It’s the first Tuesday of November. For many in the business world, it’s about interest rates. For others, it’s about the Melbourne Cup, which today is being run for the 163rd time, from Archer’s win in 1861 to Gold Trip’s success last year.
Sean Aylmer checks in with Tom Reilly, CEO at Thoroughbred Breeders Association, to see how the racing industry is performing.
Find out more: https://fearandgreed.com.au
See omnystudio.com/listener for privacy information.
00:00:03,990 –> 00:00:06,810
Sean Aylmer: Welcome to the Fear and Greed Daily Business Interview. It’s
2
00:00:06,810 –> 00:00:09,299
Sean Aylmer: the first Tuesday of November, for many in the business
3
00:00:09,300 –> 00:00:11,610
Sean Aylmer: world, it’s about interest rates. For others it’s about the
4
00:00:11,610 –> 00:00:13,770
Sean Aylmer: Melbourne Cup, which of course is being run today for
5
00:00:13,770 –> 00:00:18,000
Sean Aylmer: the 163rd time from Archer’s win back in 1861 to
6
00:00:18,000 –> 00:00:20,279
Sean Aylmer: Gold Trip’s success last year. I thought it was a
7
00:00:20,280 –> 00:00:22,918
Sean Aylmer: good opportunity to check in on how the thoroughbred racing
8
00:00:22,920 –> 00:00:28,349
Sean Aylmer: industry is going. So I’d like to welcome back the
9
00:00:28,349 –> 00:00:31,620
Sean Aylmer: boss of the Thoroughbred Breeders Association, the chief executive Tom
10
00:00:31,620 –> 00:00:33,390
Sean Aylmer: Riley. Tom, welcome back to Fear and Greed.
11
00:00:34,800 –> 00:00:36,570
Tom Riley: Great to be on Sean. Thank you very much.
12
00:00:37,080 –> 00:00:38,940
Sean Aylmer: Tom, it must be an exciting time of year for
13
00:00:38,940 –> 00:00:42,300
Sean Aylmer: your industry, the spring racing carnival, this four to six
14
00:00:42,300 –> 00:00:44,280
Sean Aylmer: week period, and particularly in Sydney and Melbourne.
15
00:00:44,790 –> 00:00:47,668
Tom Riley: Yeah, this is certainly the time when racing is really
16
00:00:47,909 –> 00:00:50,880
Tom Riley: in the shop window, on main stage. So we’ve had
17
00:00:50,880 –> 00:00:52,949
Tom Riley: the Everest and of course today we’ve got the Melbourne
18
00:00:52,949 –> 00:00:55,200
Tom Riley: Cup. So yes, I’m sure there’ll be millions of people
19
00:00:55,290 –> 00:00:58,260
Tom Riley: around Australia watching the action at Flemington today.
20
00:00:58,800 –> 00:01:00,630
Sean Aylmer: So can you give me some idea of how big
21
00:01:00,690 –> 00:01:03,930
Sean Aylmer: the racing industry is in Australia? I mean, I’ve done
22
00:01:04,590 –> 00:01:06,780
Sean Aylmer: some work on it previously. It’s huge.
