Last week, we looked at the problems with taxation and made recommendations for the industry to be given the same incentives for expansion and investment as offered to the entertainment, amusement and tourism sectors.

Incentives being given to the agricultural sector should also be extended to the racing industry. At present, only lip service is being paid and the breeding of horses is forever seeking full recognition.

This week, we continue with a look at revenue and expenditure over the years, and recommendations for improvements that are urgently needed. Turnover is the only source of income available to the industry. Unless this is growing at a faster rate than expenditure, then bankruptcy is inevitable.

Inadequate purse

The largest recurring expenditure which the promoting company has is the weekly payment to participants who are essential to the industry, i.e., jockeys, trainers, owners, breeders and others. This is covered through purse payments. It is the current inadequacy of this payment which has brought things to a head. The table above looks at the performance over the last five years. We have done this analysis using the figures for local racing only.

From the table, readers will note that for the period 2003-2008, sales on local racing have increased by 68 per cent, purses paid out have increased by 26 per cent, and expenses to the owners have increased by 82 per cent.

It must also be pointed out that only 48 per cent of the purses paid come to owners to meet the charges from trainers. Breeders get nine per cent and the balance is shared: 15 per cent to trainers (in addition to what they earn from charges to owners), jockeys 10 per cent, and grooms five per cent.

Purse money is only paid to horses that finish between first and fourth in a race. The structure of how purse money is distributed needs to be examined. There is an argument for increasing payments made for first-pass-the-post from 60 per cent to 75 per cent. But this is mere tinkering when the problem is more endemic - how can we increase the turnover and provide a larger pie from which to meet these increasing costs?

Over the past years, simulcasting of races from overseas has been an important avenue for increased revenue. In 2008, sales of simulcast racing yielded an additional $1,993 million in revenue.

Simulcast racing

This is an important source of additional revenue which attracts minimal expenses and needs to be expanded. Simulcasting now repre-sents 44 per cent of total sales and should be expanded to supplement the sales during local racing. These additional sales form an important part of the pie from which additional purses can be paid.

Every effort must be made to expand simulcast racing. The impasse with the contracts committee needs to be resolved urgently. Egos and pride have no place in an arena where the livelihood of people is being affected. The promoting company has already lost two senior employees over this nonsensical breast-beating exercise. I am surprised that the minister has not intervened, as he has with other entities under similar pressure.

Howard L. Hamilton, CD, JP, is a former chairman of Caymanas Track Limited. He is the current president of the Thoroughbred Owners' and Breeders' Association. He can be contacted at howham@cwjamaica.com.

Performance of racing industry