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Restructuring Imperative For Industry Survival

Phumelela's success is key to industry success

A Public announcement notice on a significant stakeholder meeting on the South African horseracing industry was published on Thursday 8 August 2019.

On 22 July 2019, a meeting was held with various industry players and some significant stakeholders in the horseracing industry.

The purpose of the meeting was to discuss, the challenges facing the industry, as well as the scope for co‑operation to benefit and improve the industry in South Africa.

Those present recognised that in order for the industry to be more sustainable, it would need to be more inclusive, working and focussing on a far greater participation by previously disadvantaged persons.

Those present acknowledged that the horseracing industry urgently requires some form of restructuring and the involvement of various industry players and stakeholders, including the South African government.

This restructure will be crucial in achieving the vision for an inclusive, financially sound and sustainable horseracing industry.

Amongst the various ideas suggested and discussed was the creation of a single body that would oversee the horseracing industry in South Africa.

Once again, the backing of various stakeholders and the South African government in creating such a single body will be crucial to its success. Additional due diligence, process and consultation still has to be researched in order to explore this feasibility.

In this regard, a horseracing industry restructure committee is in the process of being established, together with the terms of reference for such a committee, which will involve, amongst other things, researching and recommending potential strategies and opportunities for the industry.

The ultimate vision is to get to an inclusive, financially sound, transformed and sustainable industry for the benefit of all South Africans.

The recent amendments to the Gauteng’s Gambling Regulations in respect of the distribution of the tax levied on punters’ winnings is damaging and harmful for the horse racing industry and will create liquidity constraints.

The unilateral removal of the distribution of a portion of the tax levied on punters’ winnings by the Gauteng Gambling Board will create an almost insurmountable problem for the operators.  We would urge that the authorities reconsider this decision in the interest of all employees of the industry.

Pocket Power, Boy Boy Jevu

It is estimated that between 120,000 and 180,000 people, many of whom are breadwinners for their families, are employed within the industry in South Africa. These include groomsmen, trainers, jockeys, breeders, bookmakers and owners. Their livelihoods and ability to feed their families will be in jeopardy should this industry not be a successful one.

Engagements between industry players and stakeholders are ongoing and further updates will be communicated in due course.

Phumelela Gaming & Leisure Limited is viewed by many in the industry as pre-eminent in the South African racing and gaming environment. As such, in order for the industry to succeed, this body also needs to succeed. The executives of Phumelela, Gold Circle and Kenilworth Racing have largely indicated that they are in support of the above initiatives.

It is imperative that all people involved in this industry, no matter how big or small, need to stand together to ensure that this industry is placed on a firm footing for the benefit of the future generations.

  • Announcement issued by Phumelela Gaming & Leisure Ltd on 8 August 2019

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26 comments on “Restructuring Imperative For Industry Survival

  1. Jacob says:

    This sounds like the usual spin! No detail no specifics. Who were the chosen stakeholders ? Why no reference to the stakes cuts ? What is being said here was obvious ten years ago.

  2. Tony Mincione says:

    God help us, not a fact anywhere…not one.

  3. Steve Reid says:

    “Phumelelas success is the key to the industries success”

    What a load of tripe. Phumelela were successful at one stage and their profits flowed outside of the industry by means of shareholder dividends. If anything, all traces of Phumelela and its coherts should be removed as speedily as possible to safeguard the industry from further asset stripping. Have we all forgotten our recent history?

    Germiston
    Newmarket
    Bloemfontein
    Arlington
    Vaal Sand

    All on the back of one of the most generous dividend ratios on the JSE. Two short years ago the Phumelela executive paid themselves obscene bonuses and today we face business rescue. Why in the world would the industry want, or need, this “expertise”? The obvious answer is the opposite of a “successful” Phumelela for sure.

    “It is estimated that between 120,000 and 180,000 people, many of whom are breadwinners for their families, are employed within the industry in South Africa.”

    Portfolio Committee hearing into Horse Racing 11 September 2013. Employment figures in the Horse racing sphere estimated at 100000 in 1995 has plunged to 15 326 in 2009. Source: Econ Impact study. This presentation delivered by Robin Bruss current NHA board member. Was he misleading parliament or are Phumelela misleading us?

  4. Roderick Mattheyse says:

    Tony, i’m surprised at your surprise.

    This Sporting Post racing community seems happy that the Operator communicates – regardless of the junk that it spewed.

    There is a sale next week – comrade breeders make sure you have blood stored – its going to flow in the streets.

    All the breeders, punters, owners, trainers, grooms and fans in general deserve way better – the 120 000 to 180 000 people whom rely on an income deserve way better

  5. Johann Liebenberg says:

    And yet the roomer of closing down centers looms. Breaking news an hour ago about Flamingo Park that might close down followed by we want to see 180 000 have job security 20 minutes later. What must we as owners, trainers and the people employed permanently at race courses around the country take from these two articles. Do not invest further and limit the industry or buy more horses let’s see what happens??? What will be interesting is to see what happens now at the 2YO sale after these articles.

