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PARTICIPANTS BULLETIN

September 2025

CHAIRMAN'S REPORT

Dear NSW Racing Industry participants,

Unfortunately, there has been much misinformation relating to the Australian Turf Club (ATC) and why Racing NSW has issued a Show Cause Notice as to why the ATC should not be put into administration.

Racing NSW wanted to take the opportunity to reassure all participants that this action was being taken to protect the interests of the entire NSW Thoroughbred Racing Industry. Racing NSW will work through this process with the ATC, in the best interest of all our 50,000 participants to ensure their jobs and livelihoods.

Why Racing NSW Intervened:

• ATC is heavily subsidised by the NSW Thoroughbred Racing Industry and it depends almost entirely on Racing NSW for both operating and capital funding.

• Cash reserves have been shrinking raising concerns around ongoing solvency.

• Recent developments have raised alarms regarding Governance practices.

This is notwithstanding Racing NSW having:

• Increased funding from $31 million per annum (2015) to $164.7 million per annum (2025).

• Negotiated an extra $42 million per annum in agreements to support ATC on top of the $164.7 million additional funding mentioned above.

• Bailed out the ATC on multiple occasions when it couldn’t make payments needed for loan repayment, redundancies and Grandstand cladding.

On top of all of the additional funding provided by Racing NSW for prizemoney increases, the ATC also receives $38 million per annum to use towards funding its operations. This funding has increased by 35% since 2015.

Wagering Revenues – A Common Misunderstanding

A frequent claim is that ATC should simply receive all wagering revenue generated by betting from all wagering operators on all its races. Based on this claim, the ATC would receive $80.1 million. The actual money it receives from Racing NSW from wagering highlights why this argument is absurd given that in 2025, the ATC actually received $233.1 million in total funding from wagering revenues (TAB distribution + Racing NSW contributions). That’s $153 million more than the ATC generated itself. It also received an additional $42 million per annum from agreements negotiated by Racing NSW with TAB, Sky Channel and Channel 7.

This means Racing NSW is already giving the ATC far more than its own races directly produce from wagering. Without Racing NSW’s intervention, prizemoney levels and operations would be unsustainable which demonstrates the extent to which the ATC is subsidised by the NSW Thoroughbred Racing Industry.

How the ATC is Funded?

The ATC is heavily subsidised by the NSW Thoroughbred Racing Industry as set out in detail below.
To fully understand the ATC’s funding model, we need to break down where the money comes from and how it has changed in the past 10 years (2015 → 2025).

Main Sources of Revenue:

• TAB Distribution – ATC’s share of the TAB distribution.

- 2015: $80.7 million
- 2025: $68.6 million

➝ Decline of $12.1 million despite overall industry growth. This means TAB income has been shrinking as a proportion of ATC’s funding. Racing NSW has however provided a $12 million top up of the TAB distribution included in below additional funding.

• Racing NSW Additional Funding – extra support provided by Racing NSW in addition to the TAB distributions.

- 2015: $31.0 million
- 2025: $164.7 million

➝ Increased by more than 430%. Racing NSW is now the major funder of ATC, covering gaps that ATC cannot fill on its own.

• Revenues Negotiated by Racing NSW in new agreements with TAB, Sky Channel and Channel 7

- 2015: $14.4 million
- 2025: $40.9 million
→ growth in these additional revenues due to Racing NSW negotiating new agreements.

• Other Revenues:

- ATC Commercial Revenues (after costs): $15.6 million in 2015 → $13.6 million in 2025 → no growth over a 10 year period.
- Other Racing Revenue: $7.5 million in 2015 → $9.4 million in 2025
- ATC Other Income: $10.4 million in 2015 → $15.0 million in 2025.

Total Revenues:
• 2015: $159.5 million
• 2025: $312.2 million

➝ Overall revenue has nearly doubled, but the entirety of the increase comes from Racing NSW, not ATC’s own commercial activities.

1. Prizemoney

• 2015: $89.3 million
• 2025: $216.9 million which more than doubled, with the increase funded entirely by Racing NSW.

This increase was critical for keeping Sydney racing competitive and providing the ATC with additional opportunities to drive commercial revenues

2. Wagering Revenues – A Common Misunderstanding

A frequent claim is that ATC should simply receive all wagering revenue generated by betting from all wagering operators on all its races. Based on this claim, the ATC would receive $80.1 million. The actual money it receives from Racing NSW from wagering highlights why this argument is absurd given that in 2025, the ATC actually received $233.1 million in total funding from wagering revenues (TAB distribution + Racing NSW contributions). That’s $153 million more than ATC generated itself. It also received an additional $42 million per annum from agreements negotiated by Racing NSW with TAB, Sky Channel and Channel 7.

