The Harness Racing Victoria (HRV) Annual Report has been presented to the Victorian Parliament in respect of the financial year ended 30 June 2012.
The Report shows a loss of $6,631,000, compared to a $100,000 profit the previous year.
There are several factors that influenced the result:
1) Wagering Returns From Tabcorp
The primary source of income for HRV is from our Joint Venture arrangement with Tabcorp. For the 2011/12 financial year, income from the Tabcorp Joint Venture amounted to $46.9m, which was $2m below the budget of $48.9m.
2) Federal Court Action by Sportsbet P/L
In August, the Federal Court handed down its decision in an action brought by Sportsbet challenging HRV’s right to charge a fee for use of HRV race fields under Victorian Racefields Legislation.
The Court ruled that while HRV is entitled to charge a fee based on turnover, the 1.5% fee charged by HRV was discriminatory against Sportsbet.
Despite the HRV Board’s resolution to appeal the decision to the Full Bench of the Federal Court, HRV has taken a conservative approach and raised an impairment provision, writing off $1.713m in the accounts.
3) Development Fund Expenditure
Expenditure on development projects rose from $1.12m to $4.74m in the current year, a bottom line impact of $3.62m. This exceeded budget by $0.5m.
The most significant expenses in this category were the recently completed Cranbourne Training Complex ($1.01m) and the partially completed construction of the Swan Hill track and lights ($2.33m). Both projects are receiving financial assistance from the State Government through the Regional Racing Infrastructure Fund.
4) Stakemoney Expense
Despite the decline in income, and several extraordinary expenses, stakemoney expense for the year rose by 1.5% from $33.99m to $34.52m. This was largely on the back of a $460,000 increase in Vicbred win bonuses.
