a wide group of recipients rather than directly to the individuals’ concerned.
In short, even though the Racing Act requires Racing NSW to act “in the public interest and in the interests of the horse racing industry as a whole”, no formal mechanism exists within the Act to help ensure the regulator consults appropriately with industry participants to deliver on this obligation. The Act should be amended to address this deficiency.
Likewise, under the Act, Racing NSW is required to produce (in addition to its annual report) a Strategic Plan every three years. In its annual report Racing NSW is also required to state its progress against the aims of its Strategic Plan.
However, Racing NSW also appears to fail to meet this obligation. It was reported in evidence to the Rosehill Inquiry in 2024 that there was no record available of a Strategic Plan being published since 2017 (although this document appears to have been updated in 2019). Subsequent to this being disclosed at the Inquiry, Racing NSW belatedly produced a draft strategic plan. Its 2025 Annual report notes that this was discussed at RICG but, as of today, it does not appear to have been finalised.
In addition to the Act better specify consultation and reporting requirements, the Act needs to introduce sanctions for compliance failures.
Racing NSW is also an organisation that comes under the Government Information Public Access Act. It is therefore required to respond to requests for information from the public in a timely and transparent way. However, unlike other statutory authorities it does not appear to have a disclosure log on its website, nor publish the results of GIPA requests. This policy should be changed to enhance public confidence in the regulator.
There is also ambiguity over whether Racing NSW needs to provide information and documents to the NSW Legislative Council under a procedure known as Standing Order 52. These SO52 requests require the support of a majority of upper house members to be passed, and it seems highly irregular that a statutory authority, such as Racing NSW, would reject such a request for information, especially given its authority is derived exclusively from Parliament. This issue should be addressed in the ministerial statement of expectations.
Unlike other principal racing authorities, Racing NSW does not provide a detailed breakdown of its income, instead bundling its income from race field fees, point of consumption tax, tax parity revenue and even monies from sponsorship together. This means that stakeholders have little clarity on key performance areas for the industry.
Accountability & Transparency Recommendations
The provisions for ensuring adequate consultation with the industry need to be strengthened. This can be achieved by:
Creating sanctions for failure to adhere to the Act when it requires the CEO and chair to attend RICG meetings. If the Chair cannot attend, another non-executive member of the Racing NSW board should attend RICG meetings.
Requests or proposals put to Racing NSW from the RICG should be formally responded to by the board of Racing NSW. These requests should be considered by the board, rather than only the executive. These requests and responses should be available to industry participants.
The minutes of RICG meetings should be made available to all industry participants within 5 working days of meetings.
In the absence of an annual general meeting, there should be at least one forum annually where industry participants can attend and ask questions of the board of Racing NSW.
Racing NSW must meet its obligations to develop a strategic plan every three years in consultation with industry stakeholders and then report against this plan in each of its annual report. A failure to do so should see the Directors’ subject to sanctions.
To improve transparency, Racing NSW should be required to provide a detailed breakdown of wagering income in their annual report. At present revenue from race fields, TAB and point of consumption tax is presented together.
Racing NSW should provide transparent information on what payments – including ‘top ups’, capital funding and other grants – that it provides to all clubs.
Racing NSW should include a list of all property they have purchased in the past 12 months in their annual report and rationale for purchase.
The Act should be amended to make clear that Racing NSW needs to provide the parliament with responses to Standing Order 52 requests (these are requests for information that are supported by a majority of members in the Legislative Council).
Racing NSW is a body that comes under the purview of the Government Information Public Access Act (GIPA). To aid transparency it should, like other statutory authorities, create a disclosure log and publicly report on its responses and the time it takes to respond to GIPA applications.
Equine and Participant Welfare
Our industry has made great progress in advancing equine welfare. However, a much better job could be done of being transparent and communicating our record in this area. Public trust and confidence in our ability to self-regulate would only be strengthened by more regular and complete disclosure of data by the regulator.
