2020 ANNUAL REPORT CONTENTS

Victorian Thoroughbred Racing by the Numbers 4 Chairman’s Report 6 CEO Report 9 Member Stakeholders 12 Strategic Framework 13 Racing and Programming 15 Racing Snapshot 18 Prizemoney 21 Owners and Breeders 22 Participants 23 Equine Welfare 25 Integrity 29 Infrastructure 32 Community 34 Diversity and Inclusion 36 Clubs 37 Wagering 40 Media 42 Racing.com 44 Investments and Industry Sustainability Fund 46 Directors’ Report 48 Lead Auditor’s Independence Declaration 62 Independent Auditor’s Report 63 Directors’ Declaration 66 Consolidated Statement of Surplus or Deficit and Other Comprehensive Income 67 Consolidated Statement of Financial Position 68 Consolidated Statement of Cash Flows 69 Consolidated Statement of Changes in Equity 70 Notes to the Financial Statements 71

Racing Victoria Limited ACN 096 917 930 Annual Report for the financial period ended 30 June 2020

2 3 VICTORIAN THOROUGHBRED RACING BY THE NUMBERS VICTORIAN THOROUGHBRED RACING BY THE NUMBERS

ECONOMIC IMPACT ECONOMIC BENEFIT TO VICTORIA IN REGIONAL AREAS $3.20 $1.55 BILLION BILLION

PRIZEMONEY TOTAL WAGERING EQUINE WELFARE & BONUSES PAID TURNOVER COMMITMENT JOCKEYS FULL-TIME STABLE EQUIVALENT JOBS EMPLOYEES $251 $7.1 $25 MILLION BILLION MILLION 271 25,157 3,408

RACE MEETINGS RACETRACKS INDIVIDUAL TRAINERS RACES COMPETING HORSES OWNERS 540 67 4,367 8,761 72,249 953

4 5 CHAIRMAN’S REPORT CHAIRMAN’S REPORT

I commend to you Racing Victoria’s 2020 Annual This has been a remarkable achievement by our carnival would make the difference in relation to Report which provides a comprehensive overview industry and I want to acknowledge the efforts of crowds being able to attend. of our performance across the 12 months ending every single person within Victorian racing and 30 June 2020, as well as an update on the overall thank them for their dedication, cooperation and Through prudent management and the successful health of the Victorian thoroughbred racing understanding. continuation of racing under strict biosecurity industry. protocols, RV has reported a net operating surplus I also want to particularly thank our 72,249 owners of $10.7 million. This report details an extraordinary year for our who have missed out on the opportunity to see sport, with two contrasting periods, prior and post their horse in the flesh since March. You have This comes despite the impacts of COVID-19, the the commencement of the COVID-19 pandemic in maintained your investment in the sport and, as a payment of record prizemoney and the distribution March 2020. result, kept people in work right across the state of additional club funding support to help our 69 and enabled our equine athletes to receive the care Clubs in their time of need. This remains a challenge like no other. It has and attention they deserve. Your loyalty has been brought many industries to a halt throughout greatly appreciated by all. That surplus was underpinned by better than Victoria, including other professional sports. We’ve expected wagering performance throughout the also seen its impact more broadly, with racing Whilst we were able to continue racing in Victoria, final quarter of FY20, as customers turned to racing Brian Kruger stopped for extended periods in most international it wasn’t without pain. Racing Victoria had to stand in the absence of other sports and entertainment Chairman jurisdictions from Asia to Europe. down 40% of our workforce for an extended period, options both here and abroad. whilst our Racing Clubs were forced into more Our objective from the start was to protect the dramatic shutdowns. The initiative to work with the Seven Network to health of industry staff, participants, and the wider deliver a national free-to-air broadcast over nine community, maintain 25,000 full-time equivalent Our participants shared the load too, with consecutive weekends in May and June 2020, jobs and ensure daily care and exercise can be temporary reductions in prizemoney from April reaching over 830,000 people every Saturday, was afforded to all thoroughbred racehorses. through until the conclusion of the 2019-20 racing particularly successful. season in July. These were unchartered waters that required This valuable partnership with the Seven Network difficult decisions to be made from day one. However, we were still able to pay record has been extended since the conclusion of Beyond the Government directives and guidelines, prizemoney for the financial year with significant FY20 with a five-year agreement to continue we moved quickly to introduce a series of strict increases, ranging from country minimums through broadcasting Racing.com on Channel 78 and to biosecurity protocols which included an immediate to the 2019 Lexus Melbourne Cup, delivered across showcase 21 premium racedays annually on their ban on owners, members and the public attending the first three quarters of the year. main channels until 2025. race meetings, stables and trackwork. One of the great challenges the pandemic The enhanced engagement with Victorian racing Temperature tests and health screening became presented was an enormous degree of uncertainty throughout the pandemic extends beyond our the norm. Training centres were locked down and that made planning for the immediate future and wagering results and free-to-air broadcasts interstate travel restrictions imposed. Field sizes FY21 extremely challenging. to Racing.com’s digital platforms, which have and the number of races were capped, and trials witnessed record numbers and growth throughout cancelled. Riders were segregated into teams The 2020 Spring Racing Carnival was an important the year. and a ‘bubble’ introduced on racedays to keep case in point. There was considerable debate participants free of potential risks. throughout the end of FY20 regarding the structure Putting COVID-19 to one side, a primary focus and timing of our showpiece event, together with throughout FY20 was on enhancing our equine Through the diligence of all within Victorian the prizemoney to be offered. welfare program and ensuring the ongoing integrity racing and the incredible support of the Victorian of the sport. Government, led by Minister for Racing Martin The views were many and varied, but one thing that Pakula, we have been able to safely and successfully was common was the passion for our greatest races In July 2019, we launched a new three-year equine continue racing and training throughout the and the desire for them to shine. welfare strategic plan focused on outcomes before, pandemic. during and after racing. Post-racing wellbeing The Board ultimately decided that any case for garnered national attention months later off major change did not outweigh the benefits of the back of media reports into the activities at retaining the existing structure, particularly with interstate abattoirs and knackeries. the uncertainty around whether pushing back the

6 7 CHAIRMAN’S REPORT CEO REPORT

In October 2019, we committed to accelerate the Our achievements over the past 12 months would I’m pleased to provide an overview of how Racing implementation of our strategic plan through a not have been possible without the valuable Victoria and the Victorian thoroughbred racing minimum $25 million spend across three years and commitment that each and every participant industry performed in the 2019-20 financial have got to work on achieving that. makes, and I want to thank them for their passion year (FY20). and dedication. Our internal equine welfare team was boosted; Victorian thoroughbred racing has successfully audits performed to gain a better understanding On behalf of the Board, I also want to thank our navigated through two contrasting periods prior of horse movements; welfare checks conducted on Chief Executive Giles Thompson, his executive team and post the commencement of the COVID-19 close to 1000 current and retired racehorses; our and all the staff who have worked tirelessly in the pandemic in March 2020. Off The Track program expanded and the RESET best interests of the industry throughout the year. program introduced for those retired racehorses The first period’s challenge was to continue who have struggled to transition to a second I also wish to thank Martin Pakula and the Victorian with increased investment in the industry while home; and an independent advisory council has Government for their unwavering faith in the economic and wagering softness prevailed. This been formed. thoroughbred racing industry which is a valuable was then taken over by the all-encompassing focus contributor to the state of Victoria delivering over on ensuring the very survival of the sport as the FY21 will see the rollout of a foster program $3.2 billion in annual economic benefit and the world shut down. for thoroughbreds in need; an on-site humane equivalent of 25,000 full-time jobs. Giles Thompson euthanasia program to reduce unnecessary Chief Executive Officer It is therefore with great pride that, in the face of suffering; as well as an online post-racing platform As an industry, we are set to face a number of the COVID-19 challenge, not only have we kept to better track horses once they leave racing. challenges in the 12 months ahead as we navigate racing, but we are in a strong position to thrive as the uncertainty that hovers due to COVID-19 and the community and economy seeks to recover. There is still much to be done though, particularly continue to deliver ongoing improvements in in our efforts to reduce catastrophic raceday equine and participant welfare, along with our We have been able to achieve a net operating injuries as the 2020 Melbourne Cup has shown with integrity reforms. surplus of $10.7 million, pay record prizemoney, the fatal injury sustained by international visitor provide additional club funding support and ensure Anthony Van Dyck. It will be a critical year for our funding streams with our key initiatives have been funded. the Government’s Point of Consumption Tax Review We will leave no stone unturned as we strive to due in December and expressions of interest being This surplus reflects an increase in total revenue understand why such incidents have occurred in called for the Victorian Wagering Licence by 2.7% to $447.8 million, whilst expenditure was our greatest race and what we can do to reduce beyond 2024. managed downwards by 1.8% in FY20. the risks in 2021 and beyond. Our equine limb injury prevention research program with the University of It’s also pivotal that we capitalise on the increased From a longer-term viewpoint, it was also pleasing Melbourne, which was extended for a further two engagement with Victorian racing throughout 2020 to grow our investments under managed funds by years in 2020, is one such initiative. to grow our future customer and employment base. 12.3% to $91.3 million. At the end of FY20, our net Our progress on equine welfare and integrity will asset position had risen to $154.3 million. The Fair Racing For All project, tabled in September be integral to this as we look to safely welcome 2019, is central to our efforts in the integrity space. members and fans back to the racetrack. The pandemic has hit our Racing Clubs particularly This project is aimed at improving voluntary hard and during the year we made special funding compliance to avoid major integrity breaches, and I can assure you that the Board, management and grants totalling $12 million to metropolitan and promoting a responsible culture of fair play, ethical staff at Racing Victoria will be doing our best to country Clubs. behaviours and respect. maintain Victoria’s position as one of the leading racing jurisdictions in the world, both on and Further significant financial support of $20 million The initial focus points have been on enhanced off the track. has been committed post year-end to support licensing standards and compulsory personal Clubs through the 2020 Spring Racing Carnival development for our participants, the latter period in the absence of crowds and to retain gathering momentum with the rollout of a new feature prizemoney pools. online learning technology in the second half of 2020. Total prizemoney paid directly by RV grew to Brian Kruger $229.2 million – a 4.6% increase year-on-year and a Chairman 52% increase since the 2014-15 financial year. Across the industry, with Club top-ups included, total prizemoney and bonuses won in Victoria was $251 million, representing growth of 6.2% on FY19.

8 9 CEO REPORT CEO REPORT

In addition to prizemoney increases, RV announced However, in the last quarter we saw a resurgence in During COVID-19 Victorian racing welcomed Finally, I want to thank racing fans for their on- a significant commitment of $25 million across wagering turnover due to limited other professional significant increases in free-to-air and digital going support of Victorian thoroughbred racing three years to support the acceleration and sport in Victoria, the significant reduction in engagement due to the unique situation and acknowledge our Clubs, participants and expansion of the industry’s equine welfare competing entertainment options and the broad that COVID-19 presented broadcasters and stakeholders for their sustained contribution and strategic plan. all-channel distribution of our racing. Wagering media partners. resilience throughout one of the sport’s most turnover grew 17.8% during the period from March testing years. This commitment is being partially enabled to June 2020. Whilst there has been many highlights through an increase in equine welfare prizemoney throughout FY20, the future impacts of the contributions from owners and participants from 1% This turnover performance did not lead to full year COVID-19 pandemic remain unclear and thus to 2% as of 1 January 2020. wagering revenue growth which ultimately fell a cautious fiscal approach will continue to be 2.4% to $355.6 million as the COVID-19 period was taken during FY21 to help protect the Key projects included increasing the resourcing significantly impacted by retail closures affecting long-term health and sustainability of the Giles Thompson capacity of our dedicated in-house equine welfare the Victorian TAB Joint Venture. Victorian racing industry. Chief Executive Officer taskforce; traceability and data audits; and identifying, evaluating and building new programs While we continue to evolve our racing products To that end, we are grateful for the support and initiatives. This work will allow for further year-on-year, it was a very different look and feel the Victorian Government has provided us major investments in equine welfare in FY21 as for the second running of the fan voted, throughout the pandemic, headlined by momentum continues to build. The All-Star Mile at Caulfield this year, with $16.6 million in COVID-19 emergency support spectators precluded from attending due funding in May 2020. As a consequence of COVID-19 restrictions, our to the onset of COVID-19. infrastructure expenditure dropped from $22.4 These funds were specifically directed towards million to $15.6 million in FY20, a 30.3% decrease. This did not quash enthusiasm for the race, as the sustaining returns to participants via prizemoney; The decline comes off the back of a spike in activity field size was raised to 15, with 10 Group 1 winners securing jobs within the industry; maintaining in the prior year and reflects the postponement of a amongst the starting line-up. West Australian-based participant and animal welfare standards; and number of project works. horse Regal Power was victorious in the $5 million providing Clubs with on-going financial support to race, earning owner ambassador and young maintaining their viability. However, before the onset of COVID-19, we saw the mother Tegan Abercrombie a life-changing Warrnambool Racing Club complete a significant $250,000 windfall. To summarise, we enter FY21 with remaining upgrade to its Matilda Room. The $5.8 million uncertainty, and it is important that we continue extension included upgrades to the kitchen bar, With no crowds permitted at race meetings from to strike a balance around continued investment viewing deck, the ground floor cafeteria and 13 March 2020 until the conclusion of the 2019-20 in our industry to promote growth and engagement presentation bar. racing season, attendance figures were down on while ensuring we take a measured approach the 2018-19 racing period by 27.8%. to the financial management of Victorian Additionally, a new grass training track was thoroughbred racing. developed at Cranbourne, which is currently However, before COVID-19 restricted spectators consolidating and expected to be opened in late at racetracks, Victorian thoroughbred racing was On that, I want to recognise the support and autumn 2021. The centre’s synthetic track has also well supported with just over one million people guidance afforded by our Chairman, Brian Kruger, been upgraded, with a replacement surface laid. attending race meetings across the season. and our Board of Directors, as we implemented a range of new strategies and policies to secure the We also continued our focus on participant support All of our Clubs, both metropolitan and country, future of the sport whilst facing the ramifications of in FY20, with $25.1 million directed towards should be commended for their efforts to keep the COVID-19 pandemic. jockey ride fees, jockey WorkCover, workforce racing going during the COVID-19 pandemic. By development and welfare initiatives. the end of October 2020, Victoria had conducted I’m also profoundly grateful for the work my over 300 race meetings and 2,500 races under executive team and the wider Racing Victoria Total wagering turnover on Victorian racing grew biosecurity protocols. staff have undertaken in trying circumstance, by 1.1% to a record $7.1 billion in FY20 with very with many stood down or placed on reduced different stories pre and post pandemic. Work also continued on showcasing Victorian hours in response to the financial impact thoroughbred racing to a wider audience with COVID-19 presented the organisation. Up to March, wagering was soft due to declining investment in media services up 0.6% to $43.2 consumer confidence and to wagering operators’ million and media revenues up 5.4% to $53 million responses to the Point of Consumption Tax which off the back of digital streaming agreements. included reduced promotional investment.

10 11 MEMBER STAKEHOLDERS STRATEGIC FRAMEWORK

Racing Victoria is a public company limited by guarantee which was established in 2001 to provide Racing Victoria’s Strategic Framework has been developed in consultation with key stakeholders, providing independent governance of the Victorian thoroughbred racing industry. consideration to the current state of the industry and some of the longer-term issues and opportunities impacting the sport in Victoria, while outlining a path for future growth and success. Our objectives are to develop, encourage, promote and manage the conduct of thoroughbred racing by encouraging broad participation and sustainably growing the industry’s economic and social value. OUR VISION: OUR PURPOSE: Racing Victoria has 14 constituent members comprising: “RACING FOR ALL” To champion great horse racing in Victoria More people, more often, and lead a financially sustainable thoroughbred engaging and enjoying our sport. racing industry. CLUB MEMBERS

OUR STRATEGIC FRAMEWORK IS BUILT ON FIVE KEY ELEMENTS TO DELIVER SUCCESS:

CO N T G HE HORSE E IN T N R T E & G M A E W ANT W D ICIP ELF I THE BEST RACING RT AR A PA E Delivering our Sport P G A N R I E S T C & A I INDUSTRY BODY MEMBERS M N W F C E E E M L L I L L T P Y A E B A NTER E R C U S P N THE CUSTOMER I X N G T E G O S

Why we're here R

P

S F E A R Q N E N U S T H W I O N N O E Y E N T M I THE RIGHT TO EXIST E OUR VALUES W E R ST G E Y A G Non-negotiables L G E How the business F EN T A N R I E behaves IN C F Y O R T A I L S S S L T B R A R U E B U L V THE ENABLERS O CT C I R UR D A E & What we need T T IO N N LE TA

WE HAVE IDENTIFIED FIVE KEY PRIORITY AREAS OF FOCUS

Customer growth and Delivering Strengthening Maximising our Living and deeper engagement the best racing participant and equine key enablers breathing our welfare and integrity values The United Workers Union was formally admitted as a Member of Racing Victoria on 16 September 2020 upon submitting evidence of the amalgamation of United Voice and the National Union of Workers to form the United Workers Union effective 11 November 2019 and requesting that the United Workers Union be admitted as a Member of Racing Victoria in lieu of and as a successor to United Voice.

12 13 RACING AND PROGRAMMING

A total of 4,367 races were conducted across 540 Any fears that the Cox Plate might lose its lustre race meetings during the 2019-20 racing season, in the post-Winx era were thus swiftly put to rest ending on 31 July 2020, with 80% of those held by Lys Gracieux’s imperious victory, which earned outside metropolitan Melbourne. her connections $5 million – including a bonus of $2 million. If that win was comfortable, however, Vow And Declare’s triumph in the most open Lexus THE 2019 SPRING RACING CARNIVAL Melbourne Cup for 100 years was anything but.

There were surprise results aplenty in the early Finche was sent off the $8.50 favourite in the stages of the 2019 Victorian Spring Racing Carnival, ‘race that stops a nation’, representing the longest which incorporated 132 race meetings, 21 Group 1 starting price for a favourite in more than a century; races and 26 Country Cups across three months of but it was Vow And Declare who ultimately elite action. prevailed in a titanic battle with international raiders down the famous Flemington straight, giving both In the Group 1 Makybe Diva Stakes at Flemington, jockey Craig Williams and trainer Danny O’Brien Gatting caused a $101 upset under a fine ride from their first victory in the Melbourne Cup. Jamie Kah, who was registering her second win at the elite level. Then Black Heart Bart rolled back Less than two lengths separated the top eight the years in another Group 1 race, the Underwood finishers, and there was even time for a dramatic Stakes, at the same starting price ($101) as his post-script when the Joseph O’Brien-trained Master fellow Western Australian Gatting. Of Reality – ridden by arguably the world’s most famous jockey in Frankie Dettori – was demoted Thereafter Japanese raiders came to the fore, firstly from second to fourth place on protest. with Mer De Glace becoming the second winner of the Stella Artois Caulfield Cup to emerge from Vow And Declare’s win was the first by an that proud horse racing nation. Having completed a Australian-bred horse since Shocking in 2009, highly successful riding stint in Japan earlier in the and proved that the locals still had what it takes to year, which included a Group 3 victory on Mer De repel the international challenge in Australia’s most Glace, Damian Lane resumed his partnership with iconic race. the four-year-old and the pair surged clear of their rivals in the home straight to justify favouritism. 2020 FESTIVAL OF RACING Lys Gracieux also started the warm favourite in the 99th edition of Australasia’s weight-for-age The early part of the 2020 Festival of Racing was championship, the Ladbrokes Cox Plate, a race dominated by David Vandyke’s cult hero Alligator which in previous years had been dominated by Blood, who proudly flew the flag for Queensland four-time winner Winx. during his time in Victoria.

Again Lane was in the saddle, and if anything the After a heartbreaking defeat in the 2019 Caulfield mare’s victory was even more impressive as she Guineas to Super Seth, Alligator Blood returned added the Cox Plate to the Group 1 Takarazuka to Melbourne in the autumn and stamped his class Kinen she had claimed on home soil prior to with victory over Kiwi Catalyst in a gripping renewal arriving in Australia. After returning home to of the Group 3 CS Hayes Stakes at Flemington. Japan, Lys Gracieux promptly claimed the Group 1 Arima Kinen – the race on which The All-Star Mile The pair clashed again a fortnight later in the Group is modelled – by five lengths to end the year with 1 Australian Guineas, and this time Alligator Blood an international rating of 126, just two shy of the came out comfortably on top to claim his debut win world’s highest-rated mare Enable. at racing’s highest level.

14 15 RACING AND PROGRAMMING RACING AND PROGRAMMING

Other Festival of Racing highlights included CBD, and it was Tegan Abercrombie who was behind Alligator Blood in the public count and ATTENDANCE Tagaloa’s victory in the Ladbrokes Blue Diamond celebrating after Western Australian raider Regal subsequently running third behind Regal Power and Stakes at Caulfield, ensuring a first Group 1 victory Power – one of five All-Star Mile wildcards – just got Superstorm on raceday. With crowds not permitted at race meetings from in Australia for the partnership of Trent Busuttin his head down on the line in a scintillating finish to 13 March 2020 until the conclusion of the 2019- and Natalie Young. the $5 million race. Regal Power’s victory also helped him claim the 20 racing season, attendance figures were down Champion Middle Distance prize in the 2020 27.8% on the previous season. However, before Godolphin sprinter Bivouac was also a dominant Regal Power’s win earned Ms Abercrombie Australian Racehorse of the Year awards, finishing the COVID-19 pandemic led to restrictions on winner of the Group 1 Newmarket Handicap at $250,000, a life-changing sum of money which she equal first with Fierce Impact – who came fourth in spectators at racetracks, thoroughbred racing Flemington, whilst the Lindsay Park training put to good use by investing in a house, a new car The All-Star Mile. in Victoria had been very well supported with team of David Hayes, his son Ben and nephew and a holiday with her young son Tyler. 1,000,565 people attending race meetings across Tom Dabernig capped off another successful the season. festival with victory in the Group 1 Australian Cup The result was also a notable achievement for OTHER INITIATIVES for Fifty Stars. Regal Power’s owner-breeder Bob Peters and the training partnership of Grant and Alana Williams, The second running of the Jericho Cup in FIELD SIZES who quinellaed the world’s richest mile race with December 2019 saw Ablaze confirm his status as THE ALL-STAR MILE Superstorm chasing the winner home. Australia’s most versatile horse, having previously A primary business objective is to maximise field won the JJ Houlahan Hurdle over the fences at sizes to stimulate the growth of wagering and The second edition of The All-Star Mile was held The race was also a success from a wagering Ballarat. He would later return to Warrnambool encourage competitive racing. This is achieved at Caulfield, with a very different look and feel to perspective, with more money wagered on the to add the Grand Annual Steeplechase and cap through continual refinement of the racing the inaugural edition which drew more than 16,000 All-Star Mile than any other race held at Caulfield a remarkable training performance by the Ciaron program to best suit the racing population and spectators to Flemington. with the exception of the 2019 Stella Artois Maher and David Eustace stable. needs of trainers. Caulfield Cup. Due to the early onset of the COVID-19 pandemic, For the first time last year, a ‘win and you’re in’ Metropolitan field sizes continue to be the highest the decision was taken by Racing Victoria and the The field for the 2020 All-Star Mile was increased race was staged in New Zealand in the lead-up to nationally at an average of 10.5 starters per race, Melbourne Racing Club to preclude spectators from to 15, with 10 Group 1 winners amongst the starting the Jericho Cup, and was won by Aigne. He was whilst country field sizes also sit above the national attending the raceday. line-up, and for the first time New Zealand residents joined on the plane over by fellow Kiwi Where Are average at 9.9 starters. Importantly, Victoria also were permitted to take part in the public vote. You, who finished third in the 4600m contest for maintained the lowest national average (13.3%) of Instead, connections of the runners and their his trainer Shaune Ritchie, the strapper for races featuring fewer than eight starters. corresponding owner ambassadors watched on a Kiwi racing fans put their votes to good use, multiple Group 1 winner Bonecrusher – trained large screen at a private function in the Melbourne with wonder mare Melody Belle finishing second by his father Frank.

