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Horse racing stoush -

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Horse racing stoush

Broadcast: 04/05/2011

Reporter: Greg Hoy

One of the most attended spectator sports in Australia, thoroughbred racing, is part of a growing
conflict. There are concerns that not enough of the money raised by racing is being put back into
the industry itself.

Transcript

LEIGH SALES, PRESENTER: Australia has more racehorses per capita than any other nation. In fact
thoroughbred racing's the third most attended spectator sport in the country. But according to many
in the industry, not enough of the enormous revenue generated by racing is going back into securing
the sport's own future. The issue's turning into an increasingly bitter power struggle between
industry leaders, and it looks set to intensify, with allegations racing reform's hampered by
conflicts of interest. Here's Greg Hoy with the first of a two-part report.

MICHAEL DUFFY, CHAIRMAN, RACING VICTORIA: It is a very, very important industry in this country.

GREG HOY, REPORTER: The most bruising contest in racing is the race for control of the sport
itself. Last year there was $14.3 billion of punters' money up for grabs, money that's critical to
horse owners, racing clubs and Australia's two wagering giants, Tabcorp and Tattersalls.

KEVIN DIXON, CHAIRMAN, BRISBANE RACING CLUB: Out of those three groups, two are really, really
struggling, owners are a long way underwater clubs find it hard to make ends meet and the waging
operators are making a lot of money.

GREG HOY: Thoroughbred racing is the major drawcard for lucrative wagering revenues, but what
drives betting is broadcasting and racing simply doesn't control its own broadcast rights.

PETER V'LANDY, CHIEF EXECUTIVE, RACING NSW: It should aggregate all its broadcast rights into one
area and sell it to the highest bidder. You know, the scenario has been over the years: it's divide
and conquer.

GREG HOY: Dividing and conquering is the largest wagering operator Tabcorp. Its Sky racing channel
screens in 5,000 betting outlet's cross the country. It controls race schedules, and so, arguably,
the industry itself.

MICHAEL DUFFY: It's the only sporting body that I am aware of of any real significance that doesn't
control its media rights nationally. Why are we any different?

GREG HOY: Tabcorp wouldn't be interviewed, but has said its financial returns to racing are
generous. Critics say they're far from it. They accuse Tabcorp of cannibalising the interests of
horse racing by crowding Sky racing broadcasts with more and more rival betting events.

Australia's Productivity Commission recently recommended competition regulator the ACCC examine
Tabcorp's dominance of race broadcasting. But Victoria and NSW want the industry to control its own
race channel and so have launched TVN under chairmanship of Harold Mitchell, but facing fierce
resistance from Tabcorp itself.

HAROLD MITCHELL, CHAIRMAN, TVN & MITCHELL COMMICATIONS: If they don't control the pictures, they
don't control the industry into the future and it will never be as strong.

GREG HOY: Queensland was offered the biggest share of the industry's TVN to join the rebellion, but
to the surprise of many, it said no and instead chose to sign up exclusively with Tabcorp's Sky
channel for 10 years.

HAROLD MITCHELL: I had very good meetings, I'd thought, with a man called Bob Bentley, who was the
chairman of racing Queensland, very good, good, frank discussions and I thought that we were
understanding completely where racing is going into the future, and then suddenly something very
odd and different happens and it's totally rejected.

BOB BENTLEY, CHAIRMAN, RACING QLD LTD: The industry down south, I mean, owns TVN. I think that'll
play out in the future and I don't think that anybody has got any idea where this is going to end
because of the connection with wagering operators.

GREG HOY: Bob Bentley is a formidable figure in Australian racing - chairman of the Racing
Queensland, chairman of the Australian Racing Board, vice chairman of the Asian Racing Federation,
and it's widely believed that in the Sunshine State, Bob Bentley runs racing his way. With support
of the Queensland Government, he's recently had his and his board's term at Racing Queensland
effectively extended by four years, plus his board's authority over other racing codes.

RAY STEVENS, QLD SHADOW RACING MINISTER: The issue in Queensland racing is clearly one individual
has absolute control.