According to its latest annual report (FY2025), ‘during the year, 1,000 physical inspections (of Thoroughbreds) were completed’. It also reported on the success of its partnership with Equestrian Australia to encourage more equestrians to rehome retired racehorses and the success of Equimillion, a series of equestrian events for retired racehorses, which is one of the richest prizemoney events on the equestrian calendar.
However, the regulator does not provide an analysis of horses being retired annually, with details on where they’ve been rehomed. Also, Racing NSW audits the health of all racehorses on its farms and other rehoming facilities it owns. It employs equine welfare vets to undertake audits throughout NSW at other locations where retired racehorses are rehomed to check whether they are being properly cared for. Disclosure of the scope and results of these audits and details of measures being taken to address any identified shortcomings would be evidence of our industry’s commitment to maintain and be accountable for appropriate standards of equine welfare.
In each of the last three financial years, Racing NSW has held more than $19 million in non-current liabilities for ‘horse welfare’
In the interests of transparency, Racing NSW should disclose when and how it intends to spend this provision.
The trend toward greater transparency is occuring across all sports that depend on the use of animals. Within NSW is the example of the Greyhound Welfare Integrity Commission (GWIC) , a body established after Justice Michael McHugh handed down his report into that industry. GWIC now regularly publishes data on retirements, injuries and deaths (quarterly), details of birth rates (monthly) and also the workings of its race injury prevention panel (every six months). While the RRG does not suggest the welfare challenges in the Thoroughbred and greyhound industries are comparable, the regular publication of this information has helped the greyhound industry repair its reputation after the live-baiting scandal.
The RRG is also of the view that welfare across the Thoroughbred industry could be improved with greater collaboration between state racing authorities. In 2020 participant groups in racing – including breeders, trainers, jockeys and race clubs – commissioned and funded an independent review of welfare across the industry, which was led by former Victorian Premier and veterinarian, Dr Denis Napthine.
The report published by Napthine’s Thoroughbred Aftercare Welfare Working Group (TAWWG) called on the industry to develop a national set of welfare standards and also for the establishment of a national welfare body to champion continuous improvement in this space. These initiatives and others were to be funded through a levy on participants. While the peak bodies representing breeders, trainers and jockeys, as well as many of the leading race clubs, supported the TAWWG’s findings, racing regulators, including Racing NSW, were less welcoming of the recommendations.
The RRG believes that in the absence of national welfare standards, Racing NSW should consult with the industry, veterinarians and welfare experts to create a new set of standards and guidelines. While a version of these currently exist and are published on the website of Racing NSW, they are based on the Five Freedoms principles of welfare, rather than the contemporary Five Domains principles. Furthermore, many in the industry have stated the current standards and guidelines are not well understood by participants.
As well as playing a crucial role in equine welfare across the Thoroughbred industry, Racing NSW has an important role in ensuring participant welfare. Working in the racing industry, especially in those roles which require riding or handling Thoroughbreds, have significant inherent risks.
The RRG believes the Act should be amended to state the promotion of participant health and safety is a clear objective of Racing NSW. This aim should be supported by tasking the regulator with leading Work Health Safety initiatives (WHS), including prevention activities and data collection, on behalf of the industry.
These responsibilities would also include developing an overarching strategy every three years for participant safety and regular annual reporting on WHS projects, expenditure and outcomes.
At present Racing NSW is the licensed insurer under the workers compensation scheme for the racing industry. In June 2022 the State Insurance Regulatory Authority imposed restrictions on Racing NSW – including forcing it to implement a corrective action plan and quality assurance scheme – after finding significant issues with the regulator’s claims management process. Again, requiring Racing NSW to provide transparent information on its claims management process will give further confidence to industry stakeholders.
