1 00:00:03,990 --> 00:00:06,810 Sean Aylmer: Welcome to the Fear and Greed Daily Business Interview. It's 2 00:00:06,810 --> 00:00:09,299 Sean Aylmer: the first Tuesday of November, for many in the business 3 00:00:09,300 --> 00:00:11,610 Sean Aylmer: world, it's about interest rates. For others it's about the 4 00:00:11,610 --> 00:00:13,770 Sean Aylmer: Melbourne Cup, which of course is being run today for 5 00:00:13,770 --> 00:00:18,000 Sean Aylmer: the 163rd time from Archer's win back in 1861 to 6 00:00:18,000 --> 00:00:20,279 Sean Aylmer: Gold Trip's success last year. I thought it was a 7 00:00:20,280 --> 00:00:22,918 Sean Aylmer: good opportunity to check in on how the thoroughbred racing 8 00:00:22,920 --> 00:00:28,349 Sean Aylmer: industry is going. So I'd like to welcome back the 9 00:00:28,349 --> 00:00:31,620 Sean Aylmer: boss of the Thoroughbred Breeders Association, the chief executive Tom 10 00:00:31,620 --> 00:00:33,390 Sean Aylmer: Riley. Tom, welcome back to Fear and Greed. 11 00:00:34,800 --> 00:00:36,570 Tom Riley: Great to be on Sean. Thank you very much. 12 00:00:37,080 --> 00:00:38,940 Sean Aylmer: Tom, it must be an exciting time of year for 13 00:00:38,940 --> 00:00:42,300 Sean Aylmer: your industry, the spring racing carnival, this four to six 14 00:00:42,300 --> 00:00:44,280 Sean Aylmer: week period, and particularly in Sydney and Melbourne. 15 00:00:44,790 --> 00:00:47,668 Tom Riley: Yeah, this is certainly the time when racing is really 16 00:00:47,909 --> 00:00:50,880 Tom Riley: in the shop window, on main stage. So we've had 17 00:00:50,880 --> 00:00:52,949 Tom Riley: the Everest and of course today we've got the Melbourne 18 00:00:52,949 --> 00:00:55,200 Tom Riley: Cup. So yes, I'm sure there'll be millions of people 19 00:00:55,290 --> 00:00:58,260 Tom Riley: around Australia watching the action at Flemington today. 20 00:00:58,800 --> 00:01:00,630 Sean Aylmer: So can you give me some idea of how big 21 00:01:00,690 --> 00:01:03,930 Sean Aylmer: the racing industry is in Australia? I mean, I've done 22 00:01:04,590 --> 00:01:06,780 Sean Aylmer: some work on it previously. It's huge. 23 00:01:07,469 --> 00:01:09,870 Tom Riley: You're right. It is huge. If we're looking at it 24 00:01:09,870 --> 00:01:14,190 Tom Riley: from a jobs perspective, there are over 80,000 full- time 25 00:01:14,190 --> 00:01:18,870 Tom Riley: jobs within the thoroughbred industry. If you're looking at prize 26 00:01:18,870 --> 00:01:24,149 Tom Riley: money, there's getting towards $ 900 million in prize money across the almost 19, 27 00:01:24,150 --> 00:01:30,209 Tom Riley: 000 races in Australia each year. But for people who 28 00:01:30,209 --> 00:01:32,009 Tom Riley: aren't really that familiar or who are maybe just watching 29 00:01:32,250 --> 00:01:36,480 Tom Riley: the Melbourne Cup today, Australia's got an enormous industry for 30 00:01:36,480 --> 00:01:39,360 Tom Riley: the size of population. So we're the second- biggest thoroughbred industry 31 00:01:39,360 --> 00:01:42,660 Tom Riley: in the world after America, and obviously America's got a 32 00:01:42,660 --> 00:01:45,989 Tom Riley: much bigger population to sustain that. So people around the 33 00:01:45,990 --> 00:01:49,320 Tom Riley: world look at Australia