BOB BENTLEY: I don't think that's fair. That's certainly a perception. I have a board. I mean, we
act in a normal corporate manner.

RAY STEVENS: He has been unelected for eight years and has just been given the power by the Labor
State Government to govern for another four years unelected.

GREG HOY: Bob Bentley is used to criticism, but insists Queensland's decision to break away from
the national industry and enlist with Tabcorp's Sky channel had nothing to do with him and was
handled by a paid consultant.

BOB BENTLEY: Racing Queensland is the control body put the rights together and negotiated on behalf
of the clubs. At the end of the day, the clubs had to make the decision whether they took a Sky
channel contract or TVN contract.

HAROLD MITCHELL: From what I was able to determine, we had the stronger offer, but it suddenly
disappeared as to whether we could find out anything more.

BOB BENTLEY: I'm not (inaudible) to disclose that. I mean, that's a matter between the clubs and
the offers that were on the table.

GREG HOY: Queensland Clubs got varying increases in payments but had to sign confidentiality
agreements and some are worried about the deal's transparency.

KEVIN DIXON: I think there were probably parts of the negotiation and deal that we were wondering
whether we knew all the facts.

GREG HOY: But overshadowing this debate is widespread concern about Bob Bentley's apparent conflict
of interest. As well as heading Racing Queensland, Mr Bentley also acts as a director of the giant
Tattersalls UNiTAB wagering group, which controls retail wagering in Queensland and distributes
dividends to the industry through racing Queensland.

BILL CARTER, FORMER QLD SUPREME COURT JUDGE: We have been complaining about this since 2002. There
is justifiable concern. You see, as a director of Tattersalls, his major legal and moral
obligations are to the shareholders of that company.

GREG HOY: Such problems may be compounded, as Tattersalls is widely expected to either merge with
or take over Tabcorp's soon-to-be-separated wagering division, which houses Sky Racing.

PETER V'LANDY: There will be one wagering operator in Australia, either it being Tattersalls, which
owns UNiTAB, or it being Tabcorp, which owns TAB. I think there'll be one. And with Tabcorp
demerging, that'll happen sooner rather than later.

GREG HOY: The result would be a Tabcorp-Tattersalls wagering behemoth, its broadcasting rights
intact. The racing industry still unable to control its broadcasts. This raises the awkward
question: has Tattersalls' board, on which Bob Bentley is a director, ever discussed taking over
Tabcorp's wagering division, which houses Sky Racing?

BOB BENTLEY: Oh, Greg, I mean, that's the discussions amongst the board of Tattersalls. I mean, we
discuss a lot of things going forward about how we might progress the company and how we might make
Tattersalls Group a better company, but individual discussions are a matter for the board.

GREG HOY: But have you been involved in such discussions on the Tattersalls board?

BOB BENTLEY: Anywhere I have a conflict of interest, Greg, I always stand aside, but the interests
of wagering to get the best possible dollar out of wagering is also in the best interests of the
racing industry.

GREG HOY: But not everyone accepts Bob Bentley's assurances that how he manages his conflict of
interest is enough to deal with the issue, especially the life-long racing enthusiast and former
Queensland Supreme Court judge Bill Carter.

BILL CARTER: That's the sort of thing we always hear. It's a manageable conflict of interest and I
can manage it by leaving the room. The idea that by leaving the room any person in that position is
ignorant of what's happening in the meeting and will remain totally ignorant of what's happened in
the meeting, both before and after it, is mindless.

GREG HOY: In the end, what needs to happen here?

BILL CARTER: It ought to be the minister or the Queensland Government and simply say to him, "If
you want to be the chairman of - and the leader of Queensland Racing, then you can't have both."
But that's not going to happen.

GREG HOY: Bill Carter has even greater concerns about the government attitude to conflict of
interest in racing Queensland, and he's not alone. There is growing anger at the racetracks
throughout Queensland that could yet change more than racing in the Sunshine State.

LEIGH SALES: And we'll have part two of Greg Hoy's story tomorrow night.