Equine & Participant Welfare Recommendations
In order to reflect the importance of animal welfare and participant safety, the Act should be amended to set those out as formal objects and specify reporting requirements and measurable targets to maintain the confidence of the general public and industry participants. For example, Racing NSW could be required to publish transparent information on equine welfare and participant safety every six months. This report should include:
Details of any significant participant injuries or deaths during the period and updates on procedures and recommendations to ensure best practice approach to participant and spectator safety
Equine injury and fatality rates
Details on equine welfare expenditure
Information on the number of horses in the care of Racing NSW’s rehoming and retirement properties
An analysis of horses being retired annually, with details on where they have been rehomed
In the absence of national welfare guidelines, Racing NSW should develop equine standards and guidelines that meet contemporary standards. These should be created in consultation with welfare experts, veterinarians and the industry. They need to be clearly communicated and understood by industry participants.
In the interests of improving workplace safety, clear obligations should be placed on Racing NSW. The Act should be amended in order that:
A. promoting high standards of participant health and safety is an express object of the Act, aligned with NSW WHS law,
B. Racing NSW has a defined function to lead industry-wide WHS programs (prevention, data collection, support for clubs and licence holders) rather than only managing claims,
C. a dedicated, transparent WHS and participant safety fund is established and reported on annually,
D. Racing NSW must publish a three-year Participant Health and Safety Strategy and report each year on incidents, WHS projects, expenditure and outcomes, subject to independent audit, and
E. if RNSW is entrusted with industry funds and regulatory powers, it should also be clearly required to use those tools to make racing a safer workplace, not just to respond after injuries occur. 34
Sustainability
One of the most compelling aspects of the Thoroughbred industry is the broad support and engagement it receives across the state. Research commissioned by Racing NSW suggests there are more than 90,000 people who directly participate in the racing industry as employees, participants or volunteers. Approximately 1.8 million attend the races in NSW each year.
The challenge of how the industry can not only survive, but thrive, in coming decades is one that sparks debate from Armidale to Wagga Wagga. It is this issue that has largely driven the formation of the RRG: a desire by people who care passionately about racing to shape its future.
The challenge of how to ensure racing remains sustainable is both complex and wide-ranging.
There are some unique issues, especially given the size of the racing industry in NSW, which has 115 separate tracks and 129 race clubs.
The infrastructure requirements are huge, not only in the maintenance of racing surfaces, but also the stabling required for the equine population and the need for facilities that allow these horses to be trained 365 days of the year. Then there are the facilities for those that attend race meetings and the need to ensure they meet contemporary standards. And all of this infrastructure is required to meet current workplace health and safety standards, as well as those relating to the best equine welfare practices.
As well as the maintenance of this infrastructure, the sustainability of the industry also depends upon an investment in the human capital of racing. The care of racehorses requires a large number of skilled and experienced staff.
The task of ensuring racing remains sustainable has been made more challenging by the failure of Racing NSW to develop a well thought out Strategic Plan in consultation with the industry every three years, as required by the Act.
In the many conversations the RRG has had with industry stakeholders – and the experience of many on the Steering Group too – is that decision making is too often “top down” with little or no debate or input from those impacted most directly.
This disengagement is felt acutely at the level of race clubs, particularly in regional areas.
It is clear that clubs are struggling to cope with the demands on their resources: many current and former race club directors and executives have told the RRG of the difficulty of balancing their ongoing needs, such as maintenance of facilities, with capital expenditure. The financial position of all clubs – from the ATC down to those in the regions – has deteriorated as wagering habits changed from para-mutuel betting through the TAB (from which clubs receive a direct return), to betting with corporate bookmakers (where revenue is returned to Racing NSW).
Many clubs have also told the RRG of the problems caused by the uncertainty they face, not knowing what financial support or ‘top ups’ they will receive from Racing NSW. This has meant some clubs have been close to trading while insolvent as they await funding from Druitt Street, with this money often arriving in the following financial year to pay for activities already conducted.
These clubs are the lifeblood of the racing in regional areas and are also important community assets; allowing people from diverse background to come together and socialise, particularly on major local race days, such as a town’s Cup meeting.
While this review process cannot consider changes to the funding model in order to divert wagering income directly to the clubs, it can and should recommend the Act be changed to include clearly defined principles on how the industry’s revenue should be distributed to aid sustainability.