23
00:01:07,469 –> 00:01:09,870
Tom Riley: You’re right. It is huge. If we’re looking at it
24
00:01:09,870 –> 00:01:14,190
Tom Riley: from a jobs perspective, there are over 80,000 full- time
25
00:01:14,190 –> 00:01:18,870
Tom Riley: jobs within the thoroughbred industry. If you’re looking at prize
26
00:01:18,870 –> 00:01:24,149
Tom Riley: money, there’s getting towards $ 900 million in prize money across the almost 19,
27
00:01:24,150 –> 00:01:30,209
Tom Riley: 000 races in Australia each year. But for people who
28
00:01:30,209 –> 00:01:32,009
Tom Riley: aren’t really that familiar or who are maybe just watching
29
00:01:32,250 –> 00:01:36,480
Tom Riley: the Melbourne Cup today, Australia’s got an enormous industry for
30
00:01:36,480 –> 00:01:39,360
Tom Riley: the size of population. So we’re the second- biggest thoroughbred industry
31
00:01:39,360 –> 00:01:42,660
Tom Riley: in the world after America, and obviously America’s got a
32
00:01:42,660 –> 00:01:45,989
Tom Riley: much bigger population to sustain that. So people around the
33
00:01:45,990 –> 00:01:49,320
Tom Riley: world look at Australia as a leader in the thoroughbred
34
00:01:49,320 –> 00:01:52,230
Tom Riley: industry. So the action on the track is really highly
35
00:01:52,230 –> 00:01:56,910
Tom Riley: regarded. Australia hosts more of the best races than any
36
00:01:56,910 –> 00:01:59,880
Tom Riley: other country in the world. So both in terms of
37
00:01:59,880 –> 00:02:02,790
Tom Riley: the quality of the action on the track, as well
38
00:02:02,790 –> 00:02:06,510
Tom Riley: as the economics of it, Australia really is a powerhouse
39
00:02:06,600 –> 00:02:07,260
Tom Riley: around the world.
40
00:02:08,070 –> 00:02:10,080
Sean Aylmer: Where are we up to? Is it growing still? I
41
00:02:10,080 –> 00:02:12,660
Sean Aylmer: mean, there was a golden period a couple of decades
42
00:02:12,660 –> 00:02:15,059
Sean Aylmer: ago, but where’s it up to now, particularly given the
43
00:02:15,059 –> 00:02:16,530
Sean Aylmer: competition from other sports?
44
00:02:17,610 –> 00:02:20,820
Tom Riley: So wagering has, which is obviously one way to look
45
00:02:20,820 –> 00:02:25,350
Tom Riley: at it, wagering is plateauing out post- COVID, but still,
46
00:02:25,470 –> 00:02:29,520
Tom Riley: Australians love to bet and enjoy betting on horses. In
47
00:02:29,520 –> 00:02:33,059
Tom Riley: terms of number of horses, those numbers are dropping. So
48
00:02:33,059 –> 00:02:34,860
Tom Riley: the foal crop, what we talk about the number of
49
00:02:34,860 –> 00:02:39,210
Tom Riley: thoroughbreds born each year, is around 12,500. It’s been steady
50
00:02:39,210 –> 00:02:41,759
Tom Riley: there for the last couple of years. But if you
51
00:02:41,760 –> 00:02:44,850
Tom Riley: went back 30 years ago, that would’ve been closer to 20,
52
00:02:44,850 –> 00:02:49,020
Tom Riley: 000 horses born each year. So it’s definitely contracting. I
53
00:02:49,020 –> 00:02:52,350
Tom Riley: would argue that the quality is improving. But one real
54
00:02:52,380 –> 00:02:56,608
Tom Riley: big area where the industry is growing, is around ownership
55
00:02:56,610 –> 00:02:59,699
Tom Riley: and people participating by having a share in a horse.
56
00:02:59,699 –> 00:03:04,800
Tom Riley: And so now in Australia, there are around 105, 000 registered
57
00:03:04,889 –> 00:03:09,059
Tom Riley: owners. To give you some kind of context for that,
58
00:03:09,510 –> 00:03:13,559
Tom Riley: the UK has 14, 000. America, which has the biggest
59
00:03:13,559 –> 00:03:17,100
Tom Riley: number of race horses, they’ve only got about 30,000 registered
60
00:03:17,100 –> 00:03:20,190
Tom Riley: owners. So here we’ve got a lot of people, they
61
00:03:20,190 –> 00:03:22,020
Tom Riley: might not own the whole horse, they might own 5%
62
00:03:22,020 –> 00:03:24,810
Tom Riley: of the horse or 10% of a horse. A lot of
63
00:03:24,810 –> 00:03:26,100
Tom Riley: people who are really engaged with it.
