What Can We Afford?

Written By Thursday 13th September 2012  

What Can We Afford?

Greyhound racing presents a huge contrast between old and new.

As “Chasing Dreams” reminds us (available via GRV), clubs have been hugely dependent on the work of willing volunteers for their very survival. Without them, the sport may well have died out, and with it the breed as we know it. Yet progressively since the 1960s, and particularly since SKY boosted income in the 1990s, it has become more and more dependent on cash from people the club has never heard of and will never meet.

The first dollar to an off-course TAB changed everything. Except the willing workers.

That’s the conundrum. Racing still depends on the local committee, yet they are often battling to keep up with modern trends. Today, racing is relevant only to the extent that the population includes enough people who are prepared to gamble away some of their income. To them, it’s not a question of dedication but of having fun. Racing is just one of many “fun” options.

But the further away the customer, the less the raceclub works at providing a wider range of experiences, and the less it looks at diversifying its business activities. It is a matter of degree, of course, as some do better than others. But, by and large, the outside interests are limited to running a TAB/Tabaret or social club on the premises, and neither of those occurs very often. That’s fine but it is barely a diversification anyway, and it may not succeed (the pokie palace at Harold Park trots in Sydney was a dismal failure, for example).

Multi-code operations might help but they pose their own problems. Layouts may be compromised and greyhound races are invariably pushed into the distance, thereby removing the intimacy which would otherwise comprise a strength. But all that barely matters as nobody comes to the track anyway, other than for feature events. Even then, the chances are they will watch the TV monitors and not the live races. That is, unlike a shopping centre, there is no other business to pull in customers so you could at least profit from the leftovers.

Boiling it all down, greyhound racing is a very inefficient use of assets and resources. Seldom does it pay commercial rates for its land, while the facilities are lucky to be put to use two or three times a week, even allowing for trials and the like.

If it is any comfort, racing is not alone in having that problem. Take, for example, our much vaunted mining sector. According to research by the Business Council of Australia new projects have become too expensive. It found that “Australian resource projects are 40 per cent more expensive to deliver than in the US Gulf Coast. Australian labour is 35 per cent less productive … for projects near cities and 60 per cent less productive for remote projects. Our airports are 90 percent more expensive, hospitals 62 per cent, shopping centres 43 per cent and schools 26 per cent more expensive than in the US” (The Australian 12 Sep).

That may or may not be highly relevant to racing, as such, but it does illustrate that any business has to try harder if it is to succeed in the long run, and that governments will need to look more carefully at the unintended consequences of what they do. And, make no mistake, racing today is very much a business. Unless those dollars keep flowing, racing would soon be relegated to the back blocks of coursing, if that.

Currently, there is evidence that some governments, but not all, have recognised that racing is worth supporting because it generates economic activity, to say nothing of being easily taxable. That’s good, but it is no guarantee that windfalls will be repeated and there is a limit to how much tax can be gouged from any one source. Wagering already suffers from far higher deductions than other forms of gambling and rates may well increase again – Tabcorp, for example, has just ramped up Quinella, Exacta and Doubles deductions, using a very thin excuse.

With pressures sure to rise in both cost and income areas that leaves greyhound racing with the task of becoming more efficient in order to maintain its surpluses. But how do you do that when the majority of clubs/tracks see only one meeting a week and there is no other activity to justify expensive facilities, which are no more than trainers’ lounges, really?

In recent years, only two rationalisations have taken place in Australia, and one of those was involuntary (Gold Coast). The other was the combination of Orange and Bathurst clubs into a single venture at the latter, which, in turn, then gained TAB coverage.

Previously, several tracks had been de-licensed in Queensland (Lawnton, Toowoomba, Mt Isa, Beenleigh), in NSW (Albury, Griffith, Queanbeyan, Moss Vale, Penrith, Singleton, Cessnock) and in Victoria (Wangaratta, Wentworth). Even so, the question must be asked whether there should be more. How will the industry look 10 or 20 years down the line if it persists in flying the flag at every existing location? Can it afford to run them all, irrespective of the help it has been getting from unpaid volunteers?

Is it worthwhile putting millions of dollars into needed improvements, year after year, when those investments produce no extra income? No sensible business would do that – certainly not mining – yet racing does. It has just done it again at Ballarat, and before that at Healesville, Bendigo and Shepparton. Bathurst, Maitland, Richmond and Dapto all soaked up big money. Casino and Lismore badly need upgrading but it makes no sense to do both. The Gardens sucked in $6 million-plus and is still battling to pay its way. Wentworth Park should have been ripped up and re-built years ago. And so it goes on.

Of course, an improved bottom line would allow better returns to owners and trainers, which in turn helps generate support for those remaining clubs. The solution is not more racing, but more efficient racing.

(Funny thing, though. There are two places where I have most enjoyed sitting back and taking in the racing, right in front of my nose – Moss Vale (bring your own deckchair) and Newcastle’s Beaumont Park. Both are dead and buried).

Bruce Teague Bruce Teague (346 Articles)

Bruce Teague has had a lifelong interest in greyhound racing as a modest punter. Over the last 20 years he has helped develop and market the GreyBase range of computer form analysis programs, and written extensively for several industry publications. He has inspected over 30 greyhound tracks in recent years in the three eastern states and Tasmania. Bruce has a lengthy background in international and domestic airline management involving economic route studies and numerous visits to overseas aircraft manufacturers. He has conducted consultancies for private and government clients on policy and economic subjects.



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