The recent prize money cuts by Racing NSW to The Championships were necessary, not many people will disagree with that. However, using the Coronavirus as the sole reason doesn't wash for many hardened racing folk.
Prize money is at record levels in NSW which has forced other States to compete. Sure, prize money is a good thing to be spread around to owners who are the second biggest losers (only to punters) out of the industry however the prize money levels were unsustainable back when the word 'corona' was just an alcoholic beverage.
Why? Turnover was in decline across the board. The rise of sports betting was taking away (our) racings market share. Why and how racing lost so much market share is a discussion for another day.
"PVL rides the virus wave again. Turnover was imploding and the virus has provided the perfect smokescreen" said our very own Marc Lambourne.
Coupled with dwindling turnover has been the loss of margin to those who are responsible for the collection of punters cash, the bookies. The corporate bookies have been hit with more and more taxes on racing than ever before so they have naturally directed and encouraged their customers over to sports which are both simpler to bet on and derive less taxes and fees. More margin for them. Racing's traditional collection product 'the tote' was allowed to be 'borrowed' by the corporate but instead of a healthy 17% going back to racings coffers the corps were allowed to bet the 'best tote' product which operates around the 8% margin (pre taxes).
With less money coming in how was prize money going to be sustainable? It's worth noting that racing boards right around Australia are littered with those involved in the breeding industry. You could argue the single biggest benefactor from high prize money are breeders, particularly those at the higher end of the scale.
It's hard to argue logically that the prize money levels were sustainable and those that were making the most were not actually gambling at all - unlike punters and owners.
Why pump a major race from $500k to $1m or races worth $1m to $2m when in essence we've been attracting the same field quality, if not worse?
Racing continues for now and we are all thankful of that. But sheer logic told us the prize money bubble had to burst soon. Lets hope we all survive and come out at the end of this with better plans to grow turnover and make the game sustainable for the real customers of the great game.