64
00:03:26,820 –> 00:03:29,160
Sean Aylmer: The Melbourne Cup stops the nation. We know that. In
65
00:03:29,160 –> 00:03:32,250
Sean Aylmer: Sydney, the Everest has fast become a major race, even
66
00:03:32,250 –> 00:03:35,279
Sean Aylmer: though it isn’t a Group One race. How important are
67
00:03:35,279 –> 00:03:36,690
Sean Aylmer: these marquee events?
68
00:03:37,350 –> 00:03:40,410
Tom Riley: So in racing, essentially there are races going on all
69
00:03:40,410 –> 00:03:44,760
Tom Riley: across Australia, 364 days of the year. So it’s an
70
00:03:44,760 –> 00:03:49,650
Tom Riley: industry that’s going nonstop, but it’s not like the AFL
71
00:03:49,650 –> 00:03:51,570
Tom Riley: or the NRL, that we have a grand final with
72
00:03:51,570 –> 00:03:55,380
Tom Riley: all that attention focused on one event. So having these
73
00:03:55,380 –> 00:04:00,300
Tom Riley: marquee events is really important in terms of speaking to
74
00:04:00,300 –> 00:04:03,450
Tom Riley: those people maybe who don’t follow racing week in, week
75
00:04:03,450 –> 00:04:06,270
Tom Riley: out, to say, ” Hey, look, here’s our industry. Here’s a
76
00:04:06,270 –> 00:04:10,859
Tom Riley: great day, a great event. With really, what drives it
77
00:04:10,859 –> 00:04:13,800
Tom Riley: all, is these amazing horses. And I’m sure even if
78
00:04:13,800 –> 00:04:16,260
Tom Riley: you’ve got no interest in having a punt, having a
79
00:04:16,260 –> 00:04:19,289
Tom Riley: bet, if you go to the races and spend a
80
00:04:19,290 –> 00:04:21,210
Tom Riley: bit of time in the mounting yard beforehand and have
81
00:04:21,210 –> 00:04:24,389
Tom Riley: a look at the horses, these are stunning animals and
82
00:04:24,389 –> 00:04:25,469
Tom Riley: that’s what really pushes it all.”
83
00:04:25,950 –> 00:04:27,449
Sean Aylmer: Stay with me, Tom. We’ll be back in a minute.
84
00:04:27,449 –> 00:04:37,080
Sean Aylmer: My guest today is Tom Riley, CEO of the Thoroughbred Breeders
85
00:04:37,080 –> 00:04:42,809
Sean Aylmer: Association. Okay, now racing isn’t without its challenges, not least
86
00:04:42,809 –> 00:04:45,510
Sean Aylmer: being the reliance on gaming, you talked about $ 900 million
87
00:04:45,719 –> 00:04:48,990
Sean Aylmer: in prize money. I presume the bulk of that comes
88
00:04:48,990 –> 00:04:51,900
Sean Aylmer: from revenue from gaming. Am I right in that? Similarly
89
00:04:51,900 –> 00:04:53,370
Sean Aylmer: with tax take? Is that right?
90
00:04:53,610 –> 00:04:56,970
Tom Riley: Yeah, so over 90% of the funding of the racing,
91
00:04:57,029 –> 00:05:00,990
Tom Riley: of prize money, is derived from wagering or from taxes
92
00:05:00,990 –> 00:05:01,560
Tom Riley: from wagering.
93
00:05:02,070 –> 00:05:04,500
Sean Aylmer: Okay. So there’s a lot of pressure at the moment
94
00:05:04,500 –> 00:05:08,430
Sean Aylmer: to reduce the amount of advertising being allowed in gaming.
95
00:05:08,940 –> 00:05:10,380
Sean Aylmer: Where do you stand on that one?