Racing NSW has done a good job in maximising the returns from wagering, through initiatives such as the race fields legislation and ensuring a dividend from the Point of Consumption Tax.
However, the benefits of this revenue – which is generated by the efforts of industry participants and their investment in racing – have too often been held centrally by Racing NSW and not gone to areas where they are most needed or as quickly as they ought to be allocated.
This can be seen in the regulator’s use of provisions. At the start of the 2023-24 financial year, the balance held in four separate accounting provisions (those for Race Field Provision, Capital Expenditure Provision, Club Sustainability Provision and Prizemoney Provision) totaled $298,038,349. But just $25.8 million of those provisions were used in that financial year, the equivalent of 8.6 per cent.
This was replicated in FY25, when $298,750,492 was held across these four accounting provisions at the beginning of the year, and just $37 million of those provisions were used during the year.
It should be noted these very significant provisions are in addition to the cash Racing NSW has on deposit, which was more than $260 million in both of those financial years.
As mentioned elsewhere in this submission, we believe the Act should be amended to include a clear set of objectives: one of these should be maintaining the ongoing financial health of clubs across the state. Achieving this would almost certainly require Racing NSW to funnel more revenue, more quickly – money that is generated by the activities of participants and clubs – to these community organisations.
Additionally, a set of ministerial expectations should be developed that would include a definition of how much Racing NSW can hold in its reserves (including cash reserves and those held in provisions). These ministerial expectations need to be developed not only in consultation with Racing NSW, but also industry stakeholders.
If there is an unresolved dispute over whether Racing NSW is meeting these objectives and expectations, the NSW Auditor General or similarly qualified person or entity should be tasked to resolve.
To assist more revenue flowing to clubs, a clear set of priorities need to be developed in line with an agreed industry strategic plan. Clubs should then be able to apply for money for projects that are aligned to these priorities. This application process needs to be transparent, along with the decisions, and reasons behind those decisions, provided by Racing NSW.
The industry should be informed of why certain projects or clubs are being funded and others are not.
Further feedback the RRG has received concerns the lack of information received by clubs, including detailed data on wagering on their events. Before Racing NSW became the go-between, clubs were given a detailed monthly breakdown of overseas wagering directly by Sky International, allowing them to implement initiatives to increase that wagering (for example, one club told the RRG it named races with a view to attracting more Singaporean punters as they were providing a significant betting turnover). Despite repeated requests Racing NSW does not share this data. It should be required to ensure such data is once again shared with the racing clubs.
The detailed data provided to clubs also explained how their returns from overseas wagering were calculated, whereas in recent years Racing NSW only provide them with a dividend from this wagering without any supporting documentation or evidence to support that allocation. In the interests of transparency and fairness there should be full financial disclosure.
By way of comparison, in tracking wagering revenue flowing into the sport, the Japan Racing Authority’s Annual Statistics clearly show every single dollar that has come in from wagering and distributed via prizemoney by every year – a very useful measure to track this aspect of the sustainability of their sport and report to its industry stakeholders.
Racing NSW has fallen behind Racing Victoria in its commitment to identify and build major regional training facilities that would be significantly more cost-effective to operate and staff than those currently located in major metropolitan Sydney. Cranbourne in Victoria was significantly redeveloped and expanded over the past ten years, making it the largest training centre in Australia. Racing Victoria, with assistance from the state government, also built a completely new racecourse and training center at Pakenham, that opened in 2015. Meanwhile, in NSW, there has been no similar investment in major training centers, despite a longstanding aim of building a bespoke training centre in the Southern Highlands.
The RRG is confident that it is the absence of a proper industry consultation model allied to the lack of timely agreed strategic plans that is the major reason for NSW languishing behind Victoria.
Another suggestion put to the RRG was the need for Racing NSW to re-establish a network of offices in the eight regional racing areas. Experienced club officials said these offices played an important role in supporting country clubs (which inevitably have small numbers of staff) and ensuring there is ongoing dialogue between Racing NSW and these clubs.