16 17 RACING SNAPSHOT

(1 AUGUST 2 019 TO 31 JULY 2020)

2019-20 VICTORIAN RACING AWARD WINNERS

Scobie Breasley Medal Damien Oliver

Fred Hoysted Medal Danny O’Brien

Tommy Corrigan Medal Shane Jackson

Victorian Racehorse of the Year Nature Strip

Colin Alderson Rising Star Nick Ryan

Roy Higgins Medal Craig Williams

2019-20 PREMIERSHIP WINNERS

Metropolitan Trainer David and Ben Hayes and Tom Dabernig Wins 68

Metropolitan Jockey Craig Williams Wins 70(1)

Metropolitan Apprentice Michael Poy Wins 40

Victorian Trainer Ciaron Maher & David Eustace Wins 224(2)

Victorian Jockey Jye McNeil Wins 143(2)

Victorian Apprentice Will Price Wins 83

Country Trainer Ciaron Maher & David Eustace Wins 162(1)

Country Jockey Daniel Stackhouse Wins 120

Country Apprentice Will Price Wins 79

Picnic Trainer Troy & John Kilgower Wins 13

Picnic Jockey Maxwell Keenan Wins 23

Jumps Trainer Eric Musgrove Wins 10

Jumps Jockey Shane Jackson Wins 14

Note: Individual race dead heats are indicated within brackets.

18 19 RACING SNAPSHOT PRIZEMONEY

(1 AUGUST 2 019 TO 31 JULY 2020)

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Record prizemoney and bonuses of $251 million previous year – and an additional $8 million PARTICIPANT NUMBERS* was paid by the industry across FY20, which was invested across 63 Group and Listed races Individual Starters 9,020 9,010 8,957 8,749 8,780 8,827 8,754 8,820 8,808 8,761 represents a 52% increase in the prizemoney throughout the Spring Racing Carnival including levels since 2015. Of the total prizemoney offered increases to minimum prizemoney for all Group Individual Trainers 1,156 1,165 1,120 1,104 1,074 1,070 1,071 1,020 994 953 across the financial year, 61% was secured at race 2, Group 3 and Listed metropolitan races from Individual Jockeys 313 318 335 325 330 317 291 280 294 271 meetings held in metropolitan Melbourne whilst the Turnbull Stakes Day (5 October) to Seppelt Wines NUMBER OF MEETINGS CONDUCTED remaining 39% was won at country fixtures. Stakes Day (9 November): Country** 401 413 417 410 409 411 410 411 409 400 Metro 114 116 115 110 109 108 110 109 111 112 Victoria also strengthened its position as a national • Group 2 minimum: $300,000 – up 50% from Picnic 31 30 34 34 31 31 31 29 28 28 leader, with average prizemoney and bonuses on $200,000 in 2018 offer per race rising to more than $59,000 in FY20, Total 546 559 566 554 549 550 551 549 548 540 with an average of $482,000 on offer per race • Group 3 minimum: $200,000 – up 33% from NUMBER OF ABANDONED MEETINGS*** meeting. $150,000 in 2018 Country 31 26 13 18 12 14 13 15 19 19 Metro 2 1 2 1 1 2 3 0 0 4 In order to safeguard racing’s future after the onset • Listed minimum: $175,000 – up 46% from Total 33 27 15 19 13 16 16 15 19 23 of the COVID-19 pandemic, RV announced that $120,000 in 2018 the prizemoney offered at metropolitan meetings NUMBER OF TRANSFERRED MEETINGS would be reduced by 20% and at country meetings The lucrative bonuses on offer included a $1 million Country 51 41 42 46 48 42 43 16 21 28 by 10% for the final four months of the season. windfall claimed by connections of South Australian Metro 3 5 0 7 15 6 2 0 0 0 Despite these reductions, the prizemoney paid Dalasan, who ran in the Caulfield Guineas before Total 54 46 42 53 63 48 45 16 21 28 out in Victoria last season still represented a 6.2% winning the Group 3 Carbine Club Stakes on Derby NUMBER OF NIGHT MEETINGS increase on the levels offered in 2018-19. Day at Flemington. And thanks to the bonus paid to Country 0 5 15 13 20 26 41 37 39 38 the winner of the Ladbrokes Cox Plate, connections of Lys Gracieux left The Valley with a cheque for Metro 18 18 18 17 16 16 16 16 17 15 SPRING RACING CARNIVAL $5 million. Total 18 23 33 30 36 42 57 53 56 53 NUMBER OF SYNTHETIC MEETINGS Thanks to a collaboration between RV, the Victorian There were also significant investments made in Country 42 35 41 37 38 49 43 40 40 36 Government and the Victoria Racing Club, more Victorian racing’s regional racedays, with all country Metro 0 0 0 0 0 0 0 0 0 0 than $100 million in prizemoney and bonuses was cups benefitting from a prizemoney injection. For Total 42 35 41 37 38 49 43 40 40 36 on offer across the 2019 Spring Racing Carnival, an the first time, the Geelong Cup, Bendigo Cup and uplift of $18 million on the previous year’s figure. Cranbourne Cup were each worth $400,000, whilst NUMBER OF RACES prizemoney for the Ballarat Cup was also raised to Country** 3,189 3,251 3,301 3,202 3,223 3,301 3,313 3,304 3,295 3,245 For the first time the Melbourne Cup was worth $500,000. Metro 911 923 922 901 932 926 931 940 952 953 a total of $8 million – up from $7.3 million the Picnic 186 181 205 204 187 182 187 174 173 169 Total 4,286 4,355 4,428 4,307 4,342 4,409 4,431 4,418 4,420 4,367 NUMBER OF STARTERS Country 32,373 32,185 32,285 30,905 31,519 32,593 32,390 32,447 32,073 32,207 Metro 9,486 9,664 9,625 9,842 10,249 10,062 9,886 10,053 10,119 9,983 Picnic 1,254 1,070 1,201 1,209 1,159 1,233 1,219 1,176 1,160 1,144 Total 43,113 42,919 43,111 41,956 42,927 43,888 43,495 43,676 43,352 43,334 AVERAGE FIELD SIZES Country** 10.2 9.9 9.8 9.7 9.8 9.9 9.8 9.8 9.7 9.9 Metro 10.4 10.5 10.4 10.9 11.0 10.9 10.6 10.7 10.6 10.5 Picnic 6.7 5.9 5.9 5.9 6.2 6.8 6.5 6.8 6.7 6.8 Total 10.1 9.9 9.7 9.7 9.9 10.0 9.8 9.9 9.8 9.9

* Includes participants licensed in Victoria and visitors from out of state ** Includes TAB and non-TAB country meetings *** Includes full and partially abandoned meetings

20 21 OWNERS AND BREEDERS PARTICIPANTS

OWNERS BREEDERS APPRENTICE JOCKEY TRAINING PROGRAM during the 2019-20 race season, with second year apprentice Campbell Rawiller finishing on top of Ownership numbers increased again during The inaugural edition of the VOBIS Sires Guineas, RV’s Apprentice Jockey Training Program (AJTP) the leaderboard after the finale at Flemington. the 2019-20 racing season, with 72,249 people held on Victorian Owners and Breeders Raceday continued to go from strength to strength with Campbell, whose father Nash and uncle Brad are experiencing the thrill of owning a share in an at Caulfield in April 2020, was claimed by Florent, Bailey Kinninmont, Tianni Bognuda, Hannah Le both Group 1-winning jockeys, won four heats en active Victorian racehorse and reaping the benefits whose sire Fiorente won the 2013 Melbourne Cup. Blanc, Makisha Salter and Zoe Lloyd inducted into route to finishing 10 points ahead of his nearest afforded to them by the Victorian Owners’ Gold the program in early 2020. rival, Teo Nugent. Card (VOGC). Trained in Mornington by Tony Noonan and ridden by his son Jake, Florent showed a powerful finish The most recent intake continued the growing Our apprentice jockeys continue to enjoy success in In the light of the impact on raceday attendance to win by half-a-length from Leale, with the trend in Victoria’s jockey talent pool, with 65% of a highly competitive environment. caused by the COVID-19 pandemic, RV took the hot favourite (and subsequent Group 2 winner) apprentices in the AJTP now female. decision to extend the 2019-20 VOGC eligibility Affair To Remember back in third place. The The 2020 graduates are Lewis German, Teo Nugent, requirements into the 2020-21 racing season. This victory earned connections of Florent $230,950 Due to restrictions introduced in the wake of the Michael Poy and Thomas Stockdale, each of whom meant that regardless of whether an owner’s horse in prizemoney and bonuses, re-emphasising the COVID-19 pandemic, the AJTP transitioned to the has excelled during their four-year stint in the had been nominated to run in a Victorian race benefits of breeding and racing horses in Victoria. remote delivery of education and professional program. within the previous 18 months, all current cards development in partnership with the program’s remain active for the entire duration of the 2020-21 On the same day, Khoekhoe won the second edition various providers. Jockey coaches Darren Gauci racing season, which concludes on 31 July, 2021. of The Showdown with a devastating burst under and Alf Matthews continued to provide jump out PARTICIPANT WELLBEING jockey Fred Kersley. Trained in Ballarat by Matt and raceday mentoring, and facilitated remote race RV has also developed a three-year ownership Cumani, Khoekhoe cost just $50,000 at the 2019 riding reviews and mechanical horse skill sessions. STABLELINE is the independent 24/7 counselling and strategy aimed at reducing defection and increasing Inglis Melbourne Premier Yearling Sale and has support service available for licensed and registered engagement. To achieve these objectives, RV already earned more than $600,000 in prizemoney The RMBL Investments Apprentice Rising Star participants and their families. Through considerable designed and implemented the following two core and bonuses. Series was fiercely contested across 24 legs held promotion and increased sharing of educational deliverables: His sire, Turffontein, also produced Widgee Turf, the • Built new salesforce journeys to improve VOBIS pin-up boy who has accrued more than $1 communications with owners, which has resulted million in prizemoney and bonuses despite costing in a 9% increase in satisfaction in 2019-20 just $4,500. when set against the 2017 levels. When asked specifically whether RV’s communications Only horses which have been nominated for both kept owners informed, responses revealed that Super VOBIS and VOBIS Gold and are the progeny satisfaction levels had increased by 100% since of VOBIS Sires Stallions are eligible to compete 2017. in the VOBIS Sires Guineas (for three-year-olds) and The Showdown (for two-year-olds), worth • Developed an owner event strategy to recognise $500,000 and $1 million respectively. and reward owners for their contribution to Victorian racing. RV launched an event strategy tailored specifically to owners, with the overall satisfaction surrounding this strategy growing by 50%. In addition, the survey results showed a 37% increase in satisfaction with ownership ‘recognition’ since 2017.

22 23 PARTICIPANTS EQUINE WELFARE

information, STABLELINE has seen a gradual the 2020-21 racing season. In order to balance The industry supported three-year Equine Welfare This increased financial commitment by the increase in the number of people using the service. the calendar, Wednesday afternoon meetings Strategic Plan was accelerated and expanded industry has allowed for an effective, sustainable will revert to Monday afternoons in the four in October 2019, with a minimum $25 million and tangible approach to the initiatives and Participants that have been identified, or have weeks of February 2021. A total of nine race-free commitment over the first three years of the programs implemented to support Victorian come forward, with heightened difficulties during Mondays have been programmed throughout action plan. racing’s equine welfare efforts now and, in the the COVID-19 pandemic have been lent additional December, January and March with Wednesday future, with a priority on the post-racing wellbeing support by the participant wellbeing team in twilights to be retained over the existing four- This was made possible courtesy of contributions of retired racehorses. conjunction with STABLELINE. month period. from the Industry Sustainability Fund and industry participants via a 2% prizemoney commitment to The Equine Welfare Strategic Plan commits RV to The RV Wellbeing Lounge returned to the Inglis • Under a two-month trial at Pakenham equine welfare - a rise of 1% from the previous a comprehensive welfare program comprising six Premier Yearling Sale in 2020, offering all attendees (Thursdays) and Cranbourne (Fridays), the finish racing season. distinct pillars: access to physiotherapist assessments and time for the nine night meetings from 1 April treatments, and the SiSu Digital Health check. This to 1 May, 2020 was standardised at the earlier health check can quickly, easily and non-invasively time of 9.30pm; while the remaining five night detect a range of whole health risk factors. meetings in the 2019-20 season throughout May VERNAN 1 GO CE ANDAR 2020 all finished at 9pm. & ST DS 2 . Y P WORKING WEEK R N D O T O Y P FEMALE JOCKEYS S I N U U T A L A A In March 2020, RV announced several major D M T T N I I U I initiatives linked to its ongoing review of the The percentage of female jockeys to ride a race C O . P S working week with the industry, including the winner rose from 60.6% in the 2018-19 racing 6 E N R Australian Trainers Association (ATA), Victorian season to 67.7% in the 2019-20 season. Jamie Kah Jockeys Association (VJA) and Racing Clubs. won two Group 1 races in 2019, firstly with the Lindsay Park-trained stayer Harlem in the Australian

Following consultation over many months with a Cup at Flemington in March, before she added the 5 . broad range of industry stakeholders on the racing Makybe Diva Stakes at Flemington in September I EQUINE WELFARE N C G U D and training schedule, RV devised the following courtesy of a fine ride on Gatting. After Linda N L U STRATEGIC PLAN I T initiatives on a trial basis to determine their impact Meech became the first female rider to win the S C U T A R R R on participant welfare, customer engagement and overall Victorian Jockeys’ Premiership in 2018-19, E . Y 3 industry funding: Kah is the early leader in the 2020-21 Victorian Metropolitan Jockeys’ Premiership. 4. G • Race-free week at season’s end. Over the next POSTRACIN O two racing seasons, RV will trial a race-free UTCOMES week at the conclusion of the racing season. MORE PARTICIPANTS There will be no race meetings or official trials CELEBRATING SUCCESS programmed in Victoria from Monday, 26 July 2021 to Friday, 30 July 2021. This trial will be The number of trainers recording a metropolitan repeated in July 2022. Saturday winner grew from 112 in the 2018-19 racing season, to 118 in 2019-20. That equates to 12.5% of • No racing on Christmas Eve. No race meeting Victorian trainers – an increase from 11.3% in the will be programmed on Christmas Eve in 2020 previous season. The percentage of stables that and 2021 to allow industry stakeholders a trained a winner also grew year-on-year, up from two-day break from racing, and enable them 51.6% to 53.0%. to gather with family and friends to celebrate Christmas. The two-year trial will determine its continuation beyond 2021, noting that Christmas Eve is scheduled on a Saturday in 2022.

• Increase in race-free days. A restructure of the calendar saw the total number of annual race- free days in Victoria increased from 15 to 17 in

24 25 EQUINE WELFARE EQUINE WELFARE

PILLAR 1 – GOVERNANCE & STANDARDS • Establishment of a standalone Equine Welfare until the full owner details, contact details, their • Global research and consultation was Hotline and online concern form; address and the address where the horse is undertaken to continue the evolution of our The objective of this pillar is setting up standards retired to is recorded; raceday and out of competition anti-doping and providing a structure of support and • Creation of an online portal to support horse strategy to not only enhance our detection governance that maximises welfare before, during owners during the summer bushfires and • Completed foal analysis of the 2015 crop, of Rules of Racing breaches, but also to help and after racing. COVID-19 pandemic. This included a statewide including publication of Barriers to entering prevent future transgressions. register of agistment opportunities. race training before four years of age for Key achievements include: thoroughbred horses born in the 2014 Australian foal crop by Meredith Flash et al. in 2020; PILLAR 4 – POST-RACING OUTCOMES • Incorporating equine welfare as a standard PILLAR 2 – POPULATION DYNAMICS consideration for all RV Board reports; • Review of thoroughbreds sold through Victorian The objective of this pillar is to develop a structure The objective of this pillar is to effectively monitor livestock sales over an 11-month period, then and programs of initiatives that maximise outcomes • The development of equine welfare investigation population dynamics, identify risk periods for ongoing monitoring of online sales during for thoroughbreds bred for racing. guidelines; welfare outcomes and implement initiatives to COVID-19; increase visibility. Key achievements include: • Accelerated recruitment of three additional • Audit of Stable Returns for horses which had not equine welfare resources; Key achievements include: raced or trialled over a six-month period; • A growing statewide network of 57 RV Acknowledged Retrainers (including seven new • The establishment of an Equine Welfare • Stable Return and Retirement forms were • Automated communication to owners and in FY20), who collectively placed over 500 Advisory Council, represented by three RV mandated to require trainers and owners to note trainers on the options available for horses horses into second careers in FY20; members and four independent experts, the details of the new owners when retiring a retiring from racing; including RSPCA Victoria (Year 2-3 Project); horse. Ensuring no horse can be officially retired • Since March 2020, over $200,000 in subsides • Framework for an on-site humane euthanasia has been provided to support RV Acknowledged program has been developed after significant Retrainers who have had to care for Off The expert consultation and research, and will be Track horses longer than anticipated as a result implemented in FY21 (Expanded from Year 2-3 of the COVID-19 pandemic; Project ‘End of Life Policy’). • Implementation of the RESET (Racehorse, Evaluation, Support, Education and Transition) PILLAR 3 – RACING program, which is aimed at finding homes for horses which have been retired for some time, The objective of this pillar is maximising the health but not found their calling for a second home; and welfare of the thoroughbred during racing by understanding the risks and having processes, • The support of virtual competitions both in resources, facilities, and education that mitigate Australia and the UK to engage the Off The them. Track community as restrictions prevented local competitions from being conducted; Key achievements include: • Providing education to owners in relation to • Expansion of pre-race off course examination post-racing options throughout their ownership program to feature races including all runners in journey, including the welcome pack and at their the Melbourne Cup, Cox Plate, Caulfield Cup and horse’s point of retirement; The All-Star Mile; • The development of post-racing principles: • The introduction of Australia’s first Standing CT transition, demand, longevity, visibility and Scanner in time for the 2019 Victorian Spring safety net. Each post-racing program ensures Racing Carnival to assist in the detection and one or more principle is achieved as an outcome prevention of serious equine injuries; of the program;

26 27 EQUINE WELFARE INTEGRITY

PILLAR 5 – INDUSTRY CULTURE WHAT’S TO COME: A strong integrity function is critical to a healthy spectators precluded from racetracks from March and prosperous Victorian racing industry and sits at to September 2020. The objective of this pillar is to empower industry In FY21, the implementation of a number of the heart of Racing Victoria’s 'right to exist'. participants to become equine welfare advocates. initiatives that have been in development in FY20 is A racing bubble was introduced to separate planned, including: those deemed critical to the continuation of race Key achievements include: EQUINE SAMPLE COLLECTION meetings from limited owner attendees who were • A state-based system that allows for greater allowed on-course at regional race meetings with • Communication and full transparency of the visibility of retired racehorses will be rolled out A total of 13,496 equine samples were collected the easing of restrictions in October. equine welfare strategic plan, including the in FY21 to not only improve RV's ability to audit during the 2019-20 racing season, with prohibited programs and initiatives we will deliver over the the movement of horses, but help recognise substances detected in seven samples (0.05%) – Inside the racing bubble, additional measures next three years; where possible gaps lie and tailor our post- down from 11 (0.08%) in the 2018-19 racing season. were put in place to separate and minimise the racing programs to better meet the needs of possible spread of the virus. Often working ahead • Outlining the priority projects as a result of the retired racehorses transitioning to a new career; of Government protocol implementation, the accelerated and expanded equine welfare action INDUSTRY BIOSECURITY PROTOCOLS introduction of masks, separation of jockeys, plan; • A foster program to provide short to medium- reduction of raceday staff and a comprehensive term support for thoroughbreds in need; To allow for the safe continuation of racing during COVID Safe plan ensured racing could continue • The inclusion of equine welfare as a commitment the COVID-19 pandemic, a range of biosecurity across Victoria within the bounds of the Rules of within the Club Members funding structure; • An on-site humane euthanasia program for protocols were implemented in accordance with all Racing. thoroughbreds where this is considered the best Government directives, guidelines and advice. • Development of an equine welfare online welfare outcome; education course, which was commissioned, This served to protect the health of industry staff, DIGITAL TRANSFORMATION developed and tested in FY20 in preparation for • An equine business grant program to drive participants and the wider community, maintain release to industry participants in early FY21. demand for non-competitive Off The Track 25,000 full-time equivalent jobs and ensure As part of our commitment to continually innovate horses in the broader equestrian community; daily care and exercise could be afforded to all our approach to integrity and equine welfare, thoroughbred racehorses. RV commenced work on a new digital veterinary PILLAR 6 – INDUSTRY REPUTATION • The establishment of a partnership with the sampling platform to streamline the horse sampling Riding for the Disabled Association of Victoria, As the pandemic unfolded, protocols were and collection process on raceday. The objective of this pillar is to demonstrate RV and to help expand their programs and provide continue to be reviewed based on risk analysis, the industry’s commitment to equine welfare to the another non-competition pathway for retired industry compliance, participant feedback and the A first for the Australian racing industry, this new wider community. racehorses; broader community landscape. technology will transform the experience for racing participants from a manual paper-based process to Key achievements include: • An Off The Track Community to provide a space On raceday, steps were taken to reduce participant a new paperless digital sampling platform. for retired racehorse owners, potential owners, exposure, with non-essential staff, owners and • Publication of welfare projects, statistics and equestrian organisations and other interested research results to the RV website and other parties to find and claim ownership of an Off The digital channels; Track horse, events, information on the pathway programs and educational opportunities; • Ongoing proactive external communication strategy highlighting equine welfare programs, • The creation of a Full Circle Program to enable such as the Off The Track and RESET programs; owners and ex-owners to follow a horse throughout retirement; • Introduction of the ‘Here for the Horses’ brand campaign to engage and educate the wider • Expansion of our Emergency Aid Policy and community on the initiatives and programs that criteria to recognise that there will be potential underpin our equine welfare efforts (Year 2/3 for emergency type situations such as bushfires, Project); floods or sudden loss of owners.