96
00:05:11,310 –> 00:05:13,680
Tom Riley: Yeah, so there was a report, as I’m sure lots
97
00:05:13,680 –> 00:05:15,178
Tom Riley: of your listeners will be aware, there was a report
98
00:05:15,240 –> 00:05:19,049
Tom Riley: earlier in the year, which had 31 recommendations looking to
99
00:05:19,830 –> 00:05:24,029
Tom Riley: reform online gambling. Thoroughbred Breeders Australia, very supportive of the
100
00:05:24,029 –> 00:05:28,830
Tom Riley: vast majority of those recommendations. I suppose there are two
101
00:05:28,830 –> 00:05:32,099
Tom Riley: real areas of concern from a thoroughbred industry point of
102
00:05:32,099 –> 00:05:36,330
Tom Riley: view. One, the report basically said, look, racing is an
103
00:05:36,330 –> 00:05:41,368
Tom Riley: exception. It’s different to AFL, it’s different to NRL in terms of its relationship
104
00:05:41,369 –> 00:05:45,990
Tom Riley: with wagering. Those sports have really embraced wagering recently, as
105
00:05:45,990 –> 00:05:49,890
Tom Riley: a source of revenue and sponsorship, whereas racing, you can
106
00:05:49,890 –> 00:05:52,589
Tom Riley: go back to the histories of horse racing and wagerings been
107
00:05:53,130 –> 00:05:57,570
Tom Riley: a component of it. So the report acknowledged this and
108
00:05:57,570 –> 00:06:00,479
Tom Riley: said there should be an exemption for racing. So from
109
00:06:00,480 –> 00:06:04,529
Tom Riley: a racing perspective, it’s important that that exemption, that carve
110
00:06:04,529 –> 00:06:08,159
Tom Riley: out, is significant enough so that we don’t see issues
111
00:06:08,190 –> 00:06:11,070
Tom Riley: there being, let’s say, a form guide in the newspaper
112
00:06:11,070 –> 00:06:13,650
Tom Riley: in Sydney or Melbourne. So that’s one area that we’re
113
00:06:13,650 –> 00:06:16,649
Tom Riley: speaking to government about.
And the other one, which has a
114
00:06:16,650 –> 00:06:22,200
Tom Riley: real direct financial potential impact is around what the report
115
00:06:22,200 –> 00:06:26,309
Tom Riley: called inducements, or what bookmakers might call generosity. So if
116
00:06:26,309 –> 00:06:29,759
Tom Riley: you’ve got a Sportsbet or a Ladbrokes account and you’re having
117
00:06:29,759 –> 00:06:32,640
Tom Riley: a bet in the Melbourne Cup today, there’s a chance
118
00:06:32,969 –> 00:06:35,639
Tom Riley: that whichever bookmaker you are with might have an offer
119
00:06:35,639 –> 00:06:39,060
Tom Riley: where if your horse runs second, you might get a
120
00:06:39,060 –> 00:06:41,940
Tom Riley: bonus bet back. So the report called for all of
121
00:06:41,940 –> 00:06:48,330
Tom Riley: those generosities to be canceled. Now, one immediate issue for
122
00:06:48,330 –> 00:06:51,089
Tom Riley: the racing industry is that all of those, let’s say
123
00:06:51,509 –> 00:06:54,900
Tom Riley: if you looked at free bets or bonus bets, all
124
00:06:54,900 –> 00:06:57,960
Tom Riley: of those bets get taxed by the racing industry. So
125
00:06:58,020 –> 00:07:00,120
Tom Riley: a levy is paid to the racing industry on those,
126
00:07:00,270 –> 00:07:02,970
Tom Riley: and they also get taxed by state governments. And with
127
00:07:02,970 –> 00:07:07,019
Tom Riley: all state governments across the country, a proportion of that
128
00:07:07,020 –> 00:07:10,620
Tom Riley: tax take from racing, goes back to the industry. So
129
00:07:10,920 –> 00:07:13,500
Tom Riley: if those were removed, it would be a financial hit
130
00:07:13,500 –> 00:07:14,040
Tom Riley: to racing.
