NOT LOOKING GOOD

Now Flash that is a very good question, I posted this analysis a few months ago (see below), this year stakes up 7% dividends up 12%
, I would love to have this debate publicly with their executive as to why when the industry is under "siege" they continue to pay top dividends instead of re-investing in the turnaround of the industry.


Just worked out that since listing, 10 years ago, investors have achieved a staggering IRR of circa 65% Or 28 times their investment, I would say that the cost of capital and transparency has certainly not been worth it. Let the debate continue! Stakes on the other hand have under-performed inflation.

"We acknowledge that the income tax that we pay to the government and the dividends that are earned by our shareholders could otherwise have been ploughed back into the sport (i.e. if we had remained a club). However, we believe that the additional capital that was raised upon our listing, together with accountability and transparency that comes with being a company listed on the JSE, outweighs this negative. In any event, we had no choice as our business model, including our 26% BBBEE shareholding, was a requirement of our regulators. "

Disappointingly the Sub-committee did not address the R42
million annual cost of the National Horseracing Authority
(NHA) funded by Phumelela and Gold Circle. According to the
National Gambling Boards statistics for 2012, bookmakers
collectively generate more turnover on horseracing than
totalisator operators do. It stands to reason that
bookmakers benefit equally if not more than totalisator
operators from the regulatory functions performed by the NHA
and should accordingly fund a fair and equitable portion of
the annual running costs of the NHA. The Sub-committees
proposal for a Commission of Enquiry into horseracing and
betting is therefore welcomed.

Don - On the face of it your argument has merit.

But if we applied that thinking FAIRLY across ALL sectors then we would need to add ( amongst others ) the following 'beneficiaries' to your proposal :

eg -

What contribution is the operator making to football to 'compensate' the sport for the betting that piggybacks for free on it and from which part of the takeout inevitably finds it's way back into local racing?

Same can be said regarding all the other sports that the operator offers bets on and is planning to expand significantly in the future.

And if, as is planned, tote bets are offered on a Pick 6 of daily indices will we be making a contribution to the operating costs of the JSE? Lol.

It is sometimes overlooked that, inasmuch as bookmakers are perceived to be 'parasitic', so also do they contribute to the options available to punters. I no longer bet on horses but would have stopped a lot sooner had I been forced to bet only on the tote. I'm just not comfortable having up to 25% of the pool into which I am betting vacuumed before the event is even run. To say nothing of some very strange 'dividend gyrations' which have never really been satisfactorily explained. That the management is too inept to drum up stakes funding from areas other than betting does not mean that I, as the customer, am going to remain happy with my endless enforced funding of the sport through tote betting and its confiscatory takeout.

I'm even less comfortable wagering R1 only to have R1 returned to me when my bet is successful after having navigated all the risks associated with betting ( ie Place bets on the tote ). Bookmakers flourish for two reasons : They offer credit and the punter can structure bets in the knowledge that the payout on a successful bet is known in advance with the bookmaker carrying the potential risk if unable to 'take back'. The tote risks nothing and operates a lucky dip/lottery style payment system - sometimes you get a pleasant surprise and other times its a disappointment.

Do it for long enough and you will definitely end up broke simply because the takeout will finish you off.

At the end of the day it works as follows - owners and punters spend the money so that the industry insiders have jobs. Nothing wrong with that but I no longer choose to fund it.

sorry Garrick, not my argument, in fact, copied and pasted from their financial statement. All fine and well to get the bookies to carry some of the load on overheads and your point above noted, but NHRA costs R42M per annum? really, and why complain about that now - surely the NHRA cost more or less the same to run last year, and the year before? also, perhaps this large overhead cost which qualifies a mention in their notes at the end of this statement is only a sore point now that the income doesn't warrant the expense?

shouldn't that point to 'raise the income on racing' rather than 'cut the costs of the overheads on racing' ? Are they looking to dump racing as a whole - citing not financially viable??

You have to wonder at the regulators being remunerated DIRECTLY by the operators or the bookmakers.
Both should be levied to fund regulation but controlled and managed by an independant body.

Top group of directors this company has...doing a very good job for their shareholders.


Directors:

M P Malungani (Chairman), W A du Plessis* (Group
Chief Executive), A W Heide* (Finance Director and COO),
R Cooper, M J Jooste, B Kantor, S K C Khampepe, N J Mboweni
(Mrs), V J Moodley*, Dr E Nkosi, M L Ramafalo*, J A Stuart*,
C J H van Niekerk, J B Walters
(*Executive

and nothing for the sustainability of the sport...a bit like the fracking thing eh? its all about the money, scr3w the environment and whats left for the next generation.

Don Wrote:

---

> and nothing for the sustainability of the
> sport...a bit like the fracking thing eh? its all
> about the money, scr3w the environment and whats
> left for the next generation.


so Don you skeam you know more that Jooste, Kantor and Van Niekerk whats good for the sport??

perhaps someone here knows if local turnover on racing is up or down. Could it be that foreign pools are saving the horse?