as a leader in the thoroughbred 34 00:01:49,320 --> 00:01:52,230 Tom Riley: industry. So the action on the track is really highly 35 00:01:52,230 --> 00:01:56,910 Tom Riley: regarded. Australia hosts more of the best races than any 36 00:01:56,910 --> 00:01:59,880 Tom Riley: other country in the world. So both in terms of 37 00:01:59,880 --> 00:02:02,790 Tom Riley: the quality of the action on the track, as well 38 00:02:02,790 --> 00:02:06,510 Tom Riley: as the economics of it, Australia really is a powerhouse 39 00:02:06,600 --> 00:02:07,260 Tom Riley: around the world. 40 00:02:08,070 --> 00:02:10,080 Sean Aylmer: Where are we up to? Is it growing still? I 41 00:02:10,080 --> 00:02:12,660 Sean Aylmer: mean, there was a golden period a couple of decades 42 00:02:12,660 --> 00:02:15,059 Sean Aylmer: ago, but where's it up to now, particularly given the 43 00:02:15,059 --> 00:02:16,530 Sean Aylmer: competition from other sports? 44 00:02:17,610 --> 00:02:20,820 Tom Riley: So wagering has, which is obviously one way to look 45 00:02:20,820 --> 00:02:25,350 Tom Riley: at it, wagering is plateauing out post- COVID, but still, 46 00:02:25,470 --> 00:02:29,520 Tom Riley: Australians love to bet and enjoy betting on horses. In 47 00:02:29,520 --> 00:02:33,059 Tom Riley: terms of number of horses, those numbers are dropping. So 48 00:02:33,059 --> 00:02:34,860 Tom Riley: the foal crop, what we talk about the number of 49 00:02:34,860 --> 00:02:39,210 Tom Riley: thoroughbreds born each year, is around 12,500. It's been steady 50 00:02:39,210 --> 00:02:41,759 Tom Riley: there for the last couple of years. But if you 51 00:02:41,760 --> 00:02:44,850 Tom Riley: went back 30 years ago, that would've been closer to 20, 52 00:02:44,850 --> 00:02:49,020 Tom Riley: 000 horses born each year. So it's definitely contracting. I 53 00:02:49,020 --> 00:02:52,350 Tom Riley: would argue that the quality is improving. But one real 54 00:02:52,380 --> 00:02:56,608 Tom Riley: big area where the industry is growing, is around ownership 55 00:02:56,610 --> 00:02:59,699 Tom Riley: and people participating by having a share in a horse. 56 00:02:59,699 --> 00:03:04,800 Tom Riley: And so now in Australia, there are around 105, 000 registered 57 00:03:04,889 --> 00:03:09,059 Tom Riley: owners. To give you some kind of context for that, 58 00:03:09,510 --> 00:03:13,559 Tom Riley: the UK has 14, 000. America, which has the biggest 59 00:03:13,559 --> 00:03:17,100 Tom Riley: number of race horses, they've only got about 30,000 registered 60 00:03:17,100 --> 00:03:20,190 Tom Riley: owners. So here we've got a lot of people, they 61 00:03:20,190 --> 00:03:22,020 Tom Riley: might not own the whole horse, they might own 5% 62 00:03:22,020 --> 00:03:24,810 Tom Riley: of the horse or 10% of a horse. A lot of 63 00:03:24,810 --> 00:03:26,100 Tom Riley: people who are really engaged with it. 64 00:03:26,820 --> 00:03:29,160 Sean Aylmer: The Melbourne Cup stops the nation. We know that. In 65 00:03:29,160 --> 00:03:32,250 Sean Aylmer: Sydney, the Everest has fast become a major race, even 66 00:03:32,250 --> 00:03:35,279 Sean Aylmer: though it isn't a Group One race. How important are 67 00:03:35,279 --> 00:03:36,690 Sean Aylmer: these marquee events? 