• Ongoing storytelling and promotion of Off The Track horses, competitions and sponsorship activations, such as the Portsea Polo, to engage and educate new audiences on the possibilities for retired racehorses.

28 29 INTEGRITY INTEGRITY

The new platform will integrate with RV’s FAIR RACING FOR ALL Central to our research and innovation efforts is In February 2020, we held our annual veterinary established integrity system to further enhance our commitment to the University of Melbourne’s seminar covering a range of topics to assist and data collection security and help reduce the In late 2019, RV introduced a wide-ranging suite of (UoM) five-year $6.2 million Equine Limb Injury guide participants in their day-to-day operations. industry’s reliance on paper. improvement initiatives collectively proposed by Prevention Program. key stakeholders and endorsed by the RV Board to The event featured guest speaker Nic Gill, Strength The new technology undertook a testing period shape the way Victorian racing grows in the future. Led by Professor Chris Whitton, head of the UoM’s and Conditioning Coach for the New Zealand during FY20 in preparation for being officially Equine Centre in Werribee, the research program All Blacks rugby team. Gill brought a different introduced ahead of the 2020 Spring Racing Carnival. One key area of focus was personal development, aims to aid in the prevention and early detection of perspective to the session, sharing his insights into including the provision of education, training and bone injuries to thoroughbred horses. managing training loads, early detection of injuries Over the opening months of the 2020-21 racing support networks for industry participants to and avoiding over-training. He also provided some season, RV will transition racetracks statewide from improve conduct and their understanding of the A major objective of the research program is to great insights into the lessons learnt from the All the paper-based to the paperless system. Rules of Racing. help trainers calculate the safe levels of training Blacks’ winning culture. for horses while maintaining fitness to reduce the This appetite for personal and professional incidence of injury. WHIP PENALTY GUIDELINES development was the driving force behind the SAFETY RECORD creation of RV’s new learning portal to help shape The most significant investment as a result of the A new penalty guidelines for breaches of the national how the Victorian racing industry continues to grow Equine Limb Injury Prevention Program was a joint The core objective of RV’s research investment is whip rules in Victorian flat races was ratified by the and develop. investment of close to $1.3 million by RV, the UoM to reduce the rate of raceday fatalities in flat racing RV Board in FY20 ahead of being implemented for and the State Government to bring Australia’s first towards 0.00%. the 2020-21 racing season. The first course to be released to industry Standing CT Scanner to Melbourne in time for participants will focus on equine welfare. Following the 2019 Spring Racing Carnival to assist in the Victoria’s raceday fatality rate is among the lowest The new guidelines were developed in consultation testing in FY20 this will be made available to detection and prevention of serious equine injuries. in world racing with a safety record of 99.95%. with the Victorian Jockeys Association to provide industry participants, starting with trainers, in Since 2010, Victoria has averaged just under 43,000 a clear framework for all industry stakeholders, in November 2020. We are also undertaking research to better annual starters in flat races for an average of 24 particular riders, setting out a minimum starting understand cardiac abnormalities associated with fatalities per year – a fatal incident rate of 0.05%. position for considerations on penalties that will Completing this module will provide participants with exercise in thoroughbreds, monitoring behaviour be imposed by RV Stewards if a breach of the a comprehensive overview of the industry’s three-year changes associated with orthopaedic pain in In the 2019-20 racing season, there were 28 Australian Rule of Racing AR132(7)(a)(ii) pertaining equine welfare strategic plan, and the programs and racehorses and investigating the factors preventing fatalities in flat racing in Victoria from 43,334 starts. to whip use occurs. initiatives that underpin the priority projects. horses from entering race training. This is equivalent to a fatality rate of 0.06%.

These learnings will form the guiding principles to In addition to this research, we continue to support ASIAN RACING CONFERENCE help industry participants uphold the expectations the industry through educational opportunities. of a licensed person and our social responsibility In February 2020, the Asian Racing Conference to protect and safeguard our equine stars before, took place in South Africa and provided an during and after their racing careers. important opportunity for the global racing world to come together to cover an array of topics The equine welfare learning module will be a relevant to the future of racing. compulsory component of an industry participants’ equine welfare declaration when renewing or Central to these discussions was the industry’s obtaining a new licence. approach to equine welfare and integrity services. Both Jamie Stier, Executive General Manager – Over the next couple of racing seasons, additional Integrity Services and Jennifer Hughes, General modules will be made available which will cover a Manager – Equine Welfare were part of the range of important integrity topics that relate to Australian contingent who presented at the event. how the industry operates on a day-to-day basis.

Following the successful 2020 edition, it was announced that the next Asian Racing Conference EQUINE RESEARCH AND INNOVATION would head to Melbourne for the first time. While the COVID-19 pandemic has put a hold RV’s commitment to research and innovation is on international travel, Victoria is scheduled critical to enhancing the safety, care and welfare to welcome 600 delegates from more than 30 of Victorian thoroughbreds before, during and countries in two years’ time. after racing.

30 31 INFRASTRUCTURE

Infrastructure expenditure dropped from $22.4 The $5.8 million Matilda Room extension included million to $15.6 million in FY20, which represented a upgrades to the kitchen, bar, viewing deck and 30.3% decrease. The decline comes off the back of other amenities as well as the addition of a a spike in activity in the prior year and reflects the ground-floor cafeteria and presentation bar. These postponement of a number of project works due to upgrades were implemented to provide additional the COVID-19 pandemic. capacity on feature race days, and also to enable the club to accommodate larger regional events.

CRANBOURNE TRAINING CENTRE REGIONAL TRACK MANAGER PROGRAM The Cranbourne Training Centre is one of the largest thoroughbred training facilities in the RV continued to support the Regional Track southern hemisphere, with more than 140 licensed Manager Program, which sees seven country track trainers operating from the complex and more than managers provide support and advice to other 700 horses in training each day. track managers in their respective regions.

To improve the experience for horses, trainers and RV also continued to facilitate the country track riders, a brand new grass training track has been renovation program, which has been extremely developed at Cranbourne. The track is currently well supported by regional racing clubs that host consolidating, and is expected to be officially between three and 13 meetings per year. This opened in late autumn 2021. In addition, the renovation program has assisted these clubs in centre’s synthetic track has also been upgraded, preparing their tracks. with a replacement surface laid.

These two projects, and the construction of an OTHER INFRASTRUCTURE PROJECTS equine pool at Pakenham, received critical financial support from the Victorian Government and have A full irrigation upgrade to the course proper and been developed as part of the ongoing relocation the sand training track was completed at Wodonga program of trainers from Caulfield Racecourse. & District Turf Club, and drainage upgrades were also completed at both Yarra Valley Racing and Hamilton Racing Club. WARRNAMBOOL RACING CLUB RV also continued to roll out regular upgrade The Warrnambool Racing Club completed a programs to jockeys’ rooms, plastic rails, veterinary significant upgrade and extension to the Matilda facilities, barrier stalls, ambulance tracks, stewards Room during FY20. towers, raceday tie up stalls, OH&S projects and picnic racing support programs. The works, which were jointly funded by the Club, RV, CRV and the Victorian Government, were completed in time for the 2020 May Racing Australian racing lost one its most Carnival, which proceeded without spectators due famous and popular duos, Subzero and to the COVID-19 pandemic. his best mate Graham Salisbury, both passing away within months of each other this year. For many years the pair combined on the track as Clerks of Course and off it as the faces of Racing Victoria's 'Subzero Goes to School' program. As a sport we are indebted to their work as ambassadors and the smiles they brought so many in the community. RIP Subbie and Graham.

32 33 COMMUNITY COMMUNITY

CHARITY Released in the spring of 2019, the film – which was This included assistance to horses in the form of The visit showcased the range of career prospects directed by Rachel Griffiths and stars Teresa Palmer feed, veterinary care and transport into safe areas on offer in the thoroughbred racing industry, with Ahead of the second edition of The All-Star Mile, RV (Michelle Payne) and Sam Neill (Michelle’s father if required. RV also sent representatives to the an expert team of vets and farriers on hand to give announced that for every vote polled in Australia’s Paddy) – charts the rise to fame of the first female regional relief centres which were established, and practical advice on caring for horses. only fans voted race, $1 would be donated to jockey to win the Melbourne Cup. maintained close contact to ensure that appropriate the Victorian Bushfire Appeal. A total of 135,097 assistance was provided where required. validated votes were received during the month-long As an official partner in the project, RV was LADY OF RACING voting period, with RV donating $135,097 to support given the opportunity to stage several advance An online fire support portal was also set up for Victorian communities devastated by the bushfires. screenings of the movie, which went on to take horse owners to access equine management RV once again partnered with The Victorian Wakeful $11.5 million at the box office and receive three resources, a register of agistment premises if a horse Club on the 2020 Lady of Racing Award, which was For the second year running, the $500 nomination nominations at the 2020 Australian Academy of needed to be relocated and how to contact RV’s won by Acknowledged Retrainer Fiona McIntyre. fee for every horse entered for the All-Star Mile also Cinema and Television Arts Awards. equine welfare team if further support was required. went to charity, thereby raising $47,500 for the Good McIntyre was announced as the deserving winner Friday Appeal with an additional $10,000 donated to A number of race meetings were transferred or during the Lady of Racing Award Luncheon, which the cause via the Melbourne Racing Club’s raceday BUSHFIRE RELIEF abandoned due to the poor air quality caused by was held at The Glasshouse in Richmond on Friday, 6 ambassador prizemoney. smoke, with RV providing relief and compensation March – two days before International Women’s Day. In addition to the funds raised for the bushfire to any race clubs and participants affected. One race appeal via the All-Star Mile voting process, RV also meeting which did proceed, despite the impact of The Lady of Racing Award, established in 1993 by RIDE LIKE A GIRL worked closely with Country Racing Victoria and our bushfires in the region, was Buchan Cup Day, which The Victorian Wakeful Club, recognises females who country clubs, as well as the metropolitan clubs and became a symbol of hope for the local community. have played a significant role in the thoroughbred Having partnered with the Victorian Government industry associations, to offer support and assistance racing and breeding industries. and Tabcorp on the Ride Like a Girl movie, RV was to people and horses affected by the fires. delighted to see the film enjoy great success at the INDIGENOUS YOUTH LEADERSHIP ACADEMY McIntyre was rewarded for her continuous work in box office. retraining and rehoming thoroughbreds, as well as Indigenous students from across regional Victoria raising awareness of post-racing careers both inside enjoyed a behind-the-scenes tour of Godolphin’s and outside the racing industry. Flemington stables as part of the Buldau Yioohgen Indigenous Youth Leadership Academy’s ‘southern Having spent her early career strapping and caring experience’, which has now been supported by RV for racehorses, McIntyre soon realised that her for several years. passion lay in the retraining of thoroughbreds for secondary careers. She currently has two former star The Buldau Yioohgen (or “Big Dreams”) academy racehorses in her care: Bart Cummings’ grand stayer brings together a number of community, cultural and Precedence, a veteran of four Melbourne Cup starts; sporting groups to support young Aboriginal and and two-time Group 1 winner Sirmione. Torres Strait Islander people as they strive towards their educational, employment and leadership goals. SADDLE UP Emerging elder Kellie Hunter and Uncle Ian Goolagong, brother of 13-time Grand Slam winner RV continues to support the Saddle Up School Evonne Goolagong-Cawley, conducted a traditional Holiday Program, which is delivered by Kelly Sports smoking ceremony at RV’s offices before the group in conjunction with the hosting race clubs. The headed down the road to Flemington. informative and engaging all-day program for youngsters enjoyed a successful summer stint in Stable foreman Reg Fleming, who for many years 2020, before the autumn schedule of events was was Bart Cummings’ right-hand man, took the cancelled due to the COVID-19 pandemic. With students behind the gates of Godolphin’s Carbine restrictions easing across Victoria, the Saddle Up Lodge. There, they gained an insight into the day-to- program is expected to return in 2021. day workings of one of the world’s leading training operations, and also got the chance to meet some of the Group 1 stars stabled there.

34 35 DIVERSITY AND INCLUSION CLUBS

THE JOCKEY MATERNITY regarding gender equality in sport. In a world-first, CLUB NUMBERS 31 July 2020. The Country Clubs funding agreement SUPPORT PROGRAM MCC members worked with McKinsey & Company was extended on 1 August 2020 at the option of to develop five key focus areas and 20 measures Victoria boasts 69 Racing Clubs across the state Country Racing Victoria. At the 2020 Lady of Racing Awards luncheon, identified as critical in driving progress on gender that host thoroughbred meetings and play a vital held just prior to International Women’s Day in equality, including pay equality in sport which the role in engaging with members, racegoers and March, RV Chairman Brian Kruger announced group’s progress will be measured against. local communities to promote the sport and deliver MELBOURNE RACING CLUB the introduction of the Jockey Maternity Support positive and engaging raceday experiences. Program, an initiative to assist pregnant jockeys. This year Melbourne Racing Club (MRC) welcomed FLEXIBLE WORKING ARRANGEMENTS Neds as a major sponsor to the Club. Neds, the RV has developed a support program to bridge FUNDING newest brand of our long-term partner GVC the gap between an eligible female jockey ceasing The value of having an established flexible work Australia, joined Stella Artois and CUB, Catanach’s riding – at the end of her first trimester, as per the policy in place for some time enabled RV to Club funding expenditure increased by $10.2 million Jewellers, Moet & Chandon, David Jones and Rules of Racing – and when she might be eligible swiftly mobilise all staff to work remotely when (12.7%) to $91.2 million, inclusive of the COVID-19 Schweppes as major partners. for the Federal Government’s parental leave the COVID-19 pandemic struck. RV’s approach to funding support grants made to clubs in May and provisions, upon the birth of the child. The financial flexible work arrangements has led to a smooth June 2020. The remaining club funding expenditure The 2019 Stella Artois Caulfield Cup was won by support paid by RV recognises the financial impact transition, as well as maintaining high productivity is undertaken in accordance with funding Mer De Glace, who became the second Japanese- in ceasing riding, and also seeks to reward the levels and engagement. During the pandemic, agreements executed with each club, which have trained horse to win the $5 million race after immense contribution made by female jockeys to particularly with increased caring responsibilities both fixed and performance based components. Admire Rakti in 2014. the racing industry. and home schooling, employees have been encouraged to work with their managers to enable Racing Victoria also confirmed on 24 September In March it was the MRC’s turn to host the second The first beneficiary of the support program them to achieve the optimum work-life balance. 2020 that it intends to provide its four Club All-Star Mile and, despite eventually holding the was Jess Payne, who together with her partner, Members (Country Racing Victoria, Melbourne event behind closed gates, the feature race saw Melbourne Cup-winning jockey Jye McNeil Racing Club, Moonee Valley Racing Club, Victoria a thrilling win by jockey William Pike on Western welcomed a baby boy into the world earlier this FAMILY AND DOMESTIC VIOLENCE POLICY Racing Club) with further funding support Australian raider Regal Power, earning Owner year. The 2018-19 Victorian Jockeys’ Premiership totaling $15 million by way of special grants Ambassador Tegan Abercrombie $250,000 in winner Linda Meech also recently announced she is RV has had a Family and Domestic Violence (FDV) from accumulated surplus funds in the Industry prizemoney. expecting her first child in January 2021. policy in place for a number of years now, to help Sustainability Fund. provide support for any staff members who have Despite not being allowed on-course since March, experienced violence or abuse. This funding provided much needed financial the MRC are pleased to have extended all MRC MALE CHAMPIONS OF CHANGE assistance to Clubs over the 2020 Spring Racing memberships and to maintain our 15,000-strong In July, in the midst of the COVID-19 pandemic, RV Carnival period, and assisted Clubs to help manage membership base at the Club. Despite deferring RV remains a member of, and contributor to, the relaunched the policy to extend our support and the impact of lost attendance, media, membership, our 2020-21 membership renewals until the end of work of the Male Champions of Change (MCC) counselling to any employees who commit acts of sponsorship and hospitality revenues as a the year, many thousands of members voluntarily Sport Group, which was established in May 2015. domestic violence – whether physical or verbal – in consequence of the ongoing impact of COVID-19 signed back up for the season and the MRC are an attempt to get them to change their patterns during what is typically the peak earnings period incredibly grateful for their continued loyalty. The group includes representatives from every of behaviour. This was an extension of RV’s duty of for Clubs. major national sporting organisation in Australia care to provide a safe working environment while as well as some of the country’s largest and most our employees undertake working from home In addition, RV also provided funding for Spring COUNTRY RACING VICTORIA successful sporting clubs. Members seek to work Racing Carnival prizemoney top ups, previously within and across their organisations in order to Through supporting employees to develop more funded by Clubs, totalling $4.8 million. These The past season has been one of the most advance gender equality. The group’s priorities respectful relationships, RV is playing our part in a amounts are both over and above the $12 million challenging and tumultuous years in Victorian include advancing women in leadership, creating whole-of-community action to put a stop to abuse already paid to Clubs in additional funding support country racing history. From the devastating respectful and inclusive sporting cultures, and create a society in which violence has no place. in May and June 2020. bushfires to the unprecedented COVID-19 pandemic, and pay equality. it has been a testing year for our 66 racing clubs, however they have remained steadfast throughout. Of particular significance was the release of the CLUB FUNDING AGREEMENT MCC Sport Pathway to Gender Equality in Sport The bushfires that ravaged the state in early including Pay Equality Report at the International RV is working with its three metropolitan clubs January were devastating for many regional Women’s Day forum held ahead of the final of to agree upon terms of new annual Club Member communities, with some of our clubs directly the T20 Women’s World Cup, which was won funding arrangements, following the expiry of the feeling the impacts. The entire Country Racing by Australia at the MCG. The report outlines a most recent three-year agreements which ended on community banded together and one of the consistent set of measures and assessment criteria

36 37 CLUBS CLUBS

highlights of the season was the running of the In 2019, The Valley staged the 99th running of the kick-started with a contribution of $1 million February 2020 saw the implementation of the 133rd Buchan Cup. Thanks to support from Racing W.S. Cox Plate, and added champion Japanese mare funded by 10% of all public ticket sales for the 2019 bold Rapid Racing concept as part of the VRC’s Victoria, the State Government and particularly the Lys Gracieux to the prestigious Honour Roll. Lys Melbourne Cup Carnival, and 5% of VRC annual racing strategy. The initiative pitted the top-ranked Minister for Racing, Martin Pakula, the meeting held Gracieux became the first Japanese trained horse membership fees. The EW Fund is designed to jockeys in the Victorian metropolitan and country at Canni Creek was in front of a packed crowd with to win the W.S. Cox Plate, and only the second enable the acceleration of initiatives that support premierships against each other in a points-based the effects of the fires still evident on the scorched international after Adelaide in 2014. the wellbeing of racehorses across all stages of team competition, with all races taking place on infield and winning post. their lives. Flemington’s famous straight over sprint distances The Valley is also Australia’s premier night racing of 1000-1200m. Moving on from the fires, the COVID-19 pandemic venue, staging up to 18 meetings each season under The 2019 Melbourne Cup Carnival in November saw hit. With racing and sport ceasing in many parts lights. In addition to the Group 1 Ladbrokes Cox many highlights, including an all-Australian win by Also in February, the undefeated queen of of the world, thanks to the professionalism of the Plate, The Valley boasts three Group 1 feature sprint Vow and Declare in the Lexus Melbourne Cup, and Australian sprinting, Black Caviar made a return to industry and all participants racing in Victoria was races – the $1 million Moir Stakes, the $1 million Damien Oliver breaking the record of 72 Melbourne the public eye, gracing the Flemington Mounting able to continue throughout the period ensuring Manikato Stakes and the $500,000 William Cup Carnival wins by a jockey set by Bobbie Lewis. Yard for a special appearance on the day named in that thousands of people in country Victoria were Reid Stakes. The 2019 Melbourne Cup Carnival was also the her honour, Black Caviar the Great Horse Raceday. able to keep their jobs. Many clubs in the back first to be broadcast by Network 10 since 2001, as half of the season held their biggest event days In 2017, the Moonee Valley Racing Club (MVRC) part of the landmark media rights deal worth $100 In March, the VRC celebrated the 180th anniversary without crowds, but it was a credit that all entered into a Development Agreement with leading million over five years. It is fitting that Cup Week of the first race meeting to be held at Flemington country cups were “run and won” despite no superannuation fund Hostplus and developer 2019 saw significant prizemoney increases across on March 3, 1840, which was commemorated on-course attendance. Hamton Property Group to undertake a complete a number of signature races with a total prize pool with a mid-week twilight race meeting. This transformation of the historic 40-hectare Moonee of $27.6 million on offer, including $8 million for the complemented the Group 1 racing on Australian There were many highlights through the 2019-20 Valley Racecourse site. The Moonee Valley Master VRC’s hallmark race, the Lexus Melbourne Cup. Guineas Day and Super Saturday, which fell either season, with record prizemoney on offer with more Plan will see the construction of more than 2000 side of this significant occasion. than $1 million added to the racing program. The residential dwellings which will be supported by The 2019 Melbourne Cup Carnival was responsible Melbourne Cup Carnival Country Series cemented retail and commercial development to support a for economic impact of $434.5 million for Super Saturday was the last time that the VRC was its place on the country calendar with an injection new community in excess of 4500. Victoria, as well as substantial direct and indirect able to welcome crowds on-course, with COVID-19 of more than $700,000 to the eight-heat series. employment with over 800 companies and 21,000 overshadowing the second half of the 2019-20 Ballarat Cup Day received a significant boost in The 15-year $2 billion project will create a new people working on site, while $450,000 was raised season. The VRC developed a number of initiatives prizemoney with $500,000 injected across the world-class racing, residential, commercial and for Very Special Kids, the VRC’s 2019 Pin and Win to engage its members and wider audience, program, making the feature race the nation’s retail precinct in the heart of Moonee Ponds. A new Charity partner for the Melbourne Cup Carnival. including VRC At Home, the digital racebook, the richest country cup. Other notable prizemoney racecourse and grandstand will be built, with the In total, the VRC contributed more than $1 million popular In Conversation With interview series, and increases for major country cups included the track to be completely redesigned. Situated just 6 of support during the 2019-20 season to assist for the 2020 Melbourne Cup Carnival, the dedicated Cranbourne Cup, Geelong Cup and Bendigo Cup, all kilometres from the Melbourne CBD, the new Valley charities and community groups across Australia, digital hub CupWeek2020.com.au, the virtual race lifted to $400,000 making them amongst the most racecourse will feature a spectacular backdrop of the including Very Special Kids, National Jockeys Trust The Lexus Melbourne Cup The Race of Dreams, and competitive country cup fields in the country. Melbourne city skyline. and to communities affected by the devastating the innovative Myer Fashions on your Front Lawn. Victorian bushfires. Thanks to the funding from Racing Victoria, the Hospitality is a key business pillar for the MVRC, Minister for Racing and the State Government, and in 2018, the Club created a new brand to deliver racing has been able to survive during this time. to high-quality food and beverage experiences. Dean & Country Racing Victoria (CRV) recorded a profit McPherson was launched after the Club secured the during the 2019-20 racing season, despite the rights to be the exclusive hospitality provider to the impacts of the COVID-19 pandemic on the industry. PGA Tour for both the 2018 World Cup of Golf and CRV remains in a stable financial position and is the 2019 Presidents Cup at Royal Melbourne. committed to assisting country clubs through the pandemic. VICTORIA RACING CLUB

