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 on Friday filed necessary court papers to forestall Gauteng from converting rules on how a tax of horse-race playing winnings is handled.
A 3% reduction of all winnings in Gauteng were paid to Phumelela as part of a subsidy scheme set up after horse racing turned into privatized inside the mid-1990s – until Monday. As of one April, that cut of the winnings moves as a substitute to the Gauteng Gambling Board, from in 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, along with, especially as a horseracing administrator,” it said in an application to halt, and sooner or later set aside, the alternate in guidelines.
The Gauteng tax makes up a few ninety% 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 be able to make proprietors and trainers much less probable 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, in location for many years, on 15 January. It posted very last rules on 28 March, and they got here into impact 3 days later.
According to 2016 figures referred to with the aid of the agency, horse racing in South Africa employs some thirteen,000 people permanently, and more than 23,000 human beings in transient jobs.