  6. Tony Mincione says:

    This is a PR disaster. The “public announcement” is clearly some sort of air-freshener. I would guess there is more, because there is certainly nothing here. So what’s the smell we are trying to mask?

    Lots of 3-syllable words that imply things aren’t going well. More words that something is going to have to be done at some point with an ultimate goal that culminates in the Directors leading us singing Kumbaya around the winners’ enclosure.

    The first touch at reality misses by a mile when a public company cries that it can’t go on without the gift of tax from the peoples. Hopefully someone can explain where the taxes collected from the punters actually goes when we give it to Phumelela Gaming And Leisure Ltd. It’s not stakes. It’s not gambling. Please don’t let it be to fat cat pockets. Please not directors or shareholders. Well, where then?

    Perhaps, as the press release claims, the taxes are “in the interest of all employees of the industry”, and estimated 120,000 to 180,000 people. What? No, seriously, does anyone fact check this shit?

    So we don’t know what happened. Or who it happened with or to. We don’t know why it happened now particularly. But we are reassured, there are initiatives, largely supported, that is imperative for the benefit of the future. All you need to know, apparently, is that we need to stand together with a firm footing. Advice to live by I would say.

  7. Mgram says:

    Why are the people that have destroyed an industry seen as crucial to it’s survival?

  8. Charles says:

    Phumelela Gaming & Leisure Limited is viewed by many in the industry as pre-eminent in the South African racing and gaming environment. As such, in order for the industry to succeed, this body also needs to succeed.
    This statement is a warning and was not just thrown in as an afterthought.
    Get PGL out of this mess or there will be no South African horse racing!
    pre-eminent

    adjective
    surpassing all others; very distinguished in some way.

  9. Ralph Fell. says:

    George Orwell must be celebrating – this mob are model students. Did any of these knuckleheads ever consider inviting a group of hard-knocking punters to spell out to them what punters, the lifeblood of the industry, would expect?

    1. karel says:

      PUNTER | meaning in the Cambridge English Dictionary
      https://dictionary.cambridge.org/dictionary/english/punter

      punter definition: 1. a person who gambles (= risks money guessing the result of something): 2. a … UK slang a person who uses the services of a prostitute.

  10. Paulo Do Carmo says:

    I am not sure I should be crying or laughing about this statement. I know I was speechless after the following “Those present recognised that in order for the industry to be more sustainable, it would need to be more inclusive,..”
    If it was to be “inclusive” who was included? Its the same old story…the selected few, the know alls. How is it possible that at cross roads in the industry, is an invitation to participate not made public?

  11. Tony Mincione says:

    Charles, you point out they are saying “Get PGL out of this mess or there will be no South African horse racing!”

    As a racing enthusiast (with no shares in PGL) I wonder who you mean when you say that. Are you looking to hit me up for a donation? What would you do with it?

    The share price today was R2.48 and the market capitalisation R250 M. They own shares in Supabets, Isle Of Man Tote, Interbet etc. On the face of it there must be some debt or the arithmetic gets odd.

    Whatever, you make it sound as if “we” are somehow at fault to have “let” them fail. What is the leak that needs fixing?

    1. karel says:

      You really think you’ll get a reply to your concern?
      Ha!

  12. Shanil says:

    As long as the dinosaurs remain without any new blood coming in we are doomed. People in power for too long. Did nothing to grow the sport . Just happy for the perks.

  13. Graham Hurlstone-Jones says:

    In horse racing it’s an “educated” guess ( thats the attraction the driving force of its existence )……but yes, a guess. The second part I have never thought about but there you go, all of sudden I dont want to bet, Hang on, Newcastle, money coming off the fav, need to see where it’s going….cheers.

  14. Barney Joffe says:

    The right course of action would be for Phumelela to be placed into business rescue by its board of directors.
    Should Phumelela be placed under business rescue the directors lose their powers and their little nest egg of shares will become worthless. Creditors will run the show through the business rescue practitioners.
    It seems that despite the poor picture painted to us and the plaintiff call for inclusivity, the board of directors are hell bent on putting themselves first and remaining in power.
    The only way that there can be one body controlling racing is for Phumelela to be placed into business rescue. It will force the government to act. It cannot happen by negotiation. The Phumelela board are clinging onto power to find a solution on how they can best benefit rather than what is in the interest of the industry.
    I ask myself why the Phumelela board has not realised that they are the problem. They have created this situation. Why have they not stood down.
    I hear that Phumelela has several court cases that are on the go in the supreme court where it’s legal costs are over R1000 000 per month. Why? Why? Why is so much money being spent on such nonsense. The court cases and ridiculous spending will be suspended if Phumelela goes into business rescue.
    I beg the Phumelela board to stop these secret meetings and to do what is right for the industry. You have failed be big enough people and do what is right.
    Do not wait until the last moment when salaries cannot be paid and you can sit back in your loungers at home conning yourselves that you tried.
    Horse racing is more important than you.

