COVID damage to Victorian racing likely ‘tens of millions’ for spring carnival

The governing body announced an increase surplus for the 2020 financial year, though the industry will lose tens of millions this spring carnival.

Verry Elleegant wins last Saturday’s Caulfield Cup in front of empty stands. Picture: Getty Images

The financial damage wrought by COVID-19 to Victorian racing clubs during the Spring Carnival will run into the “tens of millions”, though there is a glimmer of hope of some crowds at some of the remaining big days and the reopening of TAB outlets on Melbourne Cup eve.

The latter will provide a timely fiscal boost to Racing Victoria, with the governing body revealing a $10.8m net surplus for 2020 on Monday despite a large fall in income from its joint venture with TAB operator Tabcorp.

While the surplus was up from $8.8m in 2019 and wagering on Victorian races has been at record highs in the recent months, the governing body has seen its income from the joint venture fall by more, $13.5m, during the first four months of COVID-19, than the $12.27m increase it received in race fields fees charged by online wagering operators.

That has been mainly due to a structural decline in retail wagering as more punters bet online but also the continued closure of TAB outlets in Melbourne and pubs and clubs.

Racing Victoria chief executive Giles Thompson said it would be a rare piece of good news that the loosening of state government lockdown restrictions should see TAB outlets open on November 2, the day before the Melbourne Cup, subject to final approval.

But Thompson said the racing clubs, be those based in country Victoria or metropolitan clubs such as the Victoria Racing Club at Flemington will do it tough during the usually lucrative spring carnival as grandstands remain closed, and that Racing Victoria recently agreed to provide almost $20m in additional grants and prize money support.

“RV is going OK as an entity as our income is in media and wagering, and that has held up. But the problem for the spring is in the clubs. They are spending a lot of time and effort mitigating the downside,” Thompson said.

(But) it is clearly tens of millions, there’s no doubt about that. Our ($20m) contribution to them and support for them will not cover all their downsides, it will be north of that. Quite how far north we don’t know yet.”

There are still hopes of some crowds being allowed at racetracks in time for the Melbourne Cup Carnival in two weekends’ time, but the vast majority of betting will take place digitally as it has during the spring carnival so far.

Racing Victoria officials therefore expect the amount bet on its racing to be at record levels this year as punters are now even more used to wagering on their phones. Officials said digital wagering was up about 20 per cent so far during the carnival

Total wagering income on Victorian racing reached $7.1bn in the year to June 30, a record amount, though a new state-based point of consumption tax hit the amount of actual income Racing Victoria took from betting.

The governing body’s support for the racing clubs also saw it dip into its Industry Sustainability Fund, agreeing to provide an additional $15m in support from the fund.

Racing Victoria still has about $70m invested in Australian and international shares and interest bearing securities, and another almost $20m in cash investments.