131
00:07:14,820 –> 00:07:18,180
Sean Aylmer: Okay. The other issue, which we often hear a fair
132
00:07:18,180 –> 00:07:20,550
Sean Aylmer: bit about on a day like today, is the welfare
133
00:07:20,550 –> 00:07:23,849
Sean Aylmer: of horses. And we’ve had some unfortunate incidents in recent
134
00:07:23,849 –> 00:07:27,299
Sean Aylmer: years in the Melbourne Cup. It’s a perennial. Is the
135
00:07:27,299 –> 00:07:30,059
Sean Aylmer: industry getting better at looking after horses once they’re no
136
00:07:30,059 –> 00:07:30,720
Sean Aylmer: longer racing?
137
00:07:31,350 –> 00:07:34,560
Tom Riley: Yeah, definitely. So the welfare of horses is certainly an
138
00:07:34,560 –> 00:07:38,760
Tom Riley: area that I think everyone in racing is really committed
139
00:07:38,760 –> 00:07:42,899
Tom Riley: to. And across the country, each racing authority is putting
140
00:07:42,900 –> 00:07:45,960
Tom Riley: aside a percentage of all the money that comes into
141
00:07:45,960 –> 00:07:48,929
Tom Riley: the industry for welfare. And this amounts to tens and
142
00:07:48,959 –> 00:07:53,490
Tom Riley: tens of millions of dollars across the country each year. And
143
00:07:53,700 –> 00:07:56,340
Tom Riley: there’s some great programs. Just the other day, Racing Queensland
144
00:07:56,340 –> 00:07:59,790
Tom Riley: announced a safety net. So any thoroughbred that essentially gets
145
00:07:59,790 –> 00:08:03,120
Tom Riley: into trouble in retirement, they will come on and take
146
00:08:03,120 –> 00:08:06,029
Tom Riley: over responsibility for that horse, and there’s been some great
147
00:08:06,029 –> 00:08:08,970
Tom Riley: work done. And I think that ideas like that, the
148
00:08:08,970 –> 00:08:11,490
Tom Riley: safety net, I think will become national ideas very soon,
149
00:08:11,790 –> 00:08:14,429
Tom Riley: and that will really help the industry and give confidence
150
00:08:14,429 –> 00:08:17,250
Tom Riley: to everyone that we’re not just committed to looking after
151
00:08:17,250 –> 00:08:20,430
Tom Riley: our horses while they’re in the industry, while they’re racing,
152
00:08:20,880 –> 00:08:21,810
Tom Riley: but afterwards too.
153
00:08:22,500 –> 00:08:24,750
Sean Aylmer: Okay. So where are the big opportunities for racing in the
154
00:08:24,750 –> 00:08:26,370
Sean Aylmer: next five, 10 years then?
155
00:08:26,790 –> 00:08:30,180
Tom Riley: Yeah, so two key things really. I think international investment
156
00:08:30,660 –> 00:08:35,280
Tom Riley: is huge and is getting bigger. So the biggest investor,
157
00:08:35,280 –> 00:08:38,368
Tom Riley: the biggest recent investor in the thoroughbred industry, is a
158
00:08:38,370 –> 00:08:42,899
Tom Riley: Chinese billionaire called Yuesheng Zhang. And Mr. Zhang has more
159
00:08:42,900 –> 00:08:46,230
Tom Riley: than 150 horses running around Australia, which he owns himself.
160
00:08:47,190 –> 00:08:52,050
Tom Riley: He’s got 600 broodmares, mostly based in Victoria on his farms
161
00:08:52,050 –> 00:08:55,830
Tom Riley: there. We’re seeing a wave of international investment. I mentioned
162
00:08:55,830 –> 00:08:58,799
Tom Riley: earlier on that Australia’s seen as a leader. There’s good
163
00:08:58,799 –> 00:09:01,500
Tom Riley: prize money here, there’s a good funding model here, and
164
00:09:01,500 –> 00:09:04,650
Tom Riley: we’re seeing increasing numbers of owners from overseas come and want to
165
00:09:05,250 –> 00:09:08,520
Tom Riley: race horses here and be involved here.