  15. DavidS says:

    Barney Joffe well done, you have put it into words and hopefully the people really interested in saving racing will face the revelation of the woods from the trees,, self enrichment and self serving decisions will always be Phumelelas 1st call, they have to be stopped because they will hang on to the destruction of everything

  16. Charles says:

    Aurora Empowerment Systems took over Grootvlei and Orkney mines , ostensibly to save the mines. Instead, Aurora never paid for the mines, and it then began systematically stripping the mines and using that money to line the pockets of Aurora directors.
    The directors now have to Payback The Money
    .
    Phumelela Gaming and Leisure took over Gosforth Park and Newmarket racecourses ostensibly to save the racecourses
    Instead xxxxx

  17. Please advise me which BRAIN DEAD journo / spokesman / spin doctor Phumelela has now employed to perform this ”smoke and mirrors” campaign??
    Who the hell do you believe you are communicating with when trying to spin these yarns?
    The public / punter / owner / trainer should know that in 1996, 95% of the employees that were in racing were ”culled” once Phumelela took over – GRC, NMRC, BRC, CRC were all ”sold” – WE will never be advised to WHO!!
    So where are all your overheads, what / who do the 100k – 180k EMPLOYEES consist of & why has your shares dipped from R19.00 to R2.40 in 1 year??
    Any BRAINDEAD can answer such – the R85m a year (from bookmaking) has been halted, this should not have adversely affected Phumelela, if the business had been run properly – YOU are not an SOE, so you should not have to rely on HANDOUTS!!
    The time is now to get proper racing administrators to run the sport – people that UNDERSTAND how the punter / owner / trainer minds work – this LOYAL breed is what will keep the game going not YOU (BRAINDEADS).
    Oh apologies nearly forgot, STOP having covert meetings & STOP keeping your DONORS a secret – such sounds like a sinister reminder of what is happening in politics…..

  18. Johann Liebenberg says:

    Thank you to each and all that comment on this post. Great to see everyone agrees in one way or the other. Let’s stand together and fight this. Owners, employees at race courses, trainers, breeders, punters are the life of the industry and together are much more powerful than one mismanaged entity.

  19. Concerned says:

    The rumours about Flamingo closing
    How can they do this we have families to look after make a living here. We can’t all move on some of the grooms were born on the race course grew up in the game where must they go to. Where must all the horses and other animals go to . Must they all be killed . The only sand track left in our country we are not running at a loss WHY us. Somewhere somebody must be able to keep us going.Some People love their horses. Mr. Miller has been training horses their for over 40yrs where must they go.
    Please reconsider this madness

  20. Cecil Pienaar says:

    Dear Concerned.

    If ever there is a time that I hope a rumour is NOT true, its this one.

    On my bucket list was to visit all the Race Courses in SA, which we achieved. Even the ones, before they were (sadly) closed.

    Flamingo Park, difficult punting track for me. But beside the point, looks like a happy set up, really enjoy some of the Afr interviews.

    I had the (absolute) pleasure to sit and talk to the late Mr Peter Miller at Jhb. Our smaller planes were delayed – “What a man”, he did so much for racing.

    The saddest part for me, and I don’t like criticising – But

    The Chiefs sitting high and mighty, inherited, like the Government – Businesses and systems that worked before. And they messed it up.

    I am sorry the PP report was set aside ( for now )
    Not my nature, I wanted a few ‘in the dock’. This will still happen, I believe in karma.

    Let’s hope ….

  21. WILLIAM MILKOVITCH says:

    It’s very close now. SA Racing, represented by all the various usual suspects/stakeholders, is about to implode.

    Plan – Let government take it over/buy it for R1, in the form of a State Owned Entity similar to that of Eskom. Give the white/elitist tag & money the marching orders.

    Let the government re-employ those in positions @ Phumelela & NHA to run racing ‘into the ground’ a bit more, for another year or so, and then apply for a bail-out. In the same vein as SAA/Eskom.

    Government surely will be all to happy to oblige and empower the people without forgetting certain passionate custodians of the racing industry and then we can :-

    Row, row, row your boat
    Gently down the stream
    Merrily merrily, merrily, merrily
    Life is but a dream

  22. Sean says:

    Went down to the local tote. So much shouting by staff members but very little servicing of clients. I went down after 1pm and guess what, the tote screen had not even been logged on. Sometimes there is no person on the tote…clients swearing/moaning as they can’t place bets BUT there is never a manager in site. I look at this and decided to leave. Exponentially x that and t/over drops which has a direct correlation with Cost of Occupancy.Oh well, another branch to close they won’t have jobs… while those clients have found another product to enjoy! Cheers Phumelela/Betting World!!!

  23. WILLIAM MILKOVITCH says:

    Sean, it’s a never ending story of mismanagement.

  24. Punter says:

    These guys are waiting their time and money because this thing is not gonna work, because if they continue doing it without consulting all stakeholders and public, it will same like what happened on 1997 MOU.

    Secondly if they call all stakeholders to participate that will be in trouble again for them, so by the way this thing is not gonna work.

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