‘Monumental failure’: How a racing code lost its $100m nest egg

Harness Racing Victoria has been accused of a “monumental failure of governance” that led to the sport’s governing body losing control of its $100 million land asset at Melton.

Angry stakeholders claim HRV has borrowed so much money to keep the sport afloat over the past five years that it is now expected to hand over its 93-hectare land parcel at Melton to the state government.

Harness Racing Victoria is expected to hand over Melton Entertainment Park to the state government.Credit: Facebook

Two sources familiar with negotiations, but unable to speak publicly, said the government had written to the HRV board telling it to sign over the Western Highway property, which is the site of Melton Entertainment Park.

HRV was accused of “financial mismanagement” in an explosive statement released on Friday by the presidents of a powerful group of harness racing bodies.

“HRV’s financial mismanagement has rendered it virtually insolvent and unable to meet its debt obligations,” said a statement from the Victorian Harness Racing Kindred Bodies. The group represents the Trots Clubs of Victoria, the Victorian Trainers and Drivers Association, the Victorian Harness Racing Club, the Victorian Square Trotters Association, Harness Breeders Victoria and the Caduceus Club Victoria.

“Its loan borrowings from the government using our vacant land asset at Melton as collateral has all but forfeited a vital industry asset valued at $100 million.”

In 2019, a change in state government policy meant that government entities such as HRV could not sell land without returning the proceeds to the government’s consolidated revenue.

From then, HRV borrowed heavily against the land to prop up prize money and cover operating costs, owing the state government more than $40 million.

“At no time has HRV advised the industry that the Melton land asset was under threat or could be lost,” the Kindred Bodies statement says.

“The 93-hectare land parcel at Melton, purchased by the industry for $3 million two decades ago, was intended to be a future fund for harness racing; a valuable asset that would generate ongoing returns, much like the sale of Harold Park in Sydney.

“Yet, due to HRV’s poor policy decisions and escalating debt, it is now doubtful that our industry will be able to capitalise on that shrewd investment in our future.”

The HRV board – led by chairman Adam Kilgour – and executive – led by CEO Matt Isaacs – is answerable to Racing Minister Anthony Carbines.

The Kindred Bodies’ statement says the sport is projected to lose $24 million in the 2024 financial year, and has lost as much as $50 million in the past five years.

They fear breeders, owners and trainers will flee Victoria because they are expecting “cuts to stake money of between $10 million (22 per cent) and $18 million (40 per cent) over the next three years that will devastate participants and the sport”.

Racing Minister Anthony Carbines is working with Harness Racing Victoria.Credit: Eddie Jim

Carbines told this masthead that the government was “working closely with Harness Racing Victoria to improve their financial performance”.

“We have delivered significant support to ensure HRV remains financially viable because the long-term financial sustainability of the sport is important to the economy and to the overall health of the Victorian racing industry,” he said.

The government says the harness racing industry in Victoria generates more than $613 million annually for the state economy and helps sustain more than 4400 full-time equivalent jobs – most of which are in regional Victoria.

Isaacs, the HRV chief executive for the past 18 months, said it was “reckless” for the Kindred Bodies to “issue a statement representing inaccuracies and undermining industry confidence”.

Harness Racing Victoria is poised to lose control of Melton Entertainment Park.Credit: Wayne Taylor

“Harness Racing Victoria states in the strongest terms that what has been expressed only creates fear and uncertainty among the stakeholders the bodies are meant to represent, distracting from the collective efforts to resolve the financial complexity that we all face,” Isaacs said in a statement.

“HRV has made it clear in many previous media releases and industry conversations that the changing wagering environment has created numerous financial challenges, which are being felt by all racing authorities.

“HRV, with the support of the Victorian government, is committed to resolving the challenges with and on behalf of the industry for the future viability of harness racing in Victoria.”

The Kindred Bodies said they had no confidence in the current board to continue leading the industry.

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