The Gauteng province risks collapsing horse racing in South Africa with tax adjustments, says having a bet operator
The Gauteng provincial government is risking the collapse of the entire a hundred-yr-vintage horse racing industry in South Africa, the JSE-listed Phumelela says in court papers. And Gauteng is doing that for a measly R77 million a year, or so, the business enterprise says, which it will come to be losing in the long run too. Phumelela filed the necessary court papers to forestall Gauteng from converting rules on how a tax on horse-race playing winnings is handled. A 3% reduction of all winnings in Gauteng was paid to Phumelela as part of a subsidy scheme set up after horse racing turned privatized in the mid-1990s, until Monday. Then, as of one April, that cut of the winnings moves as a substitute to the Gauteng Gambling Board, from which Phumelela believes it finally ends up within the province’s coffers.
Without that money, which amounted to R77.Three million in 2018, horse racing in South Africa can be doomed, the employer says. “Phumelela is not going to sustain its modern-day operations, especially as a horseracing administrator,” it said in an application to halt, and sooner or later set aside, the alternative in guidelines. The Gauteng tax makes up ninety percent of the tax subsidy Phumelela receives for the loss-making business of establishing race meets. Without it, the organization says, racing “can be rendered economically unsustainable.”
“Without Phumelela, the sustainability of the complete South African horseracing enterprise is at risk,” CEO John Stuart says in a sworn statement. The “grievous results” will eventually extend to Gauteng’s coffers, too, the agency says, as revenues decline and the pony-racing betting tax dwindles. Phumelela believes that the stakes for competing in a horse race will need to be decreased without the subsidy to make proprietors and trainers much less likely to participate. This will reduce the number of horses in training while also lowering the interest from each neighborhood and international punters. Gauteng first publicly proposed changing the remedy of the tax subsidy, instead of many years, on 15 January. It posted the very last rules on 28 March, and they came into effect 3 days later. According to 2016 figures referred to with the agency’s aid, horse racing in South Africa employs some thirteen 000 people permanently and more than 23,000 thousand people in transient jobs.