This means Racing NSW is already giving the ATC far more than its own races directly produce from wagering. Without Racing NSW’s intervention, prizemoney levels and operations would be unsustainable which demonstrates the extent to which the ATC is subsidised by the NSW Thoroughbred Racing Industry.

3. ATC’s Costs

ATC revenue growth from non-wagering has been limited however cost increases have been significant:

• Staff Costs

- 2015: $36.6 million
- 2025: $60.2 million

➝ Up by 65%, far above inflation. Meanwhile, ATC’s own non-wagering revenues only rose by $2.6 million in 10 years.

4. Current Financial Concerns

• Loans and Debt

- ATC has $35 million in debt facilities (bank loan + overdraft).

- ATC could not meet a $5 million repayment to its bank so Racing NSW had to pay it on behalf of the ATC and further had to be guarantor on the ATC’s $35 million debt facilities.

- Racing NSW had highlighted to the ATC that its cost structure was unsustainable and required to put in place a much more cost effective executive management structure. Racing NSW paid $1.5 million to the ATC so they could pay the redundancies on the executive staff that were made redundant. Unfortunately, these admin costs continue to rise.

• Cash Reserves

- 2015: $50.1 million
- 2025: $21 million

➝ Decline of nearly 60% in cash reserves.

• Assets vs Liabilities

- 2015: Net current assets of +$31.5 million
- 2025: Net current assets of -$8.7 million (excluding $30 million loan)
➝ Deterioration of $40.2 million.

- Also concerning, the $21 million in current cash reserves is less than the $32.1 million of revenue received in advance meaning ATC has less cash than it needs to cover these future commitments.

Overall: ATC is losing financial resilience. Rising costs, falling reserves, and heavy borrowing have created significant doubts about its ability to survive without ongoing bailouts.

5. Capital Infrastructure?

The major infrastructure improvements at ATC racecourses over the past decade were not funded by ATC itself, but by Racing NSW and NSW Government support:

• 2012: $150 million funded by Racing NSW from the sale of an industry-owned asset to the TAB which funded Queen Elizabeth II Stand.

• NSW Government: funded $24 million of improvements at Rosehill Gardens.

• 2021: $47 million from Racing NSW (via TAB agreements) funded construction of the Winx Stand.

• 2015–2025: $20 million additional funding, including $7 million committed in 2023 to replace cladding on QEII Grandstand (for safety compliance).

This shows that the ATC has not been able to self-fund its major projects. Racing NSW and the NSW Government have consistently stepped in as evidenced above.

6. Corporate Governance Issues

Financial stress is not the only concern. Governance problems at the ATC are also serious:

• Three Board resignations recently.
• Two of these resignations explicitly cited governance concerns.
• Racing NSW has evidence of breaches of ATC’s Code of Conduct by Board members, and has written to ATC outlining these concerns, which have not been adequately addressed.

These governance failures compound financial weaknesses, making it harder for Racing NSW to trust and rely on ATC’s management to effectively operate our metropolitan race club.

7. Comparison to Country and Provincial sector on key metrics

As compared to the Country and Provincial sector:

• Trading Performance: ATC decline of 16%, Country and Provincial increase of 41%
• Net current assets: ATC decline of 128%, Country and Provincial increase of 96%
• Cash: ATC decline of 59%, Country and Provincial increase of 87%

Key Comparisons (2015 vs 2025)

1. Funding Sources

Source of Revenue 2015 ($m) 2025 ($m) Change

TAB Distribution 80.7 68.6 ▼ -12.1
Racing NSW Additional Funding 31.0 164.7 ▲ +133.7
ATC Commercial Net Revenues 15.6 13.6 ▼ -2.0
Revenues Negotiated by Racing NSW 14.4 34.9 ▲ +20.5
Other Racing Revenue 7.5 9.4 ▲ +1.9
ATC Other Income 10.4 15.0 ▲ +4.6
Total Revenues 159.5 306.2 ▲ +146.7

As can be seen, nearly all revenue growth is from Racing NSW contributions and negotiations and not from ATC’s own activities.

Dr Saranne Cooke
Chairman
Racing NSW