MOONEE VALLEY RACING CLUB The 2019-20 season was one to be remembered for the Victoria Racing Club (VRC) for a number of The Valley is one of Australia’s most iconic reasons, both positive and challenging. racecourses, and is home to the W.S. Cox Plate – ‘The Race Where Legends Are Made!’ October 2019 saw the VRC announce the establishment of its Equine Wellbeing (EW) Fund,

38 39 WAGERING WAGERING

The wagering market evolved once again in FY20 which is exclusively offered by TAB, was negatively Prior to the COVID-19 pandemic, another • the outlook for retail, on-premise and as operators responded to the introduction of impacted by the forced closure of retail venues suppressing factor for turnover was the high non on-course wagering against the backdrop the new Point of Consumption Tax POCT at the during the Victorian lockdown. pari-mutuel margin results posted by wagering of increased digital wagering and media beginning of 2019 and major wagering operator operators, which impact customers’ capacity for consumption; and consolidation continued through the Sportsbet and As a result of those closures, customers increasingly reinvestment. In FY20, between July 2019 and BetEasy merger, and the finalisation of the TAB and embraced digital wagering, with its share of February 2020 this was 13.7% compared to 10.2% • the expected performance of pari-mutuel UBET integration. turnover experiencing a sharp rise. Between March in FY19 and a five-year average since 2014 of 11.4%. versus fixed odds wagering. and July 2020, digital wagering accounted for 93% This outcome was due in part by the over-round The impact of the COVID-19 pandemic on the of the total turnover – in the corresponding period increases imposed by wagering service providers, 2. Retaining the increased customer engagement wagering market from March 2020 also provided in 2019, digital held 77% share of total turnover. and in part by race results which favoured wagering attained during the COVID-19 period for a significantly different wagering trading operators. and continuing to ensure that Victorian performance in the back half of FY20 and drove Prior to the COVID-19 pandemic, the impact of the thoroughbred racing remains the number a number of structural changes in wagering 8% POCT had been felt on turnover on Victorian Strong turnover growth and high fixed odds one product of choice for both punters and customers’ behaviour and engagement. thoroughbred racing. At the start of 2019, the tax margins for wagering operators throughout the wagering operators alike. was introduced in Victoria and several actions were year combined to deliver race fields revenue of Assisted by the growth in the market share during taken by wagering operators to preserve their $201.0 million, up 9.5% on FY19. 3. Ensuring the achievement of important the COVID-19 pandemic, total turnover on Victorian profitability, which had a detrimental impact on industry performance and funding outcomes thoroughbred racing in FY20 rose by 1.1% to a new turnover. Total receipts from the Victorian TAB (VicTAB) in connection with the finalisation of the national record of $7.1 billion. joint venture were $186.5 million and included $31.9 Victorian government review of the POCT, to be They included increases to over-rounds (or reduced million paid by Tabcorp for the use of Victorian race completed by the end of 2020. That growth mainly occurred during the period odds for customers), decreases in media spend, fields by VicTAB. between March and July 2020, when restrictions and lower observed growth in free bet investment 4. Providing input into the ongoing 2024 Victorian imposed during the pandemic facilitated an in comparison to recent years. These actions led Looking forward, our focus will be on the following wagering licence review process, with a focus opportunity for racing to grow its audience in the to reduced promotion of racing and potentially key areas: on ensuring the retention and protection of the absence of other entertainment and discretionary limited the attractiveness of racing to customers, industry’s fundamental position as the major spend opportunities, competing sports and which we observed was leading to a decrease in 1. Developing an understanding of, and responding beneficiary of funding from any future Victorian international racing products. wagering activity on Victorian throughbred racing. to, the longer-term impacts of the structural wagering licence(s). However, these prevailing operator and customer changes in the wagering market which have During that period, the year-on-year percentage trends changed significantly during the post-COVID been exacerbated by the impacts of the change in turnover grew by 17.8% compared to period, with overall engagement on Victorian COVID-19 pandemic, including: 2019; however pari-mutuel and retail wagering, throughbred racing returning to strong growth.

40 41 MEDIA MEDIA

Racing Victoria’s investments in media supports provided to wagering partners for their mobile and Via this process, several new deals were completed maintained. Despite the activation of strict on- delivery against key strategic objectives, with a online digital platforms. during and after the financial year before this course access and operational protocols, the focus on growing and engaging our audiences August deadline, including: production teams across our media partners so they embrace the sport by providing relevant RV’s media expenditure includes funding provided were able to continue to deliver daily coverage to content anytime, anywhere to ensure the to, as well as direct investments in, a number of • An extension of the existing Seven West Media customers. sustainable growth of the Victorian racing industry. media assets which include Racing.com, Radio (SWM) spectrum agreement to guarantee Sport National, Thoroughbred Racing Productions Racing.com access to free-to-air spectrum until This proved to be of critical importance to ensuring Media services expenditure of $43.2 million was in (TRP), Racing Photos, Best Bets and Winning Post. 2025; continued customer engagement with our product, line with the prior year (up 0.6%), however total despite the lack of on-course crowd participation media revenue grew by 5.4%, rising to $53.0 million, During the year RV, with its shareholder clubs, • A new free-to-air deal for all non-Melbourne Cup and engagement as a consequence of COVID-19. following growth in media revenue streams based commenced a process of renewing critical multi-year Carnival feature meetings in Spring and Autumn upon wagering activity levels – primarily streaming media rights deals which expired in August 2020. with Seven West Media (SWM) until 2025; During the peak of the COVID-19 pandemic, when all TAB outlets were closed across Australia, our • Extensions of digital streaming deals for premium free-to-air partner SWM was able to wagering platforms with Tabcorp / SKY, extend coverage beyond the usual Autumn carnival Sportsbet, Ladbrokes and Bet365; period to include additional raceday coverage throughout May and June. With the support of RV • An arrangement with the Melbourne Racing and Racing.com, SWM delivered a national raceday Club (MRC) to be the international sales coverage which included racing content from other agent for the Victorian Thoroughbred Racing interstate racing jurisdictions. Significant audience Industry (VTRI) media rights deals in overseas viewing ratings were achieved during this period. jurisdictions, leveraging the MRC’s existing experience and presence in these markets. This The new Melbourne Cup Carnival media agreement arrangement is in support of the decision by between Network Ten and the Victoria Racing Club VTRI stakeholders to pursue a direct export commenced during the 2019 carnival. Importantly, strategy for VTRI media and wagering content Network Ten and Racing.com were able to agree to to international markets, which we believe will terms which also saw the industry broadcaster deliver a meaningful uplift in value over coming on-course during the four racedays. years. This opportunity to go direct to market is made possible through the VTRI’s significant RV has continued to lead a process of change investment in its own proven media supply and and innovation in respect of the delivery of vision, distribution network, which is unique amongst data and insights enabled by the industry media the racing and sporting industry. supply chain. These changes will lead to an ability to deliver greater value from existing media Discussions remain ongoing with our other industry partnerships and create the opportunity for the media partner, SKY Racing, to continue our VTRI to enter into new media rights and distribution important commercial venues, agencies and Pay arrangements moving forward. In connection with TV partnerships. this, RV is leading a significant process to review opportunities for greater integration across the RV’s media business was also impacted by various industry-owned media assets. COVID-19 restrictions. During this time, RV was able to work closely with key media partners such as Racing.com, TRP, Gravity Media and Telstra to ensure that a high-quality coverage could be

42 43 RACING.COM RACING.COM

The Racing.com channels are the key assets portfolio. The Racing.com digital platform saw YoY Growth Key Metrics FY18 FY19 FY20 within the Victorian Thoroughbred Racing Industry significant growth as measured across a broad FY20 v FY19 (VTRI) media portfolio, and provide for a multi- spectrum of important engagement metrics. Average Users platform, year-round coverage delivering critical 536K 723k 769k 6.40% outcomes in respect of engagement with Whilst continuing to deliver a high quality per Month customers and wagering. continuous 24/7 coverage of Victorian and South Average Unique Sessions 2.04m 2.54m 3.15m 24% Australian thoroughbred racing, and achieving per Month The Racing.com channels have enabled Victorian significant growth in customer engagement racing to become freely available to approximately metrics, Racing.com also continued to deliver an Live Stream Minutes 28.5m 40.4m 93.8m 132% 97% of Australian households each day. In important financial contribution to the VTRI. per annum (million) collaboration with Australia’s leading free-to-air Video on Demand Minutes broadcaster, Seven West Media (SWM), Racing.com 15.3 20.5m 22.8m 11% per annum (million) continues to deliver significant value to RACING.COM DIGITAL PLATFORM Victorian racing. PERFORMANCE Video on Demand Views 6.6m 8.2m 10m 22% per annum (million) In a difficult year, the team at Racing.com were able During FY20 Racing.com digital focused on to evolve its high-class coverage whilst managing enhancing the curation of vision (live racing, Racing Plus subscribers 250K 381k 542k 42% industry COVID-19 restrictions. replays, video on demand and catch-up TV) across its suite of digital assets including web, mobile web Note: Avg. monthly Users & Sessions metrics are obtained from Google Analytics (web & app combined). Live stream metrics come from Akamai. With the initial commercial joint venture and iOS and Android Apps – ensuring that Racing. VoD metrics are from Brightcove Analytics. R+ numbers are from Salesforce CRM. arrangements coming to an end, on 1 July 2020 com is always available for its audience anywhere, Racing Victoria entered into a new multi-year anytime, on any device. commercial arrangement with SWM which ensures the continued broadcast of Racing.com nationally Significant effort was also applied to developing The highlight results were the 24% growth in • Grew revenue from advertising, sub-licensing on channel 78, and digitally retransmitted via the multi-platform tipping content including unique sessions per month, the 132% growth in live and production services by $1.1 million to $21.8 SWM network for the next four years. Form Factors, Suggested Bets and Race Preview streaming, and 22% growth in video on demand million, an increase of 5% on the previous year; commentary under the newly established Racing. consumption. Additionally, and reflecting the rapid changes com Form Analyst brand, published throughout • Delivered on major sponsorship agreements in consumer media consumption, the role of form guides, news articles, and a new Tipping Racing.com has now passed half a million registered with Sportsbet, BetEasy and Bet365 that remain the Racing.com digital platform has become an Hub. This information is carried into the subscribers to the free Racing Plus vision service, in place until 2022; increasingly important part of the industry’s media Racing.com broadcast. here in Victoria and across Australia. • Delivered promotion and integration campaigns Social media engagement reached record levels, for a growing network of industry clients with over 270,000 fans and followers across (breeders, syndicators, sales companies and race Facebook, Twitter and Instagram. clubs), and consumer brands seeking association with Victorian racing; and Racing.com continues to manage the core technology platform for a network of 75 club and • Achieved a net surplus from the Thoroughbred Racing Victoria websites. Racing SA (TRSA) vision rights for the third consecutive year. The acquisition of TRSA rights has helped grow audience, strengthen the RACING.COM - FY20 FINANCIAL broadcast quality and improve Racing.com’s PERFORMANCE KEY HIGHLIGHTS overall commercial position. Revenue growth primarily came from sub-licensing streaming In FY20, Racing.com: increases of South Australian races to wagering service providers and SKY channel. • Made $7.0 million of broadcast advertising revenue share payments to stakeholders, including $3.5 million to RV;

44 45 INVESTMENTS AND INDUSTRY SUSTAINABILITY FUND INVESTMENTS AND INDUSTRY SUSTAINABILITY FUND

INDUSTRY SUSTAINABILITY FUND An ISF framework was established with the of funds above the agreed optimum target funding Any investments which are made utilising funds agreement of Club Members and sets out an level, as at the financial year end. from the ISF are separately tracked and reconciled Racing Victoria holds and invests financial assets optimum minimum target of surplus funds for RV by RV and reviewed annually. Any assets which are on behalf of the Victorian Thoroughbred Racing to maintain on behalf of the industry to ensure that The assessment of whether there are available created as a consequence of investing ISF funds Industry (VTRI) as part of an Industry Sustainability these objectives can always be met and maintained. surplus funds involves reviewing total available will either be accounted for directly as assets on Fund (ISF). The purpose of the ISF is to ensure that industry funds and adjusting for all known industry the balance sheets of RV or the respective Club the industry retains sufficient funds to: Upon establishment, the target optimum balance cash claims. Members or Industry stakeholders, depending on of funds to be maintained on behalf of the ISF the nature of the investment. • protect against unforeseen shocks, downside was agreed at $80 million. This target balance The assessment of available industry funds includes risks and to ensure the long-term sustainability is reviewed annually by the RV Board, to ensure any surplus RV cash above operating requirements of the industry; that it remains appropriate for the circumstances plus the balance of all managed funds under FUNDS UNDER INVESTMENT and needs of the industry, reflects prevailing and investment. • provide funds to support future industry-wide expected macro-economic, racing and wagering RV engages an investment manager to invest and capital projects (e.g. infrastructure) and other industry conditions, and remains consistent with Industry cash claims include any capital investment manage accumulated surplus funds that sit outside strategic industry investments (e.g. media industry strategic priorities. commitments, funding required to meet the near-term operating cash requirements of the / digital investments and additional equine operating liabilities and other long-term industry business and to hold various financial assets on welfare investments not funded by prizemoney); The ISF framework specifies that at the end of liabilities such as jockey pre-workcover liabilities, behalf of the VTRI. These investments are governed and each financial year, RV conducts an assessment of commitments and obligations associated with by an investment policy that is reviewed annually by ‘surplus’ industry funds beyond operational cash any Government funding receipts (e.g. committed the Audit and Risk sub-committee of the RV Board. • to assist with finance and investment that requirements. Subject to approval by the RV Board, infrastructure project funding, specific grants may not be otherwise available to industry the framework provides that Club Members may be expenditure and any other conditional expenditure Evans and Partners (EaP) are the current manager stakeholders. entitled to receive special funding distributions by commitments such as minimum prizemoney of the industry investment funds. RV progressively way of grants, should there be an available surplus expenditure and club funding support associated increased funds under investment with EaP through with COVID-19 grants from Government received the year and the portfolio market value increased during the FY20 year), and funds which are set from $81.4 million in FY19 to $91.3 million at end aside to fund specific industry strategic initiatives FY20. and investments. Any loans which have been extended to industry stakeholders are also taken Investments are recorded at fair value through into account. the profit and loss (FVTPL) based on the different income streams including distribution income, The balance of industry surplus funds as at end of dividend income, interest income, foreign income, FY20 was assessed to be $67.2 million. This reflects gains/losses on disposal of investments and net a number of significant near-term commitments, gain/losses arising on financial assets designated as including a further $15 million in committed funding FVTPL (unrealised components). support to be provided to Club Members for the 2020 Spring Racing Carnival period impacted by The total return for the year from EaP investments the COVID-19 pandemic, additional 2020 spring was marginally positive at 0.4% net of fees despite prizemoney top-ups of $4.8 million normally funded the significant market impact stemming from by Club Members, an allowance for additional COVID-19. RV was able to strategically mitigate risk equine welfare project expenditure above that by ensuring its investment portfolio maintained funded by participants through prizemoney, and significant liquidity to avoid market volatility whilst further infrastructure investment on Caulfield also providing the ability to draw down emergency trainer relocation projects. funds should the industry have required, particularly if racing was to be subjected to a shutdown period As the balance of industry surplus funds was below (73.4% invested in cash / interest rate securities the ISF optimum balance of $80m, no further as of 30 June). Portfolio equity investments have special funding distribution grants were made to recovered well since the initial decline in late Club Members on 30 June 2020 under the ISF February 2020 and continue post year-end. framework, noting however that the Club Members together have received commitments of additional funding from RV totalling $31.8 million since June 2020.

46 47 DIRECTORS' REPORT DIRECTORS' REPORT

The directors of Racing Victoria Limited (Racing Victoria or The Company) submit herewith the annual CURRENT DIRECTORS (CONTINUED) financial report of the company for the financial year ended 30 June 2020. To comply with the provisions of the Corporations Act 2001 (Cth) (Corporations Act), the directors’ report follows: TIM EDDY Appointed Director 9 December 2019

The names of the directors of the Company during or since the end of the financial year are as follows. Mr Eddy had a successful 40 year career at Ernst & Young including the positions of Managing Partner Operations - Oceania, Global Vice Chair – EY Global Services and National Managing Partner CURRENT DIRECTORS – EY Transaction Advisory Services. He currently serves as a Non-Executive Director of Western Sydney Airport, Independent Chairman of ShineWing Australia, Chairman of The Red Fox Group, Early Start Australia Pty Ltd and Integra Choice and Control Pty Ltd. BRIAN KRUGER Mr Eddy is a member of the Racing Victoria Audit & Risk Sub Committee and a member of the CHAIRMAN Racing Victoria & Country Racing Victoria Steering Committee. Appointed director and Chairman 9 October 2017

Mr Kruger has a career spanning over 35 years with extensive experience in the Australian listed company environment. He spent five years as Managing Director of Toll Holdings after joining as KATE JOEL Chief Financial Officer as well as holding various senior management roles at BHP Billiton and Appointed 9 October 2017 BlueScope Steel and is also the Chairman of Incitec Pivot Limited. Mr Kruger was previously on the Committee of the Moonee Valley Racing Club for 11 years. Ms Joel has been a business consultant for over 30 years and currently serves on the Board of the Mr Kruger is a Director of Racing.com Pty Ltd, Chairman of the Racing Victoria OHS & Participant Florey Institute of Neuroscience & Mental Health, having served on the Florey Foundation since 2017. Welfare Sub Committee, Chairman of the Racing Victoria Members Consultative Committee and a Previously, Ms Joel was CEO of Leonard Joel Auction House and was a member of the Melbourne member of the Racing Victoria & Country Racing Victoria Steering Committee. and Olympic Parks Trust and Harness Racing Victoria. Ms Joel is Chairman of the Racing Integrity & Equine Welfare Sub Committee and a member of the Racing Victoria Audit & Risk Sub Committee. MIKE HIRST DEPUTY CHAIRMAN Appointed director 20 October 2015 and appointed Deputy Chairman 16 October 2016 (and served as Acting Chairman from 16 October 2016 until 9 October 2017) ROSS LANYON OAM Mr Hirst was the former Managing Director of Bendigo & Adelaide Bank and has extensive experience Appointed 9 October 2017 in banking, finance and business planning including previously holding the role of Deputy Chairman Mr Lanyon is the Managing Director of ENG Media which publishes newspapers in Regional Victoria. of the Treasury Corporation of Victoria. Mr Hirst is also a Director of Amcil and GMHBA and currently He has received an OAM for his services to thoroughbred racing and the Community of Mildura and holds the position of Commissioner on the Australian Government National COVID-19 Commission. was the Chairman of Country Racing Victoria from 2011 to 2014. Mr Lanyon is also Chairman of The Mr Hirst is Chairman of the Racing Victoria Audit & Risk Sub Committee, Chairman of the Victorian Country Press Association Ltd and the Mallee Health Foundation. He is a Director of Mildura Thoroughbred Owners and Breeders Advisory Panel and a member of the Racing Integrity & Equine District Hospital Fund Ltd, Sunraysia Australian Football Commission Ltd and Clay Hero Pty Ltd. Welfare Sub Committee. Mr Lanyon is a Director of Thoroughbred Racing Productions (Victoria) Pty Ltd, Chairman of the Racing Victoria & Country Racing Victoria Steering Committee and a member of the OHS & Participant Welfare Sub Committee. GILES THOMPSON CHIEF EXECUTIVE OFFICER Appointed director and CEO 18 April 2017 SHARON MCCROHAN Before joining Racing Victoria in 2015, Mr Thompson had senior executive commercial experience in Appointed 9 October 2017 the wagering and media industries. He spent nine years on the executive team at Betfair Australia, Ms McCrohan has a career spanning almost 30 years as a journalist and adviser to Federal and State three years as CEO, and had previously spent seven years in various senior positions at the Financial government leaders and cabinets, private sector boards, sporting bodies, charities and government Times Group and APN News and Media. agencies. She is a Non-Executive Director of Reliance Worldwide Corporation and the Transport Mr Thompson is a Director of VicRacing Pty Ltd, Racing Products Victoria Pty Ltd and Racing.com Accident Commission and also serves on the board of the Ovarian Cancer Research Foundation. Pty Ltd. Ms McCrohan is a member of the Racing Integrity & Equine Welfare Sub Committee and the Racing Victoria Members Consultative Committee.

ROWEN CRAIGIE Appointed Director 9 October 2017 GREG NICHOLS Appointed 29 November 2012 Mr Craigie has extensive experience working with government and has a strong understanding of wagering. He spent 10 years as Managing Director at Crown Resorts Limited and has previously Mr Nichols is presently Chairman of Racing Australia. Throughout an extensive career in racing and worked for the Victorian TAB and the Department of Treasury. wagering, he has previously held senior positions in the Betfair Group and was the Chief Executive of the British Horseracing Board and the South Australian Thoroughbred Racing Authority. He is a Mr Craigie is the Chairman of Racing.com Pty Ltd. Director of GVTL Pty Ltd. Mr Nichols previously held the positions of Chairman and Non-Executive Director of Racing.com Pty Ltd that ceased on 31 August 2020 and an international advisor role with Trakus Limited (amended from Director in the 2019 annual report) that ceased on 31 March 2020.

48 49 DIRECTORS' REPORT DIRECTORS' REPORT

OFFICERS 9 Efficient operation of the industry: The VTRI is managed with optimal efficiency in order to best enable the meeting of the objectives, whilst also balancing the need for growth so as to ensure the industry’s long term sustainability. This includes effectively delivering race day services to Clubs under Mark Close (Company Secretary) an efficient shared services model;

9 Focus on sustainable industry funding: Maximise whole of industry income which delivers economic PRINCIPAL ACTIVITIES, STRATEGY AND OBJECTIVES benefit to all Members, Stakeholders and Participants and protects the long term sustainability of the VTRI. Coordination and representation of the VTRI in key commercial negotiations which may deliver The consolidated entity’s principal activities in the course of the financial period were related to the significant benefits to members. Manage industry revenues and distributions whilst ensuring the VTRI administration and promotion of thoroughbred racing in the State of Victoria. is managed with optimal efficiency and is well protected against cyclical risks and external threats.

