Victorian thoroughbred racing industry remains in strong position following release of FY22 results

Racing Victoria (RV) has today released its results for the 2021-22 financial year (FY22), in conjunction with its 2022 Annual Report, which demonstrate the Victorian Thoroughbred Racing Industry (VTRI) remains in a healthy position.

RV has reported a net surplus of $13.9 million, whilst delivering significant targeted increases in its investment in prizemoney, infrastructure, equine welfare, and club funding to support members, participants, and the sustained growth of the VTRI.

A strong RV balance sheet and net asset position is essential with some uncertainty around future wagering revenues with the Victorian Wagering Licence up for renewal in 2024.

2021-22 Financial Year Highlights

• RV has emerged from the COVID pandemic and associated H1 restrictions with a net surplus of $13.9 million;
• Total revenue from operations increased by 4.6% to $572.5 million;
• New turnover record of $9.2 billion, up 5.3% year-on-year;
• Total wagering revenue decreased by 0.5% ($2.1m) due in part to the impacts of COVID related restrictions on the TAB retail network in H1; and
• Net assets grew to $197.2 million, up 7.6% year-on year, with the consolidation of media subsidiaries into the RV accounts.

Prizemoney

• Participants continued to receive unprecedented levels of return with total prizemoney paid in FY22 totalling $272.4 million – an increase of 8.2% year-on-year and 65.4% since FY14;
• Victoria maintained its position as a national leader with average prizemoney and bonuses on offer per TAB race rising to more than $68,000; and
• A further $31 million increase in prizemoney and bonuses on offer announced in FY22 for the 2022-23 racing season.

Equine Welfare

• Continued investment in equine welfare programs and initiatives as part of a three-year $25 million commitment commencing January 2020; and
• The FY22 commitment enabled the continued development and implementation of initiatives such as the RESET Program, Off The Track Community, Equine Limb Injury Prevention Program and the purchase of Australia’s first PET scanner and Victoria’s second standing CT scanner.

Club Funding

• Clubs continued to receive additional financial support and, as a result, are positioned to capitalise on a post-COVID rebound;
• COVID grants of $25 million were provided to Clubs in FY22 bringing to $74 million the total special payments made to Clubs through the pandemic via grants and prizemoney top-ups; and
• Clubs have now received underlying funding growth (excluding special grants) of $50.4 million or 134.7% since FY14.

Wagering

• FY22 turnover growth of 5.3% was highly correlated with Wagering Service Providers’ (WSP) promotion, advertising and customer generosity investment focused on Victorian thoroughbred racing; and
• Wagering income was down 0.5% to $389.3 million owing to a significant decline in VicTAB Joint Venture (JV) distributions income (down 9.8%) due to COVID related retail network closures, fixed costs, and the effect of market structural shifts.

Infrastructure

• Infrastructure expenditure increased by $12.2 million (60%) to $32.4 million, primarily through the resumption of works temporarily suspended during the COVID period and the acceleration of Caulfield trainer relocation projects; and
• The purchase of the North-West Land (980 acres at Oaklands Junction on the urban fringe of Melbourne) to future-proof the VTRI was announced in May 2022. Following the completion of due diligence, the property settled for $25.3 million plus associated fees in October 2022.

Media

• Victorian Thoroughbred Racing Integrated Media Business (VTRIMB) is a 100% owned subsidiary of RV that became active from 1 July 2021 to support VTRI growth objectives such as fan engagement, customer acquisition, wagering turnover growth, and broadening the reach and distribution of VTRI content;
• In August 2021 RV acquired the remaining 75% of Thoroughbred Racing Productions (TRP) and in May 2022 acquired 73.25% of RSN 927; and
• VTRIMB assets collectively produced direct revenues of $75.4 million on behalf of VTRI, whilst indirectly enabling significant wagering turnover growth.

FY23 Outlook

• With no COVID restrictions in place as per previous years, Clubs are welcoming crowds back which can drive their hospitality and events income and further support sponsor and membership retention;
• An expected easing of turnover and race fields income growth post COVID materialised through the first quarter of FY23 with the return of competing leisure and entertainment opportunities and the rising cost of living playing a role;
• The marquee meetings have been successfully held in the 2022 Spring Racing Carnival with turnover returning to record levels for the Melbourne Cup Carnival off the back of a competitive wagering landscape and increased promotional activity;
• The 2024 Victorian Wagering Licence process remains ongoing which may see changes to historical JV industry funding arrangements. RV’s primary focus is to ensure that the significant funding historically associated with licence arrangements is maintained and protected into the future.

Quotes attributable to RV Chief Executive, Andrew Jones

“This is a positive set of financial results and testimony to the efforts of everyone at Racing Victoria and across Victorian racing, especially during the first half of FY22 where racing continued under strict biosecurity protocols and COVID restrictions.

“I would particularly like to acknowledge the contribution of Giles Thompson, who was RV CEO through the period.

“While FY22 delivered record turnover of $9.2 billion, overall wagering revenue slightly declined and the start of FY23 has seen wagering soften with a return to a more normal operating environment and some macro-economic headwinds. 

“Looking ahead, our focus will be industry sustainability, prudent financial management and the next phase of growth for Victorian racing.

“Our goal is to deliver compelling racing for fans and punters, distribute our revenue fairly across participant groups, and ensure Victorian racing enjoys the capital, infrastructure and social licence to operate even more successfully each year.”