COMPLAINT ...HORSERACING

* from Sunday Times


Probe into horseracing


BRENDAN PEACOCK | 02 October, 2011 00:57

A row over the purchase of a Port Elizabeth horseracing track has led to a complaint being lodged with the Competition Commission and a broader investigation into competition issues in the horseracing industry in general.

Some industry insiders say an inquiry into horseracing is long overdue and allege that the two dominant companies have engaged in collusion, market allocation and price-fixing.

A complaint was made to the Competition Commission by Eastern Cape thoroughbred breeder and businesswoman Phindi Kema after she failed to reach an agreement with Phumelela Gaming & Leisure to buy Arlington racecourse in Port Elizabeth.

Kema's wide-ranging complaint alleges market allocation between Gold Circle Horse Racing and Gambling and Phumelela, collusion between the two companies, price-fixing and bullying.

In a separate letter to the minister of sport, Kema outlined her complaints about the country's only two racing operators and included an allegation that the industry had failed to transform.

Kema, founder of Africa Race International, cited a 2007 University of Johannesburg study into the then 210-year-old horseracing industry which labelled the Phumelela-Gold Circle alliance an "oligopoly".

According to the study, Phumelela and Gold Circle combined employed about 100000 people, with a betting turnover of about R5-billion a year. Phumelela was established in 1999, and listed on the JSE in 2002, while Gold Circle is privately owned and has been operating since 2002.

According to media reports, after some success as a stud farmer, Kema's intention was to partner with UK-listed International Racehorse Management and break open the local industry by establishing an international thoroughbred racing event worth R1.3-billion, with a winning prize of R25-million. At the time, South Africa's richest winning prize stood at R3-million.

Keith Weeks, manager of enforcements and exemptions at the Competition Commission, confirmed that the commission had received the complaint and that it raised concerns about arrangements between Phumelela and Gold Circle.

Racehorse owner and trainer Ian Jayes said that after his 50-odd years of experience in the industry he believed an inquiry was long overdue.

"The industry has been taken over by Phumelela and there are just a few shareholders who call the shots. They have a monopoly on the sport. They've closed down courses, sold off assets to feed shareholders' wallets and acted as bully boys," said Jayes.

Phumelela CEO Rian du Plessis said he was aware of the complaint lodged by Kema.

"We received a letter from the commission on July 1 and responded within two weeks. We haven't heard from them since."

Du Plessis said the disagreement arose after Phumelela decided to consolidate its Port Elizabeth racing schedule at Fairview racecourse and put the city's other course, Arlington, up for sale.

Kema was among those who expressed an interest in buying.

"Kema offered to buy the Arlington track, but wanted to buy the races as well, and it was never our intention to sell them - we'd never offered the races as part of the deal," said Du Plessis.

"We just wanted to cancel the one licence. There is a worldwide trend towards fewer but better-quality venues. Others interested in buying the Arlington track were mostly property developers."

According to Kema, with the potential backing of a funder, she put an offer on the table but negotiations stalled.

"We realised that, since we are going to be a player in this industry, there's a need to address the wider problems. We cannot ignore the fundamental commercial issues," she said.

Arlington must stay ()

ps a wonder where he means? maybe he read Charlie p`s Rambling of a madman article?

There is a worldwide trend towards fewer but better-quality venues

I was also wondering where the ''worldwide trend'' was for closing racing venues..:S

Secondly ''better quality venues'', you got to be kidding MR Du Plessis, can you honestly say The Vaal is such compared to what NEWMARKET or GOSFORTH PARK were.... Also the average punter who wants to go racing CAN'T AFFORD THE TRANSPORTATION COSTS TO THE VAAL FROM JHB!!!

it makes sense to close racecourses if you want the sport to grow!! hope the gov sees the truth but i fear that nothing will happen -

hibernia Wrote:

---

> Arlington must stay ()
>

Unfortunately there was only 1 submission made to the ECGBB objecting to the application
by Phumelela to amend it's licence conditions in the Eastern Cape, which compels it to
maintain 2 race courses. As far as I am aware Phumelela have not respoded to the objection
within the prescribed 30 days.

There will still have to be a hearing at the ECGBB offices in East London before the licence
conditions can be changed.

hibernia Wrote:

---

> Arlington must stay ()
>
> ps a wonder where he means? maybe he read Charlie
> p`s Rambling of a madman article?
>
>
> There is a worldwide trend towards fewer but
> better-quality venues
>

P one line and they cant even tell the truth then.

I hope they one day investigate Newmarket sale.

@sly & others:

Can I take the liberty of posting aspects from my document that I had submitted to the Parliamentary Monitoring Group which covers your concern in a new thread?

It is not cast in stone and any suggestions / input will be most welcome as there is a need for all all-inclusive approach and solution.

I agree Umlilo...there is a lot in this industry that needs looking at..owners had to go through huge audits a while back..whats wrong with all Govt authorities looking at the overall management of what is a large tax revenue industry..

Thanks again Hanif for the contributions to the site much appreciated.

@scotia:

'Thanks again Hanif for the contributions to the site much appreciated.'

Touche!

I am equally appreciative that there is such maturity amongst clansmen as not to confuse issues with individuals (except to let off steam at times when their selections don't come home!).

(tu)