Racing Victoria has a critical stewardship role to manage the Victorian thoroughbred racing industry (VTRI), 9 Industry advocacy and promotion: Represent the Victorian Thoroughbred Racing Clubs, VTRI and with a focus on ensuring the ongoing sustainability of the industry as a whole and for the benefit of all other members on broader industry matters including at State, Federal and International levels. industry stakeholders. The Racing Victoria strategic framework sets a vision for Victorian thoroughbred Maintain regular and effective consultation with key stakeholders and participants in the VTRI to racing. Racing Victoria’s purpose is to lead and champion great horse racing in Victoria. Racing Victoria’s develop and grow the sport (including wagering partners to ensure Victorian thoroughbred racing vision is “Racing for All” - encouraging more people, more often, to engage with and enjoy our sport. is the preferred product of choice for punters). Manage key partnerships with various wagering operators to protect and maximise responsible wagering income. Market and promote the Victorian Racing Victoria’s key goals and objectives are to: thoroughbred racing industry as the place to own, race, wager, participate and attend. Manage industry public relations including communication with media. 9 Manage thoroughbred racing to maintain Victoria’s pre-eminence: Victorian thoroughbred racing is recognised throughout Australia and worldwide as the pre-eminent racing jurisdiction in the country; 9 Maintain independence: The Company conducts its operations and exercises its powers and functions in a manner which ensures that public confidence in integrity and independence is upheld and the 9 Maintain the highest standards of integrity and equine and participant safety and welfare: Victorian Company is insulated from any improper external commercial influence. thoroughbred racing is managed and conducted to ensure and continuously improve on the highest levels of integrity and in accordance with the Rules of Racing. Racing Victoria is focused on improving the safety and maintaining the welfare of horses and participants; DIVIDENDS

9 Manage the racing calendar with optimal efficiency: Victorian thoroughbred racing is managed with Under the Company’s constitution no dividends may be declared or paid. optimal efficiency to best enable the meeting of its objectives, including becoming the premier State for three year-old and staying races. Develop an optimal race fixture and program to service the needs of industry stakeholders; COVID-19 GLOBAL PANDEMIC

9 Encourage sustainable participation: Victorian thoroughbred racing is managed to encourage Racing Victoria has been significantly impacted during the period by the COVID-19 global pandemic the fullest possible participation in all aspects and levels of the industry, across a wide and diverse from both an operational and financial perspective. From mid-March 2020, Racing Victoria announced demographic. We are focused on ensuring a responsible culture of fair play and respect for all industry that crowds would not be permitted at race tracks and implemented a range of strict racing and training participants through education and support; biosecurity protocols. These protocols were developed following extensive consultation with all participant bodies taking into account relevant Government directives, guidelines and advice. These measures were 9 Meet social obligations: Victorian thoroughbred racing is conducted to ensure that it meets its social continually reviewed and updated in response to the changing situation and environment. The biosecurity obligations to Victoria and the communities in which it operates, including: protocols served to protect the health of industry staff, participants and the wider community; as well as • promoting Victorian country thoroughbred racing; minimise the risk of the industry’s ability to continue racing. • encouraging responsible wagering; and • optimising employment in the VTRI. As a result of the pandemic, the nation has experienced an economic crisis that has led to widespread job losses and significant uncertainty around consumer spending, which has impacted both industry 9 Optimise economic benefits: Responsible and prudent financial management to optimise the participants and also the revenues generated by the VTRI and its members, and which has unknown future economic benefits for a wide range of stakeholders and participants of the VTRI, including: timing and magnitude impacts. • the owners of thoroughbred racehorses; • other participants and stakeholders in Victorian thoroughbred racing; Racing Victoria took steps in March 2020 to review its operations and subsequently made certain • the breeders of thoroughbred racehorses; decisions in the interest of its long-term viability and the sustainability of racing throughout the State. The • the communities in which Victorian thoroughbred racing operates; and sustainability measures implemented have impacted all industry participants including Racing Victoria staff • the Victorian economy generally. and have been continuously reviewed and changed to ensure the entity can respond effectively to any challenges that may arise through the volatile and ongoing COVID-19 environment.

50 51 DIRECTORS' REPORT DIRECTORS' REPORT

The direct financial impacts of COVID-19 to the Racing Victoria result have been detailed in the following • Government support is crucial to the continuation of current levels of participant and club support and report, however some of the broader impacts include; prizemoney levels. Reallocation of Government resources would increase the risk of Racing Victoria being able to continue to support at current levels. • The negative Joint Venture business impact of TAB retail venue closures, on-course patron restrictions and reductions in both sport and international racing product; • Contracting and unstable foreign and domestic markets pose a risk to investment activities and funding sustainability. • Digital wagering turnover uplift flowing from increased demand for wagering, in part attributable to reduced alternative entertainment competition; REVIEW OF OPERATIONS • The receipt of State Government financial support which assisted with maintaining prize money at temporarily reduced levels during the COVID period and enabled Racing Victoria to provide ongoing The net surplus of the consolidated entity for the financial year ended 30 June 2020 was $10.728 million financial support to Clubs; compared to a surplus of $8.801 million in the prior year.

• Necessary changes to staffing arrangements, noting the consolidated entity was not eligible for the federal Government JobKeeper scheme; Revenue

• Cessation of all non-essential spend; The total revenue from operations increased by $12.335 million or 2.7% to $477.805 million versus the prior year (2019: $465.469 million). • Deferral or suspension of some capital projects (both infrastructure and business projects); and Total wagering revenue for the full year decreased by $8.565 million (2.4%) versus the prior year, noting • The implementation of a number of active cash management protocols. that this result was composed of two very different trading periods within the year.

Racing Victoria has considered the below ongoing business risks regarding the continuing COVID-19 • For the July 2019 to February 2020 period prior to the COVID-19 pandemic, wagering income situation. decreased by $7.828 million (3.0%) versus the prior calendar period, reflective of softer prevailing macro-economic conditions and a more challenging wagering environment. • Increases in the rate of COVID-19 infection within Victoria and Australia has the potential to shutdown the VTRI, in whole or in part, and extend the need for restrictions or enhanced restrictions (whether The impact of changes in behaviour from wagering service providers (WSPs) following the imposed by Government or Racing Victoria). introduction of the Point of Consumption Tax (POCT) earlier in 2019 were beginning to have an obvious impact upon VTRI wagering demand. An overall reduction in the level of investment in • A potential pandemic outbreak amongst Racing Victoria employees and/or industry participants poses promotion of racing in preference for sports, reduced WSP customer generosity and an increase in the health and safety risks and a risk to industry continuation. cost of betting to customers via adjustment of overrounds, were all contributors to a steady year on year decline in wagering turnover in the July 2019 to February 2020 period, which was down by 5.3% • A potential pandemic outbreak amongst contractors within the VTRI supply chain poses a risk to versus the prior year. industry continuation and/or Racing Victoria’s financial position, for example in catering for media supply chains. A combination of WSP pricing adjustments and race results where fewer than normal favorites won races delivered high fixed odds margins for WSPs and ensured that despite the lower turnover, race • Ongoing TAB retail venue closures pose a risk to Racing Victoria wagering income. fields revenue remained solid, aligning closely to the prior calendar period.

• Travel restrictions, including International quarantine requirements and domestic border closures may Income from the VicTAB joint venture was also trending downward, in line with overall market impact the extent of participation in Victorian racing including the Spring Racing Carnival. performance and reflecting the impact of changes to joint venture funding share arrangements which have reduced industry funding since the introduction of POCT. Distributions received from the VicTAB • Industry clubs have limited opportunity to earn revenue during a Spring Carnival without crowds or joint venture fell by $8.017 million (6.5%) on the prior calendar period for the July 2019 to February hospitality which puts pressure on short term club financial liquidity. 2020 period.

• Differing COVID-19 regulatory environments between Australian States/Territories has the potential to • Following an initial decline in wagering through the early stages of COVID-19 restrictions in March and put the VTRI at a comparative disadvantage to racing in other Australian jurisdictions. early April 2020, wagering turnover returned to growth as consumers increased their engagement with racing via digital channels in the absence of alternate gaming and leisure activities. Wagering • The financial impacts of the pandemic continue to impact industry participants and may result in operators also sought to engage with this expanded audience by presenting stronger promotional increased risk to equine welfare particularly to retired thoroughbreds. offers which were well above historic levels.

• Remote working environments may result in the decrease of internal controls and an increased These factors led to wagering turnover growth of 17.8% when compared to the prior corresponding exposure to risks including cyber security and health and safety risks. period and combined with ongoing strong fixed odds margins, delivered race fields income growth of

52 53 DIRECTORS' REPORT DIRECTORS' REPORT

$12.274 million (23.9%). Whilst this growth was significant, it wasn’t enough to offset a very notable payment, Racing Victoria was also able to continue to provide Clubs with ongoing club funding to sustain decline in VicTAB joint venture distributions which decreased by $13.354 million (25.2%) as the their racing operations throughout the period. impacts of retail venue closures combined with a reduction in major sport and international racing product were felt by the VicTAB business. Racing Victoria Expenditure as a % of Revenue – FY20 vs FY19 During the period, Racing Victoria received funding from various Government sources. This included a share of compensation payments made to the VTRI following the introduction of POCT from 1 January 2019, The Racing Victoria business model is based around making regular, proactive investments to ensure the various grants to partially fund a number of key infrastructure projects completed during the period and delivery of the best racing and to support the sustainability of its various stakeholders. With the exception a commitment of funding to support significant prize money increases announced and implemented from of operational spend, which runs at approximately 12% of revenue, most expenditure is directed towards 1 January 2019. Racing Victoria also received additional special COVID-19 pandemic funding support from funding, supporting and growing the industry and the number of participants. This is outlined as follows: Government of $16.580 million in June 2020. This funding was provided to support important initiatives including sustaining returns to participants, securing jobs within the industry, maintaining participant and animal welfare standards, along with providing thoroughbred racing clubs with financial support to maintain Prizemoney their viability. 48% (47%)

Revenue from funds under investment declined overall on a year on year basis. This was largely following Club Funding the fall in equity values due to the contracting of markets in response to the COVID-19 pandemic, which Industry 19% (17%) reduced consumer demand and disrupted global supply chains. Total investment revenue including realised 76% (75%) Infrastructure gains, unrealised gains and investment income in the form of dividends and interest was $0.687million 4% (5%) (2019: $5.702 million). Participant Support 5% (6%) Expenditure Wagering Services Total expenditure for the full year increased slightly (up 1.8%), to $466.580 million (2019: $458.202 million). 1% (1%) Total Expenditure Income Generating 98% of Revenue 10% (10%) The low growth in expenditure was driven by the various financial sustainability measures put in place in (98% FY19%) Media Services response to the impact of COVID-19 in March 2020. A number of immediate actions were taken by the 9% (9%) Racing Victoria Executive and Board to manage the risks to the industry business model and ensure the industry’s ongoing financial viability through the pandemic. These included: Operational 12% (13%) • The immediate reduction of non-essential operating expenditure across all areas of the business;

• A reduction in prize money and bonuses on offer across all VTRI races from the beginning of April Industry Expenditure 2020; Industry expenditure reflects targeted funding and investment provided to owners, participants and clubs • Significant changes to staffing arrangements resulting in a reduction in payroll costs of around 28%, and accounts for the majority of the consolidated entity expenditure (76% of revenue). following temporary stand-downs, reduced working hours (impacting around 40% of positions), and Board, Executive and Senior Management team remuneration reductions of 50%, 20% and 10% • Prize money and VOBIS expenditure increased by $10.056 million (4.6%) to $229.227 million. respectively; and Prize money and VOBIS expenditure is key to enabling the industry vision and growth, with direct beneficiaries including owners, trainers and jockeys. These investments increase the attractiveness • A number of active cash management initiatives including a review of payment and receivable terms, of Victorian thoroughbred racing and lead to improvements in the quality of runners, field sizes and the suspension of non-essential capital expenditure, deferral of key projects and a repositioning of overall interest in our industry. Our Victorian breeders also benefit through the VOBIS scheme, both funds under investment in order to maximise available liquidity. directly through bonuses available and indirectly through eligible horses becoming a more attractive sales proposition. These initiatives delivered significant reductions in expenditure over the March to June 2020 period, which helped to offset against the decline in wagering revenues experienced over the same period, whilst allowing The increase in prize money reflected the full year impact of previous increases to race minimums Racing Victoria to continue to maintain important expenditure to support and ensure the sustainability of which commenced part way through the prior period (1 January 2019), plus further prizemoney clubs and participants during the pandemic. increases over the 2019 Spring period for metropolitan Spring Racing Carnival features which were jointly funded by the VTRI and Government. In connection with the receipt of the special COVID-19 pandemic funding support from Government in June 2020, Racing Victoria was able to make special funding grant payments of $3.000 million to each of the Prizemoney was temporarily reduced from 6 April 2020 as part of entity wide measures implemented three Metropolitan racing clubs and to Country Racing Victoria (CRV). On top of this $12.000 million special to safeguard industry funds through the COVID-19 pandemic. These prize money revisions included

54 55 DIRECTORS' REPORT DIRECTORS' REPORT

a 20% reduction for metropolitan races, a 10% reduction for country races, a 15% reduction for • The scoping of an advanced state-based tracking system in lieu of a national traceability system metropolitan Super VOBIS and VOBIS Gold bonuses and a 7.5% reduction for Country SuperVOBIS to better understand the movements of horses post-racing (to at least their first home). It’s and VOBIS Gold bonuses. Following an overall improvement in the industry financial position through anticipated the staged roll out of the online platform will commence in FY21. the COVID pandemic, and with the outlook for racing to continue on a restricted basis looking positive, all prize money minimum reductions were reinstated back to previous levels effective from 1 August • As part of the broader work being completed to develop the state-based tracking system, an 2020. analysis of livestock sales was undertaken in FY20. Racing Victoria are planning to expand this data collection in FY21 to monitor all livestock sales yards in Victoria - including Echuca, Bairnsdale, • Club funding expenditure increased by $10.296 million (12.7%) to $91.215 million, inclusive of the Pakenham and Warrnambool. COVID-19 funding support grants made to clubs in May and June 2020. The remaining club funding expenditure is undertaken in accordance with funding agreements executed with each club, which • To further support our efforts to improve data standards and the traceability of racehorses, trainers have both fixed and performance based components. The three metropolitan clubs entered into participated in a stable return audit in FY20. The audit required trainers to list every racehorse agreements commencing 1 August 2017 for a three-year term. The Country clubs funding agreement that in the previous six months had not raced and if it wasn’t on their licensed premises what its was extended on 1 August 2018 for a period of two years ending 31 July 2020 with an option for a third whereabouts were. year at the discretion of CRV. • As a source of expert advice and opinion to assist Racing Victoria to effectively implement its • Infrastructure expenditure decreased by $6.783 million (30.3%) to $15.630 million, which primarily three-year equine welfare action plan a new Equine Welfare Advisory Council was formed. The reflected postponed project works due to the COVID-19 pandemic. A key project progressed during Advisory Council will ultimately have scope for eight members, with the balance of five persons the period related to the Caulfield trainer relocation strategy which included works at Cranbourne on who are independent of Racing Victoria. the inside grass training and synthetic tracks and at Pakenham on the horse pool. Other key projects include major synthetic track works at Ballarat and Flemington, sand fibre track works at Wangaratta • Central to Racing Victoria’s research and innovation efforts was a commitment to extend the and track widening works at Kilmore and Geelong. three-year $5.250 million Equine Limb Injury Prevention Program in FY20 by a further two years to 2022. Led by Professor Chris Whitton, head of the University of Melbourne’s Equine Centre in • Participant support decreased by $0.549 million (2.1%) to $25.067 million. The reduction is largely due Werribee, the research program aims to aid in the prevention and early detection of bone injuries to to a year on year decrease in jockey WorkCover premium and a reduction in equine welfare spend thoroughbred racehorses. related to postponing the equine limb injury prevention research program in partnership with the University of Melbourne due to the COVID-19 pandemic. • Additional investment have also been made in raceday operations to not only streamline Racing Victoria and participant processes but reduce the industry’s reliance on paper-based systems. In October 2019, Racing Victoria announced a significant commitment of $25.000 million to support the acceleration and expansion of the industry three-year Equine Welfare Strategic Plan. Commencing from • One example is the phased introduction of a Veterinary Sampling App that will integrate with our 1 January 2020, this commitment is to be enabled through contributions from the Industry Sustainability current digital platforms to make data collection secure and easier for participants. Fund and industry participants via an increase to the prizemoney levy to 2% (previously 1%). FY21 will see the further implementation of a number of initiatives that have been in development in FY20 This increased financial commitment by the Victorian racing industry has allowed for an effective, as outlined in the Equine Welfare Strategic Plan, including: sustainable and tangible approach to the initiatives and programs implemented to support Victorian racing’s equine welfare efforts now and, in the future, with a priority on the post-racing wellbeing of • A Foster Program to provide short to medium term support for thoroughbreds in need. retired racehorses. • An Onsite Humane Euthanasia Program administered by registered veterinarians for thoroughbreds To support the implementation of the equine welfare strategic framework a key priority in FY20 was where this is considered the most appropriate outcome. the recruitment of an expanded Equine Welfare Taskforce, which grew from two to six team members. This team is further supported by Racing Victoria’s Veterinarian Services team and broader Integrity • A post-racing Off The Track Equine Business Grant program to drive demand for non-competitive Services Department. Off The Track horses in the broader equestrian community.

The initial focus of this new and expanded team in FY20 was to establish a clear set of meaningful • The establishment of a formal relationship with the Riding for the Disabled Association of Australia. worthwhile and priority projects consistent with the strategic objectives of the Strategic Plan. While This initiative primarily supports the post-racing demand for thoroughbreds; and the COVID-19 pandemic impacted the delivery timelines of some initiatives, equine welfare remained a critical focus in FY20 for Racing Victoria, as demonstrated by the implementation of various priority • The significant investment in technology to develop digital applications that will aid the daily projects including: prevention and management of equine injuries by industry participants.

• The RESET Program, a new pathway for Victorian thoroughbreds that have struggled to find the This overarching approach to equine welfare will ensure long term genuine equine welfare outcomes for right home following the conclusion of their racing career. every racehorse for decades to come.

• Being agile to deliver COVID-19 subsidies for Racing Victoria Acknowledged Retrainers who have The minimum $25.000 million spend over the first three years of the accelerated action plan that had to retain Off The Track horses longer than anticipated due to the impacts of the pandemic.

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commenced from 1 January 2020 will be funded by an increased investment from Racing Victoria, a The ISF framework defines the ISF to comprise of a mixture of cash, loans to stakeholders and investments contribution from the Industry Sustainability Fund and an increase in industry participant contributions made from surplus funds. The remaining balance of funds is expected to be apportioned evenly between from 1% to 2% of prizemoney. funds for industry investments and cash reserves to provide protection against industry externalities such as COVID-19, and to ensure the sustainability of industry funding and investment.

Income Generating Expenditure During the period, Racing Victoria provided its four member clubs with special COVID-19 funding support grants totaling $12.000 million. Racing Victoria has confirmed with its member clubs to provide a further Media services expenditure of $43.215 million, was largely in line with the prior year (up 0.5%). This includes $15.000 million in additional funding support for the upcoming COVID-affected 2020 Spring Racing strategic investments in media distribution infrastructure, vision capture, production, content creation and Carnival period (to be paid after the balance date) with these funds expected to be drawn from the ISF. channel production in order to enable the VTRI to achieve a broad audience reach across multiple media Racing Victoria will also provide funding for 2020 Spring Racing Carnival prizemoney top ups of $4.805 distribution channels, and to drive growth in media rights and wagering income for the industry. Some of this million, previously provided by member clubs. Given the expected payment of these funds, the Board of revenue is recorded directly in other external related party accounts including our member clubs and Racing.com. Racing Victoria has determined that no further year-end grants of surplus funds (previously assessed where total funds sat above an agreed optimum balance at year end) will be made to Clubs from the ISF at the Wagering services expenditure decreased by $1.271 million (20.8%) to $4.830 million, which was largely end of the 2020 year (2019: $2.300 million). due to reductions in wagering development expenditure linked to turnover in the first half (targets not fully achieved), as well as a suspension of this expenditure during the COVID-19 pandemic period. CHANGES IN STATE OF AFFAIRS

Operational Expenditure There was no significant change in the state of affairs of the consolidated entity during the financial year.

Total Operating Expenditure decreased by $3.643 million (6.0%) to $57.396 million, which represented 12% of total revenue (2019: 13%). This expenditure includes the core costs of managing and administering the SUBSEQUENT EVENTS VTRI, including: Subsequent to 30 June 2020, on 6 August 2020 RV terminated its previous free to air (FTA) channel • racing operations (including race day services, vets and quarantine); partnership agreements with Seven West Media Limited (SWM) which were due to expire in August 2020, • integrity and stewarding; and executed a new 5 year Channel and Premium Race Meeting Agreement with SWM. This new agreement • marketing, PR and communications; and replaces all previous agreements with SWM and secures, on new terms, access for Racing Victoria’s racing • executive, administration, legal, risk and compliance. channel ‘Racing.com’ to continue to be broadcast on Channel 78 until 2025. SWM will also be entitled to broadcast up to 21 Premium feature Victorian race meetings on its main FTA channels over the same period. The consolidated entity achieved significant reductions in operational expenditure over the COVID-19 impacted period following the review of non-essential or discretionary expenditure. Other reductions A number of media rights arrangements with third parties with renewal dates in August 2020 have either include positive recoveries in doubtful debts, reduced restructure expenses and a decrease in asset write- been renewed or are currently in the process of being renewed by Racing Victoria. These multi-year offs. Increases in operational expenditure largely reflect additional COVID-19 related expenses incurred to media rights agreements are with various third party media distribution partners and customers including manage through the COVID period, including additional costs of legal and compliance, costs associated wagering service providers, FTA channel partners and subscription / pay tv providers. with new biosecurity measures including testing and cleaning, and increased communications, travel and accommodation costs as a consequence of maintaining strict distancing and participant movement protocols. Racing Victoria is working with its three metropolitan clubs to agree upon terms of new annual Club funding arrangements, following the expiry of the most recent three-year agreements which ended on 31 July 2020. The Country Clubs funding agreement was extended on 1 August 2020 at the option of CRV. Investment Activities Racing Victoria has also confirmed on 24 September 2020 that it intends to provide its four member clubs The consolidated entity continued its engagement with Evans and Partners to manage accumulated surplus with further funding support totaling $15.000 million by way of special grants from accumulated surplus funds that sit outside of operating cash requirements. A balanced mandate is maintained with investments funds in the ISF. This funding will provide much needed financial assistance to Clubs over the upcoming made in various financial assets including cash, interest rate securities, Australian and international equities, 2020 Spring Racing Carnival period. This funding will assist Clubs to help manage the impact of lost property and infrastructure and alternative funds. The investment mandate and asset allocations are attendance, media, membership, sponsorship and hospitality revenues as a consequence of the ongoing reviewed on an annual basis together with the governing investment policy. At 30 June 2020 these financial impact of COVID-19 during what is typically the peak earnings period for Clubs. In addition, Racing Victoria assets totalled $91.340 million (2019: $81.366 million). will also provide funding for Spring Racing Carnival prizemoney top ups, previously funded by Clubs, totalling $4.805 million. These amounts are both over and above the $12.000 million already paid to Clubs Racing Victoria has agreed to hold and invest these financial assets on behalf of the VTRI as part of an in additional funding support in May and June 2020. Industry Sustainability Fund (ISF). The purpose of the ISF is to ensure that the industry retains sufficient funds to protect the long-term sustainability of the industry, provide funds to support important industry- Other than that noted above, there has not been any matter or circumstance occurring subsequent to the wide capital infrastructure and investments and also to assist with finance and investment that may not be end of the period that has significantly affected or may affect the operations of the consolidated entity, the otherwise available. results of those operations or the state of affairs of the consolidated entity in future financial periods.

