12 Oct 2010

Backing a different horse - the new Racing Queensland Limited

by Tony Rein, Joanne Kleydish

Queensland has a new racing control body, Racing Queensland Limited.

Queensland's three previous racing control bodies for thoroughbred, harness and greyhound racing were amalgamated into one newly established control body, Racing Queensland Limited, on 1 July 2010.

The Racing and Other Legislation Amendment Act 2010 amended the Racing Act 2002, the Wagering Act 1998, the Gaming Machine Act 1991 and various other acts and regulations to create Racing Queensland Limited.

The new control body is now up and running and the Constitution of Racing Queensland Limited has been released. All eyes are now on the changes this new control body will make and what impact these changes will have on the racing industry in Queensland, particularly in relation to prize money, funding and redevelopment of racing clubs and country racing.

A new advisory board

The Constitution of Racing Queensland Limited ensures that an advisory board for country racing is established (the Country Racing Committee) which is made up of various country racing associations. The purpose of this committee is to:

  • monitor and advise Racing Queensland Limited on the performance of country racing clubs; and
  • consider submissions made by the associations and advise Racing Queensland Limited in relation to funding, prize money distributions and race date allocations for country racing.

While this provides some comfort to the country racing community, how effectively this advisory board will be able to protect country racing is yet to be seen.

Racing industry concerns

There was considerable industry concern and outrage when the legislation was introduced and passed in Parliament given that the legislation received only limited industry consultation before it was introduced. With the changes being described as "rammed through Parliament" the main industry concerns associated with these legislative changes were that:

  • industry consultation on the new legislation was restricted to chairs and chief executive officers of control bodies who were set to gain from appointment to Racing Queensland Limited's Board;
  • there was no industry input on director selection or appointment, the Chairman and new board of Racing Queensland were not elected (and not accountable to shareholders), and the tenure for these directors increased to an minimum initial period of four years;
  • harness and greyhound racing would be the poor cousins of thoroughbred racing due to an imbalance in the board;
  • country racing would not be protected; and
  • the new control body would take over club operations and would effectively take the club's assets for no cost.

Why the Queensland Government introduced these changes

The Government introduced these legislative changes following a $80 million pledge to the industry under a capital works project introduced by the Bligh Government.

As described in the explanatory notes to the Racing and other Legislation Amendment Act 2010, the changes were introduced with the purpose of:

  • providing a coordinated approach to, and enabling the payment of the $80 million pledged by the Bligh Government for the Racing Industry Capital Development Scheme, for racing industry capital works projects (derived from a racing industry levy of 50% of net wagering tax collected) and ensuring that the money delivers the best possible outcomes for the entire Queensland racing industry;
  • protecting $60 million worth of publicly owned land assets that the Government transferred to freehold ownership for individual race clubs in the last decade, with the new legislation preventing race clubs from disposing of the assets for their own benefit;
  • ensuring sustainability for the industry as a whole by sharing resources and reduce administration costs by replacing the three previous control bodies;
  • providing stability within the new control body structure by appointing the five current directors from the previous thoroughbred control board and one from each of the previous harness and greyhound control bodies who will hold office for an initial period of four years, with two required to step down and stand for re-appointment every two years; and
  • protecting jobs of the previous control body employees who are not receiving more than $100,000 per year, by offering employment on terms and conditions that are equivalent to their current terms and conditions.

The success of the legislative changes in meeting the stated objectives for the racing industry in Queensland remains to be seen. Clayton Utz continues to follow developments.

 

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.