So international investment
166
00:09:08,520 –> 00:09:11,400
Tom Riley: is one area, and the second is the growth in
167
00:09:11,400 –> 00:09:15,540
Tom Riley: ownership. So the availability of people to come and take
168
00:09:15,540 –> 00:09:17,910
Tom Riley: a share in a horse and really be part of
169
00:09:17,910 –> 00:09:22,230
Tom Riley: something, which, if you’re a footie fan, you can go
170
00:09:22,230 –> 00:09:24,900
Tom Riley: and watch your team. But if you are involved in
171
00:09:25,350 –> 00:09:29,130
Tom Riley: ownership, you can actually go and own a part of
172
00:09:29,130 –> 00:09:32,280
Tom Riley: a horse and actually be involved in the conversations, know
173
00:09:32,280 –> 00:09:34,889
Tom Riley: where it’s going to race, have those conversations with trainers,
174
00:09:34,889 –> 00:09:36,809
Tom Riley: be there when the jockey’s getting legged up and getting
175
00:09:36,809 –> 00:09:40,200
Tom Riley: the instructions. And more and more people are wanting to
176
00:09:40,200 –> 00:09:42,390
Tom Riley: get involved that way. And I think that’s something that’s
177
00:09:42,390 –> 00:09:45,570
Tom Riley: really special in Australia.
If you looked, you mentioned the
178
00:09:45,570 –> 00:09:48,150
Tom Riley: Everest earlier on, the horse that won the Everest was
179
00:09:48,150 –> 00:09:53,399
Tom Riley: bought for $70, 000 and he has now won an excess
180
00:09:53,400 –> 00:09:57,030
Tom Riley: of 10 million. So for those people who bought their 5% in
181
00:09:57,030 –> 00:10:00,480
Tom Riley: that horse they’re well in front and having the time
182
00:10:00,480 –> 00:10:01,410
Tom Riley: of their lives, I’m sure.
183
00:10:01,950 –> 00:10:03,809
Sean Aylmer: So who’s going to win the Melbourne Cup today Tom?
184
00:10:04,320 –> 00:10:09,059
Tom Riley: Okay, simple one. So the favorite Vauban, everyone who I
185
00:10:09,059 –> 00:10:12,090
Tom Riley: speak to who is a serious student of form tells
186
00:10:12,090 –> 00:10:15,059
Tom Riley: me he will just win, but he’s very short odds.
187
00:10:15,059 –> 00:10:17,670
Tom Riley: So if I was giving a tip to the listeners,
188
00:10:18,030 –> 00:10:19,890
Tom Riley: I would suggest a little each way bet on a
189
00:10:19,890 –> 00:10:23,910
Tom Riley: horse called Ashrun. And he’s trained by Ciaron Maher who’s
190
00:10:23,910 –> 00:10:26,250
Tom Riley: an expert at this, he trained the winner last year.
191
00:10:26,790 –> 00:10:29,338
Tom Riley: Yeah. So he’ll be about $ 40 or thereabouts.
192
00:10:29,760 –> 00:10:31,920
Sean Aylmer: Fantastic. Tom, thank you for talking to Fear and Greed.
193
00:10:32,280 –> 00:10:33,059
Tom Riley: Thank you for having me on.
194
00:10:33,690 –> 00:10:36,960
Sean Aylmer: That was Tom Riley, CEO of the Thoroughbred Breeders Association.
195
00:10:36,960 –> 00:10:38,848
Sean Aylmer: Join us every morning for the full episode of Fear
196
00:10:38,849 –> 00:10:42,900
Sean Aylmer: and Greed, Australia’s best business podcast. I’m Sean Aylmer. Enjoy
197
00:10:42,900 –> 00:10:43,260
Sean Aylmer: your day.