58 59 DIRECTORS' REPORT DIRECTORS' REPORT

FUTURE DEVELOPMENTS entity and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits Likely developments in the operations of the consolidated entity in future financial periods include: disclosure of the nature of the liability and the amount of the premium.

• Wagering licence renewal – the exclusive pari-mutuel and retail wagering licence currently held by The consolidated entity has executed deeds of indemnity in favor of each of the directors. Each of these VicTAB is scheduled to conclude in August 2024. The Government has formally commenced a process deeds provides for the consolidated entity to indemnify each director to the maximum extent permitted by to review the terms of renewal of this licence. The Victorian Racing Industry is a major beneficiary of law against: this licence through funding arrangements with the licencee which provide the industry with a material amount of its ongoing funding. • all liabilities incurred by the director as an officer of the consolidated entity and each subsidiary; and

• POCT review - the Victorian State Government introduced a point of consumption wagering and • all legal costs and expenses arising from proceedings or an investigation incurred by the director as an betting tax on 1 January 2019, payable by all wagering operators on all wagering and betting activity officer of the consolidated entity or of a subsidiary. undertaken by Victorian residents. The deeds also give the directors a right of access to board papers within their term for a period of seven The State Government has committed to review the terms of the POCT no later than 18 months following years after their retirement and require the consolidated entity to maintain insurance cover for the directors. its introduction. The Industry is actively monitoring the impacts of the new tax on wagering activity A director’s right of access to board papers is subject to protection of the consolidated entity’s legal levels and revenues, which provide the majority of industry funding. This review may include the tax rate professional privilege rights and to the director keeping the board papers in confidence. set by State Government, as well as the rate and terms of the compensation payment provided to the Industry by the State Government to mitigate the impact of the introduction of the new tax. The consolidated entity has not otherwise, during or since the financial year, indemnified or agreed to indemnify any officer or auditor of the consolidated entity or of any related body corporate against a The outcome of the POCT review may have a material positive or negative impact on the operations of liability incurred by such an officer or auditor. the consolidated entity.

AUDITOR’S INDEPENDENCE DECLARATION DIRECTORS’ MEETINGS The auditor’s independence declaration is included on page 66 of the financial report and forms part of this The following table sets out the number of directors’ meetings (including monthly and special meetings of directors’ report. the board and meetings of the audit and risk committee) held during the financial period and the number of meetings attended by each director (while they were a director or committee member). During the financial year, 11 board meetings, 11 special board meeting and 6 audit committee meetings were held. ROUNDING OFF OF AMOUNTS

BOARD OF DIRECTORS AUDIT AND RISK The company is a company of the kind referred to in Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument Monthly Monthly Special Special amounts in the directors’ report and the financial statements are rounded off to the nearest thousand Meetings Meetings Meetings Meetings Meetings Meetings Directors Held (*) Attended Held (*) Attended Held (*) Attended dollars, unless otherwise indicated. Brian Kruger (Chair) 11 11 11 11 3 3 Signed in accordance with a resolution of the directors made pursuant to s.298(2) of the Corporations Act Mike Hirst (Chair of Audit and Risk Committee, 11 11 11 10 6 6 2001. appointed 11 July 2019) Rowen Craigie 11 11 11 11 On behalf of the directors Tim Eddy 6 6 10 9 3 3 Kate Joel 11 10 11 11 6 6 Ross Lanyon OAM 11 10 11 11 Sharon McCrohan 11 11 11 10 Greg Nichols 11 11 11 10 Giles Thompson (CEO) 11 11 11 11 6 6

(*) The number of meetings held during the time the directors held office during the 12 months to 30 June 2020. BRIAN KRUGER MIKE HIRST INDEMNIFICATION OF OFFICERS AND AUDITORS Chairman Chairman of Audit and Risk Committee

During the financial year, the consolidated entity paid a premium in respect of a contract insuring the Melbourne, 30 September 2020 Melbourne, 30 September 2020 directors of the consolidated entity, the company secretary and all executive officers of the consolidated

60 61 Lead Auditor’s Independence Declaration under Independent Auditor’s Report

Independent Auditor’s Report SectionLead Auditor’s 307C of Independence the Corporations Declaration Act 2001 under To the members of Racing Victoria Limited

Opinion SectionTo the Directors 307C of of Racing the VictoriaCorporations Limited Act 2001 To the members of Racing Victoria Limited We have audited the Financial Report of The Financial Report comprises: Racing Victoria Limited (the Company). • Consolidated statement of financial position as at 30 I declare that, to the best of my knowledge and belief, in relation to the audit of Racing Victoria Limited Opinion forTo thethe financial Directors year endedof Racing 30 June Victoria 2020 there Limited have been: In our opinion, the accompanying Financial June 2020 Report of the Company is in accordance We have audited the Financial Report of The• Consolidated Financial Report statement comprises: of surplus or deficit and i. no contraventions of the auditor independence requirements as set out in the with the Corporations Act 2001, including: Racing Victoria Limited (the Company). other comprehensive income, Consolidated I declare that,Corporations to the best of Act my 2001 knowledge in relation and to belief, the audit; in relation and to the audit of Racing Victoria Limited • Consolidated statement of financial position as at 30 • giving a true and fair view of the statement of changes in equity, and Consolidated for the ii.financialno yearcontraventions ended 30 June of any 2020 applicable there have code been: of professional conduct in relation to the audit In our opinion, the accompanying Financial June 2020 . statement of cash flows for the year then ended ReportGroup of the’s financialCompany position is in accordance as at 30 i. no contraventions of the auditor independence requirements as set out in the June 2020 and of its financial • Consolidated statement of surplus or deficit and with the Corporations Act 2001, including: • Notes including a summary of significant accounting performance for the year ended on other comprehensive income, Consolidated Corporations Act 2001 in relation to the audit; and policies • thatgiving date; a true and and fair view of the statement of changes in equity, and Consolidated ii. no contraventions of any applicable code of professional conduct in relation to the audit. Group’s financial position as at 30 • Directors’statement Declarationof cash flows for the year then ended • Junecomplying 2020 withand ofAustralian its financial Acc ounting The• Notes Group including consists a of summary the Company of significant and the accountingentities it performanceStandards - Reduced for the year Disclosure ended on controlledpolicies at the year-end or from time to time during thatRequirements date; and and the Corporations the financial year. Regulations 2001. • Directors’ Declaration KPMG Chris Sargent • complying with Australian Accounting

Standards - Reduced Disclosure The Group consists of the Company and the entities it Partner Requirements and the Corporations controlled at the year-end or from time to time during Regulations 2001. the financial year. KPMG MelbourneChris Sargent Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit 30Partner September 2020 evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Melbourne Basis for opinion Our responsibilities under those standards are further described in the Auditor’s responsibilities for We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit 30 September 2020 the audit of the Financial Report section of our report. evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirementsOur responsibilities of the under Accounting those Professionalstandards are and further Ethical described Standards in the Board’s Auditor’s APES responsibilities 110 Code of Ethics for forthe Professionalaudit of the FinancialAccountants Report (including section Independence of our report. Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordanceWe are indepe withndent the Code.of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.

KPMG, an Australian partnership and a member firm of the KPMG Liability limited by a scheme approved under KPMG, an Australian partnership and a member firm of the KPMG Liability limited by a scheme approved under network of independent member firms affiliated with KPMG Professional Standards Legislation. network of independent member firms affiliated with KPMG Professional Standards Legislation. International Cooperative (“KPMG International”), a Swiss entity. International Cooperative (“KPMG International”), a Swiss entity.

KPMG, an Australian partnership and a member firm of the KPMG Liability limited by a scheme approved under KPMG, an Australian partnership and a member firm of the KPMG Liability limited by a scheme approved under network of independent member62 firms affiliated with KPMG Professional Standards Legislation. network of independent member63 firms affiliated with KPMG Professional Standards Legislation. International Cooperative (“KPMG International”), a Swiss entity. International Cooperative (“KPMG International”), a Swiss entity.

Other Information Auditor’s responsibilities for the audit of the Financial Report Other Information is financial and non-financial information in Racing Victoria Limited’s annual Our objective is: reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon. • to issue an Auditor’s Report that includes our opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in Information. In doing so, we consider whether the Other Information is materially inconsistent with accordance with Australian Auditing Standards will always detect a material misstatement when it the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially exists. misstated. Misstatements can arise from fraud or error. They are considered material if, individually or in the We are required to report if we conclude that there is a material misstatement of this Other aggregate, they could reasonably be expected to influence the economic decisions of users taken on Information, and based on the work we have performed on the Other Information that we obtained the basis of the Financial Report. prior to the date of this Auditor’s Report we have nothing to report. The Other Information we A further description of our responsibilities for the audit of the Financial Report is located at the obtained prior to the date of this Auditor’s Report was the Directors’ Report. Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf This description forms part of our Auditor’s Responsibilities of the Directors for the Financial Report Report.

The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian KPM_INI_01 Accounting Standards - Reduced Disclosure Requirements and the Corporations Act 2001;

• implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or KPMG Chris Sargent error; • assessing the Group’s ability to continue as a going concern and whether the use of the going Partner concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either Melbourne intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 30 September 2020

64 65 CONSOLIDATED STATEMENT OF SURPLUS OR DEFICIT DIRECTORS’ DECLARATION AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2020 In the opinion of the directors of Racing Victoria:

(a) the consolidated entity is not publicly accountable; 30 JUNE 2020 30 JUNE 2019

(b) the financial statements and notes that are set out on pages 67 to 106 are in accordance with the NOTE $’000 $’000 Corporations Act 2001, including: Wagering revenue 2(a) 355,603 364,168 (i) giving a true and fair view of Racing Victoria’s financial position as at 30 June 2020 and of its performance, for the financial year ended on that date; and Media revenue 2(b) 52,991 50,278 Other revenue 2(c) 69,211 51,023 (ii) complying with Australian Accounting Standards – Reduced Disclosure Regime and the Corporations Regulations 2001; and 477,805 465,469

(c) there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and Prize money 2(d) (229,227) (219,171) when they become due and payable. Club funding 2(d) (91,215) (80,919)

Signed in accordance with a resolution of the directors: Infrastructure 2(d) (15,630) (22,413)

Participant support 2(d) (25,067) (25,616)

Wagering services expenditure 2(e) (4,830) (6,101)

Media services expenditure 2(f) (43,215) (42,943)

Operational expenditure 2(g) (57,396) (61,039) BRIAN KRUGER MIKE HIRST Chairman Chairman of Audit and Risk Committee (466,580) (458,202)

Melbourne, 30 September 2020 Melbourne, 30 September 2020 Impairment loss 6 (1,628) - Share of profit of associates accounted for using the equity method 7 1,131 1,534

Surplus before income tax 10,728 8,801

Income tax expense 25(n) - -

Surplus for the year 10,728 8,801

Other comprehensive income for the year

Items that will not be reclassified to the Income Statement Remeasurement of losses on pension schemes 15 (245) (462)

Total comprehensive income for the year 10,483 8,339

Notes to the financial statements are included on pages 71 to 106.

66 67 CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF CASH FLOWS

AS AT 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 30 JUNE 2020 30 JUNE 2019

NOTE $’000 $’000 NOTE $’000 $’000

Current Assets Cash flows from operating activities

Cash and cash equivalents 22(a) 41,660 27,148 Receipts on behalf of the thoroughbred racing industry 549,216 516,568 Trade and other receivables 3 40,311 41,670 Payments associated with industry expenditure (332,704) (309,440) Other financial assets 4 94,693 86,335 Payments associated with all other expenditure (185,128) (186,818) Other assets 257 169 Interest received 218 570 Total Current Assets 176,921 155,322 Interest paid - - Non-Current Assets Net cash generated by operating activities 22(b) 31,602 20,880 Other financial assets 4 12,123 8,440 Property, plant & equipment 5 21,059 20,715 Cash flows from investing activities Intangible and goodwill 6 9,450 10,837 Proceeds/(payments) for financial assets (10,000) 2,000 Investments accounted for using the equity method 7 12,788 11,657 Payments for property, plant & equipment (2,372) (4,441) Total Non-Current Assets 55,420 51,649 Payments for intangibles (1,870) (3,247) Total Assets 232,341 206,972 Loans to related entities and repayments received (2,905) (2,006) Current Liabilities Proceeds from sale of property, plant & equipment 57 - Trade and other payables 9 40,612 46,402 Net cash used in investing activities (17,090) (7,694) Unearned revenue 10 23,903 5,769

Provisions 11 7,660 7,380 Net increase/(decrease) in cash held 14,512 13,186 Total Current Liabilities 72,175 59,551 Cash at beginning of financial year 27,148 13,962 Non-Current Liabilities Cash at the end of financial year 22(a) 41,660 27,148 Unearned revenue 10 2,241 370

Provisions 11 3,417 3,438 Notes to the financial statements are included on pages 71 to 106. Defined Benefit Liability 15 174 (239) Total Non-Current Liabilities 5,832 3,570 Total Liabilities 78,007 63,121 Net Assets 154,334 143,851 Equity Issued capital 12 - - Retained earnings 13 154,334 143,851 Total Equity 154,334 143,851

Notes to the financial statements are included on pages 71 to 106.

68 69 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

ISSUED RETAINED TOTAL 1. SUMMARY OF ACCOUNTING POLICIES CAPITAL EARNINGS NOTE $’000 $’000 $’000 The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise Balance at 1 July 2018 - 135,512 135,512 stated. The financial statements are for the consolidated entity consisting of Racing Victoria and its Surplus for the year - 8,801 8,801 subsidiaries. Actuarial loss on defined benefit plans 15 - (462) (462) Balance at 30 June 2019 - 143,851 143,851 Basis of preparation Balance at 1 July 2019 - 14,3851 14,3851 Surplus for the year - 10,728 10,728 Compliance with Australian Accounting Standards – Reduced Disclosure Requirements Actuarial loss on defined benefit plans 15 - (245) (245) Balance at 30 June 2020 - 154,334 154,334 These general purpose financial statements have been prepared in accordance with Australian Accounting Standards – Reduced Disclosure Requirements, other authoritative pronouncements of the Australian Accounting Standards Board and Interpretations and the Corporations Act 2001. Notes to the financial statements including prior year restatement are disclosed on pages 71 to 106 For the purposes of preparing the consolidated financial statements, the consolidated entity is a not-for- profit entity. The financial statements were authorised for issue by the directors on 30 September 2020.

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair value through profit or loss.

The company is a company of the kind referred to in Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, dated 24 March 2016, and in accordance with that Corporations Instrument amounts in the directors’ report and the financial statements are rounded off to the nearest Australian thousand dollars, unless otherwise indicated.

The financial report has also been prepared in accordance with the terms of various agreements with the members (as defined at (i), (ii) and (iii) below) and the racing industry in Victoria as follows:

(i) Establishment of Operations

The consolidated entity was incorporated on 17 December 2001 for the purpose of administering the Victorian Thoroughbred Racing Industry (VTRI) which was previously the responsibility of the Victoria Racing Club (VRC).

On 19 December 2001 the four thoroughbred racing bodies – Victoria Racing Club, Melbourne Racing Club, Moonee Valley Racing Club and Country Racing Victoria (collectively the members) entered into a Members Agreement with the consolidated entity. Under this agreement the members agreed to establish the consolidated entity as the new principal club and governing body for thoroughbred racing in Victoria. The VRC agreed to relinquish its status as the principal club and its role as governing body to facilitate the granting to the consolidated entity of that sole status and role.

70 71 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

(ii) Current Membership Significant Accounting Policies

The current membership of Racing Victoria now comprises of: The following significant accounting policies have been adopted in the preparation and presentation of the financial report: Club members: Country Racing Victoria, Melbourne Racing Club, Moonee Valley Racing Club & Victoria Racing Club. Industry body members: Australian Jumping Racing Association, Australian Services Union, Australian Trainers Association (Victorian Division), Australian Workers Union (Victorian (a) AASB 15 Revenue from Contracts with Customers Division), Media and Entertainment Arts Alliance, Thoroughbred Breeders Victoria, Thoroughbred Racehorse Owners Association, United Voice, Victorian Bookmakers Association & Victorian Jockeys Following application of AASB 15 in 2018, management determined it appropriate to defer a Association. proportion of VOBIS nomination revenue into unearned revenue, to be recognised as revenue in future years. The proportion of this deferral is determined based upon the performance obligation attached to the VOBIS nomination received. (iii) Thoroughbred Racing Industry Revenue and Distributions Management has changed and simplified its 2020 estimation methodology of the performance On the 16 August 2012, the racing industry in Victoria entered into new joint venture and information obligation to the proportion of VOBIS bonuses on offer to eligible horses as either a 2 year-old or 3 supply agreements with the Tabcorp group of companies. Under a racing industry Deed of Operations year-old horse. This differs from the proportion determined in 2019 which was based upon applying a executed on 21 December 2011, the thoroughbred, harness and greyhound racing codes have further estimation of the likelihood of a nominated horse winning a VOBIS bonus as either a 2 year- determined arrangements between themselves, including the allocation of joint venture income, profits old or 3 year-old horse. The impact of this change in estimate is a further deferral of VOBIS revenue and information supply fees. to unearned revenue that will transact over both the 2020 and 2021 financial years, reflecting the fact that the amounts relate to receipts dating back to the 2019 year and the deferral was for a period of Wagering income is received by the thoroughbred racing industry in the form of the above joint up to 2 years. venture distributions, international distributions associated with media rights fees and race fields fees (refer Note 2(a)). Other significant income is generated via the exploitation of Media rights held by a fully owned subsidiary RVL Media Pty Ltd and from the receipt of various Government Grants and (b) Impact of AASB 16 Leases payments (refer Note 2(c)) AASB 16 Leases introduces a single, on-balance sheet lease accounting model for lessees, in a similar The consolidated entity will endeavour to make grants to member clubs having regard to the following way to the accounting treatment for finance leases under AASB 117 Leases. Under AASB 16, a lessee principles: recognises a right-of-use asset representing its right-to-use the underlying asset and a lease liability representing its obligations to make lease payments. • The consolidated entity will from time to time make grants to members and participants in the Victorian thoroughbred racing industry for the purpose of encouraging thoroughbred horseracing. The consolidated entity has considered the impact of implementing AASB16 in relation to the following: • Leasehold property and equipment where it is a lessee; and • In making grants, the consolidated entity will seek to: • Agreements which provide a right to occupy a room

(i) adequately support the objectives of the Victorian thoroughbred racing industry; The consolidated entity reviewed and assessed that there is no impact on the above for the financial period. (ii) provide incentives for club performance and achievements of industry objectives; and Furthermore, AASB 16 retains the AASB 17 Leases accounting treatment for lessors requiring a lease to (iii) encourage and optimise participation in the ownership of thoroughbred race horses throughout be classified as a finance lease if substantially all of the risk and rewards incidental to ownership of the Victoria by maximising returns to owners through statewide prize money strategies and other leased asset have been transferred to the lessee or otherwise to be classified as an operating lease. incentives. To alleviate concerns the AASB released AASB 2018-8: Amendments to Australian Accounting • The clubs further acknowledge that, consistent with the constitution of the consolidated entity, Standards – Right-of-Use Assets of Not-for-Profit Entities. AASB 2018-8 amends AASB 1, AASB 16, no portion or amount of the income or assets of the consolidated entity may be distributed, paid AASB 117, AASB 1049 and AASB 1058 to provide a temporary option for not for profit entities to elect or transferred directly or indirectly by way of dividend, bonus, or otherwise by way of profit to or to measure a class (or classes) of right-of-use assets arising under concessionary leases at initial amongst the clubs in their capacity as members. recognition either at cost or at fair value.

The Standard requires an entity that elects to apply the cost option to include additional disclosures (iv) Retained Profits in the financial statements to ensure users understand the effects on the financial position, financial performance and cash flows of the entity arising from these leases. The consolidated entity reviewed Under the terms of the Members Agreement net profit and the ongoing retained profits of the and assessed that they would elect to apply the cost option for the financial period. consolidated entity cannot be distributed as dividends to the members.

72 73 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

(c) Critical Accounting Judgements and Key Sources of Estimation Uncertainty All other significant accounting policies adopted in the preparation and presentation of the financial report are included under note 25. In the application of the consolidated entity’s accounting policies, which are described above, management is required to make judgements, estimates and assumptions about carrying values of 30 JUNE 2020 30 JUNE 2019 assets and liabilities that are not readily apparent from other sources. The estimates and associated RESTATED* assumptions are based on historical experience and various other factors that are believed to be $’000 $’000 reasonable under the circumstances, the results of which form the basis of making the judgements. Actual results may differ from these estimates. 2. SURPLUS FROM OPERATIONS Revenue from operations consisted of the following items: The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only (a) Wagering Revenue that period, or in the period of the revision and future periods, if the revision affects both current and Joint venture distributions (i) 148,138 168,372 future periods. International distributions 6,465 7,665

Critical judgements in applying the consolidated entity’s accounting policies Race fields revenue 201,000 188,131 355,603 364,168 Judgements made by management in the application of the consolidated entity’s accounting policies that have significant effects on the financial statements and estimates with a significant risk of material (b) Media Revenue adjustments in the next period are disclosed, where applicable, in the relevant notes to the financial statements. Media rights revenue 35,642 32,952 Racing.com advertising (ii) 3,500 3,500 Accounting policies are selected and applied in a manner that ensures that the resulting financial Racing Victoria share of Racing.com (iii) 4,499 4,146 information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported. Publications revenue 7,885 8,378 Other revenue 1,465 1,302 The following are the key assumptions concerning the future, and other key sources of estimation 52,991 50,278 uncertainty at balance date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period. (i) Joint venture distributions from VicTAB were materially impacted by COVID from March 2020 with significant retail network closures combined • Impairment of Indefinite Life Intangible Assets with on-course patron restrictions in Victoria and less wagering product available on sport, interstate and international racing jurisdictions. As described in note 25(g), the consolidated entity assesses the recoverable amount of indefinite life Joint venture distributions were also impacted by Point of Consumption Tax (POCT) make whole arrangements agreed by the VicTAB joint venture parties and with the State Government in connection with the implementation of the POCT from 1 January 2019. From this date, intangible assets, by estimating the future cash flows, growth and discount rate at the end of each Product Fees received by the Victorian Racing Industry (VRI) are reduced by an amount equivalent to the increased wagering tax paid by annual reporting period. VicTAB following the introduction of POCT, as compared to the tax paid before POCT was introduced. Gross joint venture distributions attributable to the thoroughbred racing code of $157.698 million for the full year ended 30 June 2020 (2019: • Provisions $173.017 million) were reduced by $9.560 million in 2020 (2019: $4.645 million) as a direct impact of these POCT arrangements. As described in note 25(c) and 25(l), the consolidated entity estimates the present value of current (ii) Reflects Racing Victoria’s share of Racing.com advertising income received directly from Racing.com. The consolidated entity also benefits obligations based on management estimate for general provisions, WorkCover, employee provisions, indirectly from its expenditure contributions to Racing.com through growth in wagering and digital media rights revenue captured within defined benefit and contribution plans at the end of each annual reporting period. wagering and media revenue (notes 2 (a) and (b)). (iii) Refer note 8, interests in joint operations. • Useful lives of Property, Plant & Equipment and Computer Software & Databases As described in note 25(k), the consolidated entity reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period.

