The Racing Victoria Limited Group (RVLG), incorporating Racing Victoria (RV) and Racing.com Media (RDCM), has released its 2024 Annual Report incorporating its statutory reported results for the 2023-24 financial year (FY24) ending 30 June 2024.
RVLG has reported a statutory net deficit of $11.8 million for FY24, compared to a net surplus of $0.2 million in the previous financial year.
The FY24 reported result includes one-off industry support costs relating to the Southside Racing merger, and other non-recurring costs. Excluding these costs, the underlying net deficit was $3.0 million versus an initial budgeted deficit of $12.1 million that had pre-empted changes in the wagering market and to the industry funding model, including the transition from the expiring Victorian Wagering Licence and VICTAB Joint Venture (JV).
Whilst wagering turnover declined by 10.2% to $7.9 billion, Victorian thoroughbred wagering remained the number one wagering product nationwide. Total turnover in FY24 was down from the peak of $9.1 billion in FY22 but above pre-COVID levels of $7.1 billion.
A number of factors contributed to the decline in wagering turnover, including cost-of-living pressures, high interest rates, increased competition from other sports, a reduction in advertising and promotions from Wagering Service Providers (WSPs), and additional wagering regulatory measures introduced by Government.
However, stronger than average WSP gross margins drove race fields product fee income and helped to offset the turnover decline. The three-code Victorian Racing Industry (VRI) was also able to execute a settlement during the year, to exit the historic VICTAB JV on more favourable fixed terms. Consequently, total wagering revenue in FY24 increased by 1.0% to $364.4 million.
Overall, RVLG’s total revenue from operations decreased by 3.1% to $536.8 million, due in large part to the planned cessation of certain Government funding programs ahead of the transition to the new industry funding framework.
Partly offsetting this was a $12 million gross reduction in overall RV operating expenditure. Following the impacts of significant inflation, contract indexation and annual wage review, the net reported reduction in RV operating expenditure was $7 million – a 5% improvement on FY23.
RV Chief Executive, Aaron Morrison, said: “After 11 consecutive surpluses, we budgeted for a deficit in FY24 given changing dynamics around the industry funding framework and Australia’s wagering market, and the net underlying result has been better than forecast.
“In summary, the RV Executive and Board took the decision to prioritise the maintenance of returns to participants and other industry and stakeholder funding in the face of declining revenues and changes to our industry funding model.
“In connection with this, there was a significant realignment of race programming and prizemoney, and we executed on various planned spending cuts across the entire group to help manage the expected deficit.
“Through sound management over an extended period our net asset position is $185.4 million which means that the business is well placed to absorb this planned deficit in the short-term, whilst continuing to prioritise returns to the industry through prizemoney and bonuses and ongoing investments in key areas like welfare and infrastructure.
“After a material reduction in our operating costs through FY24, we remain focused on further optimising business costs, capitalising on potential efficiencies, and ensuring that we maximise returns on industry funds across the entire group.
“We are nearing the conclusion of a highly successful Spring Racing Carnival where crowds have been on the rise. Now is more important than ever to use our industry assets and media business to continue to elevate the promotion of Victorian racing to a wider and more mainstream audience.
“This Spring Racing Carnival has shown that racing has a major role to play as a social and economic contributor in Victoria and with that comes the opportunity to continue to grow the sport and return to a more favourable financial position in the near future.”
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