One of the primary objectives of the Racing Association is to ensure a fair arrangement for owners with regards to prize monies.
In a letter addressed to Racing Association members on Thursday, RA CEO Natalie Turner wrote that this was secured in the stakes agreement between Phumelela Gaming & Leisure Ltd and the RA.
This agreement ensured fair distribution of stakes based on the different revenues generated by the operator.
Ms Turner writes that it has been nearly a year since Phumelela went into Business Rescue and on the 1st of June it will be year since racing resumed after a 2-month lockdown.
By the time Phumelela went into business rescue, they had already indicated that they were not in a position to pay stakes at the levels envisaged and that they would need to cut stakes significantly once racing could resume on 1 June 2020.
The business rescue process triggers a number of powers to be granted to the Business Rescue Practitioner, the powers are given in order to protect the company. These legislative conditions allowed the BRP to ultimately cancel the stakes agreement early on in the process.
The Racing Association was able to contribute over R4 Million to owners in a Covid Relief Grant as well as support stakes until the end of November 2020 to the amount of R16 Million.
We have assisted in many of the support initiatives established during Covid and also worked hard to maintain our support of the Horse Care Units, Benevolent Funds and projects run by the Racing Trust.
This includes the Work Riders Training Programme and the Gauteng Jockey Academy.
We have done so with the main focus to support our owners on the Highveld, in the Western and Eastern Cape, and also to support the industry as a whole.
The Racing Association has continued to negotiate monthly with the BRP on stakes.
In order that stakes were paid at an acceptable level in order to race, the RA topped up stakes by 20% from the period June to November. When revenues for Phumelela improved over time, the RA negotiated the relevant increase into prize money as we had to then step away from supporting stakes in order to preserve our reserves.
On 31 March 2021 the transaction for 4Racing to acquire the racing assets of Phumelela was approved by the Competition Commission.
However, amongst other regulatory requirements, approvals for the transfer of Gambling Licenses still needed to be obtained from 8 of the Gambling Boards. To date, one of the approvals have been granted and the other seven are at various stages in the process.
In the interim, the RA has been engaging with 4Racing on the stakes commitment they, as the new operator, will be able to present in the near future.
We agree with the principle of seasonal stakes and welcome initiatives such as series races across jurisdictions to entice participants to travel and compete against the best in the country and to do so for desirable stakes.
It is important to note that only once the various regulatory requirements are met, particularly those of the Gambling Boards, will 4Racing be able to formally announce their commitment to stakes.
As we move towards a new era in racing, we believe a unified and positive approach will navigate us through successfully.
We are satisfied with the principles and processes proposed by 4Racing as a starting point in reinstating stakes closer to pre-Covid levels and will work together to ensure the stakes model is sustainable, both for owners and for the operator, is appropriate and informed and offers adequate security to owners.
“I must thank you, the owners, for your unwavering support and continued commitment to this industry under very difficult circumstances”, said Ms Turner in closing.