In addition to investing in clubs and capital expenditure to assist with sustainability, there is also a need for significant resources to be devoted to workforce development.
The racing industry cannot remain viable unless it has a skilled workforce and, with shifting population dynamics and fewer people growing up in regional areas and having had contact with horses, this challenge will only get more difficult in coming years.
The racing and breeding industries also have a structural issue that impacts workforce development, as even the biggest employers in these industries are, by national standards, small businesses and therefore cannot run extensive training programs targeting new recruits.
In other jurisdictions racing regulators have acknowledged this challenge and stepped in to establish extensive training programs aimed at bringing new workers into the industry. The British Racing School, which has two campuses and offers a range of courses that are pathways into the industry, is perhaps the gold standard in this area.
Domestically, Thoroughbred Breeders Australia (TBA) has also created a range of programs to bring new workers into the breeding sector as well as initiatives that encourage continuous staff development, such as management workshops. More than 90 per cent of graduates from the TBA’s Fast Track program (which provides on the job training as well as a Certificate III in Horse Breeding) remain working in the industry.
It should be noted that Racing NSW is a registered training provider , meaning it is accredited to teach nationally recognised qualifications. In March 2021 it bought the Scone TAFE campus, so it had a facility to host its training programs.
At that time, there were ambitious targets for the Scone campus, with plans for it to become a centre of excellence that would attract overseas students. Those familiar with the campus in Scone say these objectives have not been met and the former TAFE building is now in a state of disrepair. Former leading jockey, Corey Brown, quit his role coaching apprentices after publicly criticising the lack of investment in the facilities at Scone.
According to the 2025 Annual Report for Racing NSW, just 98 students completed a nationally recognised Cert III or IV courses, with 16 becoming accredited in track work riding and 36 as stablehands.
Given the size of the industry – Racing NSW states there are the equivalent of 27,000 full time roles in racing within the state– it is clear that more needs to be done in workforce development and that the regulator must play a key role in this area.
To help achieve this, Racing NSW should provide a detailed report on its initiatives each year. This should include the number of courses it offers, details on where these courses are being delivered, numbers of enrolments and completions, as well as information on how many students remain in the industry.
As well as the initiatives Racing NSW undertakes within the state, it is also a member of Racing Australia and, along with Victoria, has the power of veto on decision-making at the national body. Every stakeholder – be they owner, trainer, jockey or breeder -acknowledges that, while regulated at a state level, racing is a national industry.
As such, there are opportunities for collaboration that will benefit the entire industry, including participants based in NSW. Obvious areas for co-operation include rule-making, welfare strategy, race planning and the pattern, as well as the lobbying of federal government on issues such as biosecurity or access to foreign workers visas.
Given the potential importance of this national collaboration in ensuring the sustainability of the Thoroughbred industry, the statement of ministerial expectations should require Racing NSW to engage in good faith discussions with other states.
Sustainability Recommendations
The Act should define the principles for the distribution of wagering and tax revenue and define the limits for Racing NSW building reserves. In the event of an unresolvable dispute on funding operations, the Auditor General, or similarly qualified entity, e.g. industry Ombudsman should be created and assigned a resolution role.
Racing NSW should be required to provide clubs with detailed information about wagering on their meetings, including the revenue generated from overseas wagering and the resulting income.
To support the sustainability and viability of country racing, Racing NSW should re-establish regional offices. These would provide administrative support to country clubs.
Racing NSW must develop a clear and transparent mechanism to allow clubs to apply for funding. Applications and the reasons for their success or failure in attracting funding should be available to industry.
Racing NSW must report annually on its initiatives to build workforce capacity. This report should include courses it offers (it is a registered training organisation), numbers of enrolments and numbers of students who complete courses and then remain within industry.
The Review should recommend an immediate prioritisation of funding of dedicated training centres outside metropolitan Sydney and annual updates in NSW annual reports on progress.
The statement of ministerial expectations should require Racing NSW to demonstrate it engages in good-faith discussions with other states on matters of national significance.