• Contingent Liabilities The consolidated entity makes judgement on any potential liability that may occur depending on the outcome of an uncertain future event. These liabilities are listed under note 23.

74 75 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 30 JUNE 2020 30 JUNE 2019 $’000 $’000 $’000 $’000

2. SURPLUS FROM OPERATIONS (CONTINUED) 2. SURPLUS FROM OPERATIONS (CONTINUED) (c) Other Revenue Surplus/(deficit) has been arrived at after charging the following expenses: POCT revenue (iv) 17,652 7,648 (d) Industry Expenditure Prizemoney contribution (v) 23,800 8,430 Prizemoney COVID Support (vi) 4,145 - Prize money (viii) 219,912 208,130 Racing revenue 2,433 2,459 VOBIS 9,315 11,041 VOBIS (vii) 598 6,851 229,227 219,171 Racecourse infrastructure program 13,808 13,968 Customer revenue 1,101 825 Club funding Industry service recoveries 1,424 1,480 Fixed 22,471 22,391 Rent income 951 933 Track and infrastructure 18,692 18,160 Other revenue 2,612 2,727 Wagering 13,343 14,004 68,524 45,321 Club grants (ix) 12,000 2,300 Media rights 24,354 23,216

Investment income Loan discounting 355 848 Distribution income 702 432 91,215 80,919 Interest income 1,632 2,019 Infrastructure Dividend income 263 346 Infrastructure operations 1,117 1,409 Foreign income 1,038 1,935 Infrastructure capital vested with clubs 14,513 21,004 3,635 4,732 15,630 22,413

Other gains and losses Participant Support Loss on disposal of investments (353) (78) Riding fees 12,567 12,226 Net gain/(loss) arising on financial assets designated as FVTPL (2,595) 1,048 Jockey workcover 5,107 6,002 (2,948) 970 Jockey welfare expense 2,561 2,403 69,211 51,023 Equine welfare expense (x) 3,315 3,801 Other participant support 1,517 1,184 (iv) Racing Victoria’s share of VRI Compensation Payment which was agreed to be paid to the Victorian Racing Industry by the State Government 25,067 25,616 following the introduction of POCT from 1 January 2019. (v) State Government commitment of $21.500 million to support increases to the minimum levels of thoroughbred prize money from 1 January 2019 361,139 348,119 and Club contributions to 2019 Spring Racing Carnival bonuses of $2.300 million. (vi) State Government COVID emergency funding commitment to assist with sustaining returns to participants, securing industry jobs, maintaining (viii) Significant increases to minimum prize money levels implemented from 1 January 2019 and further Spring enhancements from September 2019, participant and animal welfare standards, along with maintaining the viability of all clubs across the State. Total support of $16.580m was linked were partially offset by a subsequent reduction in prize money levels in response to COVID which were implemented from 1 April 2020. Prize to these project outcomes for the period between agreement execution at the beginning of June 2020 through to end of September 2020. money payments reported are net of amounts deducted and retained by Racing Victoria for jockey and equine welfare contributions. These Therefore, 1/4 of total funding has been accounted for with the balance of any upfront receipts located within unearned revenue. Note Racing amounts totalled 2% of prizemoney paid (1% each) for the July 2018 to 31 December 2019 period, however from 1 January 2020 this was increased Victoria was not eligible for JobKeeper or other available COVID support packages. to 3% (2% equine welfare, 1% jockey welfare).. (vii) VOBIS revenue does not include any State Government support (2019: $3.450 million) during the period. VOBIS revenue estimate methodology (ix) Special COVID related support grants of $12.000 million were paid to the Clubs in May and June 2020. No further amount was payable (2019: has also been reviewed and changed impacting 2020. Refer to note 1(a) for further detail. $2.300 million) relating to the Industry Sustainability Fund framework which allows for accumulated surplus funds above the agreed balance to be granted to clubs on terms and conditions approved by the Racing Victoria Board.. (x) During the period RV committed to spending $25.000 million over 3 years to accelerate and expand the Equine Welfare Strategic Plan. Early focus has been on planning and assessing potential programs. Major investment outflows are expected to significantly increase over the next two years.

76 77 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 30 JUNE 2020 30 JUNE 2019 $’000 $’000 $’000 $’000

2. SURPLUS FROM OPERATIONS (CONTINUED) 2. SURPLUS FROM OPERATIONS (CONTINUED)

(e) Wagering Services Expenditure (g) Operational Expenditure Wagering operations expense 1,273 1,373 Customer Wagering development fund 1,658 2,139 Marketing expense 6,299 7,477 Joint venture contributions 1,821 2,081 Industry communications expense 1,630 1,466 Bookmakers development fund 111 97 7,929 8,943 Other expense (33) 411 4,830 6,101 Racing Raceday services expense 11,027 10,291 (f) Media Services Expenditure Racing operations expense 4,042 3,920 RV share of Racing.com (xi) 16,638 16,206 15,069 14,211 Race callers expense 862 847 Formguide expense 1,597 2,006 Integrity and Veterinary Race vision services 8,255 8,089 Integrity expense 6,666 6,209 Publications expense 5,399 5,526 Legal expense 1,476 1,476 Radio Sport National funding 1,136 1,391 Veterinary expense 957 958 Media infrastructure expense 3,843 3,675 Swabbing expense 1,962 2,352 Production expense 2,303 2,301 11,061 10,995 Other expense 3,182 2,902 43,215 42,943 Administration and Other Services and administration expense 9,052 9,852

(xi) Refer note 8, interests in joint operations. Racing Victoria contributes $12.166 million in direct funding which represents 88.6% of all funding Legal expense 1,432 1,791 contributed to Racing.com by its shareholders. Racing Victoria also recognises a non-cash expenditure adjustment of $4.471 million at year end Occupancy expense 1,943 1,838 representing its 20% share of all Racing.com expenditure that is not directly funded by Racing.com shareholders throughout the year. Strategy and projects 721 1,207 Information technology 4,262 4,413 Fleet costs 372 334 Depreciation and amortisation 3,036 2,765 Asset write down 180 770 Restructure plan 463 1,125 Doubtful debts (331) 649 Other 2,207 2,146 23,337 26,890 57,396 61,039

78 79 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 30 JUNE 2020 30 JUNE 2019 $’000 $’000 $’000 $’000

2. SURPLUS FROM OPERATIONS (CONTINUED) 3. CURRENT TRADE AND OTHER RECEIVABLES

Expenses from ordinary activities include: Trade receivables (i) 9,448 22,363 Employee benefits expense 23,231 24,484 Allowance for doubtful debts (ii) (622) (979) Defined benefit superannuation plan expense 168 153 8,826 21,384 Depreciation of non-current assets: Joint venture fees receivable 9,490 12,994 - Property, plant and equipment 1,937 2,113 Media rights receivables 5,558 3,961 Amortisation of non-current assets: Sundry receivables 16,437 3,331 - Computer software and databases 1,483 719 40,311 41,670 Operating expenses – other related party: - Australian Racing Museum 605 650 (i) The majority of trade receivables arise as a result of transactions with wagering service providers, trainers and racing clubs with credit periods provided at 10 days, 60 days and 30 days respectively. Other receivables include amounts to be received from Government in relation to the Impairment loss 1,628 - VTRI share of the VRI POCT Compensation Payment paid 60 days in arrears. A provision has been made for estimated non recoverable amounts from these receivables, determined by reference to past default experience. (ii) Loss allowances for trade receivables are measured at an amount equal to lifetime Expected Credit Losses (ECLs). When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the consolidated entity considers reasonable and supportable information that is relevant and available without undue cost or effort. This is determined by reference to past default experience. Reconciliation of doubtful debts.

Allowance for doubtful debts at the beginning of the period 979 358 - Bad debts written off (26) (28) - Doubtful debts movement taken to surplus or deficit (331) 649 Allowance for doubtful debts at the end of the period 622 979

80 81 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 5. PROPERTY, PLANT AND EQUIPMENT

$’000 $’000 Infra- Freehold Plant & Buildings structure Total Land Equipment Capital 4. OTHER FINANCIAL ASSETS $’000 $’000 $’000 $’000 $’000 Current: Gross carrying amount (at cost) Financial assets designated as FVTPL Balance at the beginning of the period 11,032 6,593 7,746 8,642 34,013 Australian shares 7,905 5,754 Additions 24 - 219 2,129 2,372 International shares 16,389 14,611 Assets written off - - - (212) (212) Interest bearing securities 47,078 54,882 Balance at the end of the period 11,056 6,593 7,965 10,559 36,173 71,372 75,247

Accumulated Depreciation Financial assets measured at amortised cost Balance at the beginning of the period (3,348) - (5,131) (4,819) (13,298) Cash investments 19,968 6,120 Assets written off - - - 120 120 Cash deposits - Jockey apprentice and career benefit (i) 2,389 3,368 Depreciation expense (356) - (677) (904) (1,936) Loans to related parties - Racing.com Club shareholders (ii) 400 1,600 Balance at the end of the period (3,703) - (5,808) (5,603) (15,114) Loans to related party - Ballarat Turf Club (iv) 479 - Loans to related party - Wangaratta Turf Club (iv) 85 - Net Book Value 23,321 11,088 As at the beginning of the period 7,684 6,593 2,615 3,823 20,715 94,693 86,335 As at the end of the period 7,353 6,593 2,157 4,956 21,059

Non Current: Financial assets measured at amortised cost 30 JUNE 2020 30 JUNE 2019 Loans to related party - Victoria Racing Club (iii) 5,983 5,635 $’000 $’000 Loans to related party - Pakenham Racing Club (iii) 2,193 2,399 Loans to related party - Ballarat Turf Club (iv) 2,547 - Aggregate depreciation allocated and recognised as an expense during the period:

Loans to related party - Wangaratta Turf Club (iv) 877 - Buildings 355 326 Loans to related party - Sports Wagering Integrity Monitoring Ltd (v) 523 406 Infrastructure capital 677 702 12,123 8,440 Plant and equipment 904 1,086 1,936 2,114 (i) Racing Victoria ceased making career benefit contributions to jockeys on commencement of superannuation contributions in 2015. Jockey career benefit funds that remained within jockey accounts were transferred to the management and control of the Victorian Jockeys Association during the period. (ii) Racing Victoria provided loans to the other Racing.com shareholders (Country Racing Victoria, Melbourne Racing Club, Moonee Valley Racing Club and Victoria Racing Club) in equal value to support the development of the Racing.com digital and mobile application platform. Loan repayments have been received from three of the four shareholders at 30 June 2020. (iii) Racing Victoria provided loans to Victoria Racing Club and Pakenham Racing Club (PRC). These loans totalling $10.000 million and $4.976 million respectively have been provided at discount-to-market rates and recognised at amortised cost. The repayment of the PRC loan totalling $4.976 million is subordinated to bank loans that the Club has in place. After reviewing PRC’s most recent forecast cash outlook, it is the view of Racing Victoria that it is appropriate to recognise a further loan discount of $0.354 million as at 30 June 2020 reflecting the delay of the expected repayment of Racing Victoria’s loan. (iv) Racing Victoria has provided loans to the Ballarat Turf Club and Wangaratta Turf Club during the period at market rates, with scheduled repayments being deducted from club funding payable. (v) Racing Victoria has provided a loan to Sports Wagering Integrity Monitoring Ltd (SWIM) to fund the capital costs of developing a transaction level wagering and betting monitoring system.

82 83 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

6. INTANGIBLE ASSETS 7. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Racing. Name of entity Principal activity Balance date Ownership interest Carrying amount Computer com software & Mastheads Goodwill Total Domain 2020 2019 2020 2019 databases name $’000 $’000 $’000 $’000 $’000 $’000 $’000 Racing Australia Ltd Racing Information 30/06/2020 35% 35% 12,788 11,657 Gross carrying amount (at cost) Significant influence is derived over Racing Australia Ltd through the Board’s appointment of a nominee Balance at the beginning of the period 6,693 2,052 4,725 947 14,417 director. Pursuant to a shareholder agreement the consolidated entity has the right to cast 35% of the votes Additions 1,870 - - - 1,870 at a shareholder meeting. Assets written off (150) (701) (926) - (1,777) 30 JUNE 2020 30 JUNE 2019 Balance at the end of the period 8,413 1,351 3,799 947 14,510 $’000 $’000

Accumulated Amortisation Movements in investments in associates Balance at the beginning of the period (3,580) - - - (3,580) At the beginning of the financial period 11,657 10,123 Assets written off 3 - - - 3 Share of profit 1,131 1,534 Amortisation expense (1,483) - - - (1,483) At the end of the financial period 12,788 11,657 Balance at the end of the period (5,060) - - - (5,060)

Net Book Value As at the beginning of the period 3,113 2,052 4,725 947 10,837 As at the end of the period 3,353 1,351 3,799 947 9,450

As of 30 June 2020, the consolidated entity had recognised Goodwill of $3.799 million (2019: $4.725 million) and Mastheads of $1.351 million (2019: $2.052). During the year, the consolidated entity recognised an impairment loss of $1.628 million (2019: $0 million) in relation to the Winning Post cash generating unit. This is now fully impaired.

84 85 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

8. INTERESTS IN JOINT OPERATIONS 30 JUNE 2020 30 JUNE 2019 $’000 $’000 The consolidated entity has the following significant interests in joint operations: 9. CURRENT TRADE AND OTHER PAYABLES A 20% shareholding (2019: 20%) in an unincorporated joint arrangement relating to the development and operation of the digital and television platform, Racing.com Pty Ltd (Racing.com). The remaining 80% Trade payables 5,922 12,457 shareholding in Racing.com resides with the Melbourne Racing Club, Victoria Racing Club, Moonee Valley Joint venture payable 2,071 2,185 Racing Club and Country Racing Victoria in equal 20% shares. Racing Victoria continued its commercial joint venture arrangement with Seven West Media (SWM) to facilitate the Racing.com broadcast business, Prize money accruals 3,419 4,395 pursuant to which Racing Victoria have a number of expenditure commitments as set out further below. Sundry payables 18,596 13,110 The principal place of business of Racing.com Pty Ltd is Victoria, Australia. Club grants payable - 2,300 Media rights payable 5,456 5,458 The consolidated entity has accounted for its share of the Racing.com Pty Ltd joint operation as follows: Jockey apprentice and career benefit payables 2,389 3,369 30 JUNE 2020 30 JUNE 2019 GST payable 2,759 3,128 $’000 $’000 40,612 46,402 Revenue RV share of Racing.com (i) 4,499 4,146 4,499 4,146 10. UNEARNED REVENUE

Expenditure Current: Directly incurred costs: (ii) Government receipts 22,854 5,200 Digital contribution 3,369 3,641 VOBIS receipts (i) 1,049 569 Television production contribution 8,087 8,196 23,903 5,769 Management contribution 710 700 12,166 12,537 Non current: RV share of Racing.com (iii) 4,471 3,669 VOBIS receipts (i) 2,241 370 16,637 16,206 2,241 370

Financial position movement: (i) VOBIS revenue estimate methodology has also been reviewed and changed impacting 2020. Refer to note 1(a) for further detail. Current assets 693 533 Non-current assets 24 465 Current liabilities (703) (495) Non-current liabilities 5 (26) 19 477

(i) Accounting for joint operations includes Racing Victoria taking up a non-cash year end amount representing its 20% share of all Racing.com revenue. (ii) Racing Victoria contributes $12.166 million in direct funding which represents 88.6% of all funding contributed to Racing.com by its shareholders. More specifically, Racing Victoria direct shareholder contributions represent 68.3% of all digital and 100% of all television production contributions received by Racing.com. (iii) Accounting for joint operations includes Racing Victoria taking up a non-cash year end amount representing its 20% share of all Racing.com expenditure outside directly funded shareholder contributions towards digital, television production and management as set out above.

86 87 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 30 JUNE 2020 30 JUNE 2019

$’000 $’000 $’000 $’000

11. PROVISIONS 14. COMMITMENTS FOR EXPENDITURE

Current: (a) Broadcast contract:

Employee benefits 7,660 7,380 Not later than 1 year 8,575 8,462 7,660 7,380 Later than 1 year but not later than 5 years 26,440 26,440 35,015 34,902 Non-Current: Accident claims (i) (Note 26(l)) 2,894 2,894

Employee benefits 523 544 Broadcast contract relates to the supply of outside broadcasting services to the Victorian Thoroughbred 3,417 3,438 Racing Industry by Thoroughbred Racing Productions (TRP). Racing Victoria entered into a contract on 18 October 2018 with an effective date of 1 August 2019 covering a 5 year term.

(i) Accident claims (b) The consolidated entity has undertaken to provide financial support to the Australian Racing Museum Balance at beginning of the period 2,894 2,894 to a maximum of $0.700 million (indexed) for ten years from 2020/21 ceasing 2029/30. Additional provisions - - Balance at end of the period 2,894 2,894 15. SUPERANNUATION COMMITMENTS

The employees of the consolidated entity are members of Victorian Racing Industry Superannuation Fund, 12. ISSUED CAPITAL which also includes employees of the Victoria Racing Club and Country Racing Victoria. The fund has a composition of defined benefit and accumulation membership. The entity is a company limited by guarantee. Every member undertakes to and must contribute an amount not exceeding $10 in the event of the winding up of the entity. The financial information of the fund disclosed in this report relates to the employees of the consolidated entity.

Under the defined benefit plan, employees are entitled to retirement benefits based on a multiple of their $’000 $’000 deemed final salary upon attainment of their retirement age of 60. No other post-retirement benefits are provided to these employees. 13. RETAINED EARNINGS The defined benefit plans are funded plans. The net loss for the period determined in the plans most recent Balance at beginning of financial period 143,851 135,512 financial report, being the annual reports for the financial period ended 30 June 2020, was -$0.174 million (2019: $0.239 million surplus). The plan actuaries have recommended that no additional contributions Net surplus 10,728 8,801 beyond the current contribution level be made, with an employer contribution holiday recommended Actuarial (losses)/gains (245) (462) until 30 September 2021. Funding recommendations are made by the actuaries based on their forecast of Balance at end of financial period 154,334 143,851 various matters, including future plan assets performance, interest rates and salary increases.

The consolidated entity has a legal liability to make up a cumulative deficit in the plans but no legal right to use any surplus in the plans to further its own interests.

88 89 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

15. SUPERANNUATION COMMITMENTS (CONTINUED) 30 JUNE 2020 30 JUNE 2019

$ $ 30 JUNE 2020 30 JUNE 2019 $’000 $’000 17. REMUNERATION OF AUDITORS

Amounts recognised in income in respect of the defined benefit plan is as follows: Audit of the financial report 89,000 89,000 Current service cost 173 184 Other assurance services 102,224 112,000 Net Interest (6) (31) 191,224 201,000 Total including employee benefit expense 167 153 Actuarial gains/(losses) during the period and recognised in the The auditor of Racing Victoria Limited is KPMG. statement of changes in equity (245) (462) Cumulative actuarial gains recognised in the statement of changes in equity 2,399 2,644 18. SUBSIDIARIES

Details of the consolidated entity's material subsidiaries at the reporting period are as follows: The amount included in the statement of financial position arising from the consolidated entity’s obligations in respect of its defined benefit plan is as follows: Country of Ownership interest Ownership interest Name of entity Present value of funded defined benefit obligations (4,539) (4,630) incorporation 2020 2019

Fair value of plan assets 4,365 4,869 % % Net asset arising from defined benefit obligations (174) 239 RVL Media Pty Ltd Australia 100 100 RVL Media International Pty Ltd Australia 100 100

16. KEY MANAGEMENT PERSONNEL REMUNERATION RVL Media Pty Ltd and RVL Media International Pty Ltd are subsidiaries responsible for the aggregation of The aggregate compensation of key management personnel (which includes the CEO and all members of club media rights and commercialisation via domestic, international and digital platforms. the Executive Management Team and all Directors of the consolidated entity) is set out below:

Management Short-term employee benefits 3,066 3,571 Other long-term benefits 19 92 Termination benefits - 483 3,085 4,146

Non executive directors Short-term employee benefits 481 636 Other long-term benefits 6 11 487 647

FY20 remuneration includes decreases implemented during the COVID-19 period (April – June). Remuneration decreased for Directors by 50% and Executive members by 20%.

90 91 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 During the financial period the consolidated entity entered into transactions with the following entities that require key management personnel to act in the capacity of director as part of their Racing Victoria $’000 $’000 employment – VicRacing Pty Ltd, Racing Products Victoria Pty Ltd, Australian Racing Museum Ltd, Racing 19. PARENT ENTITY FINANCIAL INFORMATION Australia Ltd, Racing.com Pty Ltd, Racing Analytical Services Ltd, Radio 3UZ Pty Ltd (RSN) and Sports Wagering Integrity Monitoring Ltd. These transactions included both revenue and operational expenditure, Assets with expenditure incurred only after approval by the Racing Victoria Board. The consolidated entity also provided administrative services to some of these director related entities on normal commercial terms and Current assets 163,737 146,027 conditions as agreed by the parties Non-current assets 55,246 51,985 Total assets 218,983 198,012 Revenue Expenditure Current liabilities 66,413 54,087 $’000 $’000 Non-current liabilities 5,658 3,808 VicRacing Pty Ltd 80,163 644 Total liabilities 72,071 57,895 Racing Products Victoria Pty Ltd 90,271 81 Australian Racing Museum Ltd 62 605 Shareholders’ equity Racing Australia Ltd 110 2,499 Retained earnings 146,912 140,117 Racing.com Pty Ltd (i) 4,987 12,344 Total equity 146,912 140,117 Racing Analytical Services Ltd 1,699 1,998 Profit for the period 7,138 5,303 Radio 3UZ Pty Ltd (RSN) 3 1,136 Total comprehensive income for the period 6,893 4,841 Sports Wagering Integrity Monitoring Ltd 17 - 177,312 19,307 All contingent liabilities of the parent company are consistent with those listed in Note 24 of the consolidated entity.

