Key Points:
A merger between the AJC and STC will lead a package of potential reforms including $174 million in funding however, the merger of the AJC and STC is not certain.
The future of Sydney's new 'super club' is far from certain. In a move conditional upon the merger of the Australian Jockey Club (AJC) and Sydney Turf Club (STC), the NSW Government recently announced a package of potential reforms including $174 million in funding for the redevelopment of the Rosehill and Randwick race tracks. While both the AJC and STC Boards had given their unanimous endorsement of the proposed government package, it was up to AJC and STC members to vote on the merger of the two clubs.
Whilst the members at the AJC general meeting overwhelmingly approved the merger on 7 October 2010, the members of the STC, who attended the 11 October 2010 general meeting, voted against the merger by a reported 40/60 or 2/3rd majority.
It is understood that the NSW Racing Minister, Kevin Greene, has asked the boards of the AJC and STC for their recommendations by the end of this week and, if supportive, the Government would proceed. However, some might consider it a brave STC board to now recommend in favour of the merger in light of the vote.
With the $174 million in funding:
- the AJC would have received $150 million, and had planned to redevelop Randwick racecourse to include multi-purpose venues, increased seating and improved facilities, new grandstands and a multi-storey hotel on Alison Road; and
- the STC would have received $24 million and had planned to refurbish the Fleming Stand at the racecourse, build a new main entry and railway bridge, build a pedestrian bridge over James Ruse Drive, purchase a new demountable concert stage and infield screen and build a vehicular access bridge and tunnel link to the infield car park.
Details of the merger were still being determined prior to the vote and before a new Act was introduced into the NSW Parliament to endorse the package. The proposed Act would have established the new racing club and repealed the previous Acts which established the AJC and the STC (the Australian Jockey Club Act 2008 and the Sydney Turf Club Act 1943). The proposed start date for the new racing club was reported to have been 1 January 2011.
As part of the package of reforms, hundreds of new computerised gambling terminals (called Trackside) were to be introduced into pubs, clubs and TABs around NSW. It is reported that in a deal between Tabcorp, Racing NSW and the NSW Government, Tabcorp was expected to put up $150 million for the redevelopment costs of Rosehill and Randwick race tracks. It is not clear at this stage how Tabcorp would have recovered this "grant".
With uncertainty surrounding the future of Sydney's new 'super club', Clayton Utz will continue to monitor merger developments closely.
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