(i) Amounts do not align with Racing.com revenue and expenditure disclosed within notes 2 and 8, as the above transactions amounts exclude accounting for joint operations amounts based on Racing Victoria’s 20% shareholding. The above transaction amounts also include: 20. SEGMENT REPORTING • revenue from industry service recoveries for the provision of administration services; and • expenditure for race callers managed by Racing.com. The consolidated entity operates in the thoroughbred racing industry in the State of Victoria.. Transactions with member related entities 21. RELATED PARTY DISCLOSURES During the financial period the consolidated entity entered into transactions with current membership entities of Racing Victoria. These member entities comprise club members and industry body members (a) Equity interests in associates and joint arrangements as listed under the current membership within note 1 of the financial report. These transactions included Details of interests in associates and joint arrangements are disclosed in notes 7 and 8 to the financial revenue and expenditure, with expenditure incurred only after approval by the Racing Victoria Board. The statements. consolidated entity also provided loans to some club members on terms and conditions as agreed by the parties, refer to note 4. (b) Key management personnel compensation Details of key management personnel compensation including directors are disclosed in note 16 to the financial statements.

(c) Transactions with key management personnel Key management personnel, including certain directors, participate in the thoroughbred racing industry via means of ownership of race horses either individually or through related entities. This involvement is on terms and conditions no more favourable than other participants in the thoroughbred racing industry.

(d) Other related party disclosures Transactions with key management personnel and their related entities During the financial period the consolidated entity did not enter into any transactions with related entities of key management personnel.

92 93 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

30 JUNE 2020 30 JUNE 2019 23. CONTINGENT LIABILITIES

$’000 $’000 • Under the Deed of Contribution and Indemnity with the Victoria Racing Club, the consolidated entity has 22. NOTES TO THE STATEMENT OF CASH FLOWS indemnified the Victoria Racing Club against any claims against the Victoria Racing Club arising from its previous operation of the thoroughbred racing industry in Victoria. (a) Reconciliation of cash • Racing Victoria has guaranteed a loan facility of Pakenham Racing Club Inc. of $5.000 million (2019: For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand and in $5.000 million). banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the financial period as shown in the statement of cash flows is reconciled to the related items in the statement of financial • On 13 September 2019, the Victorian Civil and Administrative Tribunal (VCAT) handed down its decisions position as follows: regarding appeals lodged by certain trainers in relation to the Aquanita Case. On 31 December 2019, VCAT handed down its decision with respect to penalty. Cash at bank 41,660 27,148 Once all avenues of appeal by the parties had been exhausted, RV Stewards considered whether any of the horses associated with the matter ought be disqualified from their relevant races. On 7 July 2020, (b) Reconciliation of net profit to net cash flows from operating activities the Stewards sent 81 show cause letters, in which they sought submissions from managing owners of the relevant horses as to whether their horse ought be disqualified from its race. The deadline for the return of Profit from ordinary activities 10,728 8,800 those submissions was set at 10 August 2020. At the time of preparation, the Stewards are still considering Share of associates (profit) (1,131) (1,534) the submissions provided and are not yet ready to deliver their final decisions. No decision has yet been Depreciation & amortisation of non-current assets 3,419 2,831 made as to whether, in the event those horses are disqualified, RV will seek to recover any prize money afforded to connections of disqualified horses. Asset written off & impairment of non-current assets 1,808 771

Actuarial movement loss 168 153 The disqualification of any horse(s) will bring rise to a future liability through the upgrading of placings and Managed investment gain 26 (4,616) the consequent payment of revised prize money (particularly where prize money awarded to connections Loan discount unwind (495) (516) of disqualified horses has not or cannot be recovered). Loan discount to market 353 848 Following a review of the facts and details available as at the date of signing the accounts, RV believes that Changes in net assets & liabilities: the allowance made in the accounts for those horses which are the subject of current consideration by RV (Increase)/decrease in: Stewards remains appropriate, however it remains unclear whether, if any horse should be disqualified, RV will either seek to or be able to subsequently recover these amounts, whilst there also still remains some Receivables 1,359 1,119 possibility that categories that are not currently under consideration for disqualification by the RV Stewards Prepayments (86) (27) could present further risk of potential future liability. Increase/(decrease) in: Other than that noted above, there has not been any matter or circumstance occurring subsequent to the Payables (4,811) 6,634 end of the period that has significantly affected or may affect the operations of the consolidated entity, the Unearned revenue 20,005 5,011 results of those operations or the state of affairs of the consolidated entity in future financial periods. Provisions 259 1,406 Net cash provided by operating activities 31,602 20,880 24. SUBSEQUENT EVENTS

Subsequent to 30 June 2020, on 6 August 2020 RV terminated its previous free to air (FTA) channel partnership agreements with Seven West Media Limited (SWM) which were due to expire in August 2020, and executed a new 5 year Channel and Premium Race Meeting Agreement with SWM. This new agreement replaces all previous agreements with SWM and secures, on new terms, access for Racing Victoria’s racing channel ‘Racing.com’ to continue to be broadcast on Channel 78 until 2025. SWM will also be entitled to broadcast up to 21 premium feature Victorian race meetings on its main FTA channels over the same period.

A number of media rights arrangements with third parties with renewal dates in August 2020 have either been renewed or are currently in the process of being renewed by Racing Victoria. These multi-year media rights agreements are with various third party media distribution partners and customers including wagering service providers, FTA channel partners and subscription / pay tv providers.

94 95 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

Racing Victoria is working with its three metropolitan clubs to agree upon terms of new annual Club Defined Contribution Plans funding arrangements, following the expiry of the most recent three-year agreements which ended on 31 Contributions to defined contribution superannuation plans are expensed when incurred. July 2020. The Country Clubs funding agreement was extended on 1 August 2020 at the option of CRV. Defined Benefit Plans Racing Victoria has also confirmed on 24 September 2020 that it intends to provide its four member clubs For defined benefit superannuation plans, the cost of providing benefits is determined using the with further funding support totaling $15.000 million by way of special grants from accumulated surplus projected unit credit method, with actuarial valuations being carried out at each reporting date. funds in the ISF. This funding will provide much needed financial assistance to Clubs over the upcoming Actuarial gains and losses are recognised in full, directly in retained earnings, in the period in which 2020 Spring Racing Carnival period. This funding will assist Clubs to help manage the impact of lost they occur. attendance, media, membership, sponsorship and hospitality revenues as a consequence of the ongoing impact of COVID-19 during what is typically the peak earnings period for Clubs. In addition, Racing Victoria Past service is recognised immediately to the extent that the benefits are already vested, and will also provide funding for Spring Racing Carnival prizemoney top ups, previously funded by Clubs, otherwise is amortised on a straight-line basis over the average period until the benefits become totalling $4.805 million. These amounts are both over and above the $12.000 million already paid to Clubs vested. in additional funding support in May and June 2020. The defined benefit obligation recognised in the statement of financial position represents the present Other than that noted above, there has not been any matter or circumstance occurring subsequent to the value of the defined benefit, net of the fair value of the plan assets. Any asset resulting from this end of the period that has significantly affected or may affect the operations of the consolidated entity, the calculation is limited to past service cost, plus the present value of available refunds and reductions in results of those operations or the state of affairs of the consolidated entity in future financial periods. future contributions to the plan.

25. SIGNIFICANT ACCOUNTING POLICIES (d) Financial assets

The following significant accounting policies have been adopted in the preparation and presentation of the Classification and measurement of financial assets financial report: All recognised financial assets that are within the scope of AASB 9 are required to be subsequently measured at amortised cost or fair value on the basis of the entity’s business model for managing the (a) Borrowings and Borrowing Costs financial assets and the contractual cash flow characteristics of the financial assets. Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition, borrowings are measured at amortised cost with any difference between the initial Specifically: recognised amount and the redemption value being recognised in profit and loss over the period of the borrowing using the effective interest rate method. • debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest Other borrowing costs are recognised as an expense in the period in which they are incurred. on the principal amount outstanding, are subsequently measured at amortised cost;

• all other debt investments and equity investments are subsequently measured at fair value through (b) Cash and Cash Equivalents profit and loss (FVTPL). Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant Despite the foregoing, the consolidated entity may make the following irrevocable election/ risk of changes in value. designation at initial recognition of a financial asset:

(c) Employee Benefits • the consolidated entity may irrevocably elect to present subsequent changes in fair value of an A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual equity investment that is neither held for trading nor contingent consideration recognised by an leave, long service leave, and sick leave when it is probable that settlement will be required, and they acquirer in a business combination to which IFRS 3 applies in other comprehensive income; and are capable of being measured reliably. • the consolidated entity may irrevocably designate a debt investment that meets the amortised cost Liabilities recognised in respect of employee benefits expected to be settled within 12 months are or fair value through profit and loss (FVTOCI) criteria as measured at FVTPL if doing so eliminates measured at their nominal values, using the remuneration rate expected to apply at the time of or significantly reduces an accounting mismatch. settlement. Debt instruments that are subsequently measured at amortised cost or at FVTOCI are subject to Liabilities recognised in respect of employee benefits which are not expected to be settled within 12 impairment. months are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to the reporting date.

96 97 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

Impairment of financial assets (f) Goods and Services Tax

In relation to the impairment of financial assets, AASB 9 requires an expected credit loss (ECL) model as Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), opposed to an incurred credit loss model under IAS 39. The ECL model requires the consolidated entity to except: account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other words, it is no longer (i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised necessary for a credit event to have occurred before credit losses are recognised. as part of the cost of acquisition of an asset or as part of an item of expense; or

The consolidated entity reviewed its related party loan receivables for impairment under the General (ii) for trade receivables and payables which are recognised inclusive of GST. Approach to determine whether there has been a Significant Increase in Credit Risk (SICR) since initial recognition and whether loans are credit impaired. This determines whether the loans are in Stage 1, Stage The net amount of GST recoverable from, or payable to, the taxation authority is included as part of 2, or Stage 3, which in turn determines both; receivables or payables.

• the amount of ECL to be recognised: 12-month ECL or Lifetime ECL; and Cash flows are included in the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from or payable to the • the amount of interest income to be recognised in future reporting periods: Effective Interest Rate (EIR) taxation authority is classified as operating cash flows. based on gross carrying amount of the loan which excludes ECL or the net carrying amount (i.e. the amortised cost) which includes ECL. (g) Impairment of Other Tangible and Intangible Assets Lifetime ECL are the ECL that result from all possible default events over the expected life of loans whereas 12-month ECL are a portion of Lifetime ECL that represent the ECL that result from default events that are At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and possible within 12 months of the reporting date. intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to The consolidated entity reviewed its related party loans and assessed that none of the loans have suffered determine the extent of the impairment loss (if any). Where the asset does not generate cash flows SICR with no further credit losses recognised within 12 months of the reporting date. that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash generating unit to which the asset belongs. Where a reasonable and consistent basis can be Loss allowances for trade receivables are measured at an amount equal to lifetime ECLs. When determining identified, corporate assets are also allocated to individual cash generating units, otherwise they are whether the credit risk of a financial asset has increased significantly since initial recognition and when allocated the smallest group of cash generating units for which a reasonable and consistent allocation estimating ECLs, the consolidated entity considers reasonable and supportable information that is relevant basis can be identified. and available without undue cost or effort. This is determined by reference to past default experience. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested Loans and Receivables for impairment annually and whenever there is an indication that the asset may be impaired. Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value amortised cost using the effective interest method less impairment interest which is recognised by applying in use, the estimated future cash flows are discounted to their present value using a pre-tax discount effective interest rates. rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. Notwithstanding this, value in use is depreciated replacement cost of an asset when the future economic benefits of the (e) Financial Instruments issued by the consolidated entity asset are not primarily dependent on the asset’s ability to generate net cash inflows and where the consolidated entity would, if deprived of the asset, replace its remaining future economic benefits. If Debt and Equity Instruments the recoverable amount of an asset (or cash-generating unit) is estimated to be less than it’s carrying Debt and equity instruments are classified as either liabilities or as equity in accordance with the amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. substance of the contractual arrangement. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease. Interest Interest is classified as an expense consistent with the balance sheet classification of the related debt. Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior periods. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

98 99 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

(h) Intangible Assets (j) Payables

Capitalised Software and Databases Trade payables and other accounts payable are recognised when the consolidated entity becomes Capitalised software is recorded at cost less accumulated amortisation and impairment. Amortisation obliged to make future payments resulting from the purchase of goods and services. Trade and other is charged on a straight-line basis over the estimated useful life of the software being five years. payables are stated at amortised cost.

Mastheads Mastheads recognised by the Group by nature have an indefinite useful life and are not amortised. (k) Property, Plant and Equipment Each period, the useful life of this asset is reviewed to determine whether events and circumstances continue to support an indefinite useful life assessment for the asset. Such assets are tested for Plant and equipment, buildings and infrastructure capital are stated at cost less accumulated impairment in accordance with the policy stated in note 26(g). depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is Domain Names determined by discounting the amounts payable in the future to their present value as at the date of Domain Names recognised by the Group have an indefinite useful life and are not amortised. Each acquisition. period, the useful life of this asset is reviewed to determine whether events and circumstances continue to support an indefinite useful life assessment for the asset. Such assets are tested for Depreciation is recognised on property, plant and equipment, including freehold buildings but impairment in accordance with the policy stated in note 26(g). excluding land. Depreciation is calculated on a straight-line basis to write-off the net cost or other revalued amount of each asset over its expected useful life to its residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life; whichever is the (i) Leased Assets shorter, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period, with effect of any changes AASB 16 Leases introduces a single, on-balance sheet lease accounting model for lessees, in a similar recognised on a prospective basis. way to the accounting treatment for finance leases under AASB 117 Leases. Under AASB 16, a lessee recognises a right-of-use asset representing its right-to-use the underlying asset and a lease liability The following estimated useful lives are used in the calculation of depreciation: representing its obligations to make lease payments. RVL does not have any material right-of-use assets or lease liabilities on the balance sheet. Buildings and Improvements 10 to 40 years

The consolidated entity has considered the impact of implementing AASB16 in relation to the Plant and Equipment 2 to 20 years following: Infrastructure Capital 5 to 10 years • Leasehold property and equipment where it is a lessee; and During the period the consolidated entity undertook the management of projects which are part of • Agreements which provide a right to occupy a room the capital infrastructure program. These projects are individually assessed for appropriateness of recognition as assets within the consolidated statement of financial position of the consolidated entity. The consolidated entity reviewed and assessed that there is no impact on the above for the financial The key elements for recognition of any capital expenditure as an asset are control and ensuring that period. future economic benefits will flow to the consolidated entity.

Furthermore, AASB 16 retains the AASB 17 Leases accounting treatment for lessors requiring a lease to be classified as a finance lease if substantially all of the risk and rewards incidental to ownership of the (l) Provisions leased asset have been transferred to the lessee or otherwise to be classified as an operating lease. Provisions are recognised when the consolidated entity has a present obligation (legal or constructive) To alleviate concerns the AASB released AASB 2018-8: Amendments to Australian Accounting as a result of a past event, it is probable that the consolidated entity will be required to settle the Standards – Right-of-Use Assets of Not-for-Profit Entities. AASB 2018-8 amends AASB 1, AASB 16, obligation, and a reliable estimate can be made of the amount of the obligation, the future sacrifice for AASB 117, AASB 1049 and AASB 1058 to provide a temporary option for not for profit entities to elect economic benefits is probable, and the amount of the provision can be measured reliably. to measure a class (or classes) of right-of-use assets arising under concessionary leases at initial recognition either at cost or at fair value. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding The Standard requires an entity that elects to apply the cost option to include additional disclosures the obligation. Where a provision is measured using the cashflows estimated to settle the present in the financial statements to ensure users understand the effects on the financial position, financial obligation, its carrying amount is the present value of those cashflows. performance and cash flows of the entity arising from these leases. The consolidated entity reviewed and assessed that they would elect to apply the cost option for the financial period. When some or all of the economic benefits required to settle a provision are expected to be recovered

100 101 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

from a third party, the receivable is recognised as an asset if it is virtually certain that reimbursement Government grants are recognised in profit or loss on a systematic basis over the periods in which will be received, and the amount of the receivable can be measured reliably. the consolidated entity recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the consolidated Accident Insurance Fund entity should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a Prior to 1 September 1985 the Fund was an authorised insurer for the purposes of the Workers systematic and rational basis over the useful lives of the related assets. Compensation Act 1958. The provision for outstanding claims is disclosed at note 11. The provision is reviewed annually by management having regard for material events impacting the calculation of the Government grants that are receivable as compensation for expenses or losses already incurred or for provision. the purpose of giving immediate financial support to the consolidated entity with no future related costs are recognised in profit or loss in the period in which they become receivable.

(m) Revenue VOBIS Nominations Following application of AASB 15, a proportion of VOBIS nomination revenue will be deferred into The consolidated entity recognises revenue when it transfers control over a product or service to a unearned revenue, to be recognised as revenue in future years. The estimation methodology of the customer. Revenue is measured at the fair value of the consideration received or receivable. Revenue is performance obligation is the proportion of VOBIS bonuses on offer to eligible horses as either a 2 reduced for estimated customer returns, rebates and other similar allowances. year-old or 3 year-old horse.

Wagering Revenue This differs from the proportion determined in 2019 which was based upon applying a further Thoroughbred racing industry revenue is recognised when receivable under the joint venture and estimation of the likelihood of a nominated horse winning a VOBIS bonus as either a 2 year-old or information supply agreements with the Tabcorp group of companies. 3 year-old horse. The impact of this change in estimate is a further deferral of VOBIS revenue to unearned revenue that will transact over both the 2020 and 2021 financial years, reflecting the fact Race fields revenue is recognised when receivable under the policy applied to all licensed wagering that the amounts relate to receipts dating back to the 2019 year and the deferral was for a period of service providers for the publication and use of Victorian thoroughbred race fields. up to 2 years.

Rendering of Services Revenue from a contract to provide services is recognised by reference to the stage of completion of (n) Income Tax the contract. The stage of the contract is determined as follows: The consolidated entity is exempt from Income Tax under section 50-45 of the Income Tax • installation fees are recognised by reference to the stage of completion of the installation, Assessment Act. determined as the proportion of the total time expected to install that has elapsed at reporting date; (o) Investments in Associates • servicing fees included in the price of products sold are recognised by reference to the proportion of the total cost of providing the servicing for the product sold, taking into account historical An associate is an entity over which the consolidated entity has significant influence. Significant trends in the number of services actually provided on past goods sold; and influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. • revenue from time and material contracts is recognised at the contractual rates as labour hours are delivered and direct expenses incurred. The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting, except when the investment, or a portion thereof, Contributions of Assets is classified as held for sale, in which case it is accounted for in accordance with AASB 5. Under the Revenue arising from the contribution of assets is recognised when the consolidated entity gains equity method, an investment in an associate is initially recognised in the consolidated statement of control of the contribution or the right to receive the contribution. financial position at cost and adjusted thereafter to recognise the Group’s share of the profit or loss and other comprehensive income of the associate. Interest revenue Interest revenue is accrued on a time basis, by reference to the principal outstanding and effective An investment in an associate is accounted for using the equity method from the date on which the interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through investee becomes an associate. On acquisition of the investment in an associate, any excess of the cost the expected life of the financial asset to the assets carrying amount. of the investment over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of the investment. Government Grants Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the Government grants are not recognised until there is reasonable assurance that the consolidated entity cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in will comply with the conditions attaching to them and that the grants will be received. which the investment is acquired.

102 103 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020 FOR THE YEAR ENDED 30 JUNE 2020

The requirements of AASB 139 are applied to determine whether it is necessary to recognise any for the period then ended. Racing Victoria and its subsidiaries together are referred to in this financial impairment loss with respect to the Group’s investment in an associate. When necessary, the entire report as the group or the consolidated entity. carrying amount of the investment (including goodwill) is tested for impairment in accordance with Subsidiaries are all entities (including special purpose entities) over which the consolidated entity has AASB 136 ‘Impairment of Assets’ as a single asset by comparing its recoverable amount (higher of control. Control is achieved when the Company: value in use and fair value less costs of disposal) with its carrying amount, any impairment loss • has power over the investee; recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the • is exposed, or has rights, to variable returns from its involvement with the investee; and investment subsequently increases. • has the ability to use its power to affect its returns. The Group discontinues the use of the equity method from the date when the investment ceases to be an associate, or when the investment is classified as held for sale. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the (p) Interests in Joint Operations voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement the Company’s voting rights in an investee are sufficient to give it power, including: have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about • the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the relevant activities require unanimous consent of the parties sharing control. the other vote holders;

When a group entity undertakes its activities under joint operations, the Group as a joint operator • potential voting rights held by the Company, other vote holders or other parties; recognises in relation to its interest in a joint operation: • rights arising from other contractual arrangements; and • its assets, including its share of any assets held jointly; • any additional facts and circumstances that indicate that the Company has, or does not have, the • its liabilities, including its share of any liabilities incurred jointly; current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings. • its share of the revenue from the sale of the output by the joint operation; and Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and • its expenses, including its share of any expenses incurred jointly and directly. ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint or loss and other comprehensive income from the date the Company gains control until the date when operation in accordance with the AASBs applicable to the particular assets, liabilities, revenues and the Company ceases to control the subsidiary. expenses. Profit or loss and each component of other comprehensive income are attributed to the owners of the When a group entity transacts with a joint operation in which a group entity is a joint operator Company. (such as a sale or contribution of assets), the Group is considered to be conducting the transaction with the other parties to the joint operation, and gains and losses resulting from the transactions When necessary, adjustments are made to the financial statements of subsidiaries to bring their are recognised in the Group’s consolidated financial statements only to the extent of other parties’ accounting policies into line with the Group’s accounting policies. interests in the joint operation. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions When a group entity transacts with a joint operation in which a group entity is a joint operator (such between members of the Group are eliminated in full on consolidation. Investments in subsidiaries are as a purchase of assets), the Group does not recognise its share of the gains and losses until it resells recognised at cost. those assets to a third party.

(r) Parent Entity Financial Information (q) Subsidiaries The financial information for the parent entity, Racing Victoria Limited, disclosed in note 19 has been The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Racing prepared on the same basis as the consolidated financial statements. Victoria (‘’consolidated entity’’ or ‘’parent entity’’) as at 30 June 2020 and the results of all subsidiaries

104 105 NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2020

(s) Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of the acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

(t) New Accounting Standards and Interpretations

AASB 16 Leases was adapted during the period as per note 1(b).

Other than that noted above, there were no new accounting standards adopted during the year.

26. ADDITIONAL CONSOLIDATED ENTITY INFORMATION

Racing Victoria Limited is a consolidated entity incorporated and operating in Australia.

Principal Registered Office and Principal Place of Business

Racing Victoria Limited 400 Epsom Road Flemington Victoria 3031 Telephone: (03) 9258 4258 www.racingvictoria.com.au

Racing Victoria Limited 400 Epsom Road, Flemington, Victoria 3031 106 RACINGVICTORIA.COM.AU