68 00:03:37,350 --> 00:03:40,410 Tom Riley: So in racing, essentially there are races going on all 69 00:03:40,410 --> 00:03:44,760 Tom Riley: across Australia, 364 days of the year. So it's an 70 00:03:44,760 --> 00:03:49,650 Tom Riley: industry that's going nonstop, but it's not like the AFL 71 00:03:49,650 --> 00:03:51,570 Tom Riley: or the NRL, that we have a grand final with 72 00:03:51,570 --> 00:03:55,380 Tom Riley: all that attention focused on one event. So having these 73 00:03:55,380 --> 00:04:00,300 Tom Riley: marquee events is really important in terms of speaking to 74 00:04:00,300 --> 00:04:03,450 Tom Riley: those people maybe who don't follow racing week in, week 75 00:04:03,450 --> 00:04:06,270 Tom Riley: out, to say, " Hey, look, here's our industry. Here's a 76 00:04:06,270 --> 00:04:10,859 Tom Riley: great day, a great event. With really, what drives it 77 00:04:10,859 --> 00:04:13,800 Tom Riley: all, is these amazing horses. And I'm sure even if 78 00:04:13,800 --> 00:04:16,260 Tom Riley: you've got no interest in having a punt, having a 79 00:04:16,260 --> 00:04:19,289 Tom Riley: bet, if you go to the races and spend a 80 00:04:19,290 --> 00:04:21,210 Tom Riley: bit of time in the mounting yard beforehand and have 81 00:04:21,210 --> 00:04:24,389 Tom Riley: a look at the horses, these are stunning animals and 82 00:04:24,389 --> 00:04:25,469 Tom Riley: that's what really pushes it all." 83 00:04:25,950 --> 00:04:27,449 Sean Aylmer: Stay with me, Tom. We'll be back in a minute. 84 00:04:27,449 --> 00:04:37,080 Sean Aylmer: My guest today is Tom Riley, CEO of the Thoroughbred Breeders 85 00:04:37,080 --> 00:04:42,809 Sean Aylmer: Association. Okay, now racing isn't without its challenges, not least 86 00:04:42,809 --> 00:04:45,510 Sean Aylmer: being the reliance on gaming, you talked about $ 900 million 87 00:04:45,719 --> 00:04:48,990 Sean Aylmer: in prize money. I presume the bulk of that comes 88 00:04:48,990 --> 00:04:51,900 Sean Aylmer: from revenue from gaming. Am I right in that? Similarly 89 00:04:51,900 --> 00:04:53,370 Sean Aylmer: with tax take? Is that right? 90 00:04:53,610 --> 00:04:56,970 Tom Riley: Yeah, so over 90% of the funding of the racing, 91 00:04:57,029 --> 00:05:00,990 Tom Riley: of prize money, is derived from wagering or from taxes 92 00:05:00,990 --> 00:05:01,560 Tom Riley: from wagering. 93 00:05:02,070 --> 00:05:04,500 Sean Aylmer: Okay. So there's a lot of pressure at the moment 94 00:05:04,500 --> 00:05:08,430 Sean Aylmer: to reduce the amount of advertising being allowed in gaming. 95 00:05:08,940 --> 00:05:10,380 Sean Aylmer: Where do you stand on that one? 96 00:05:11,310 --> 00:05:13,680 Tom Riley: Yeah, so there was a report, as I'm sure lots 97 00:05:13,680 --> 00:05:15,178 Tom Riley: of your listeners will be aware, there was a report 98 00:05:15,240 --> 00:05:19,049 Tom Riley: earlier in the year, which had 31 recommendations looking to 99 00:05:19,830 --> 00:05:24,029 Tom Riley: reform online gambling. Thoroughbred Breeders Australia, very supportive of the 100 00:05:24,029 --> 00:05:28,830 Tom Riley: vast majority of those recommendations. I suppose there are two 101 00:05:28,830 --> 00:05:32,099 Tom Riley: real areas of concern from a thoroughbred industry point of 102 00:05:32,099 --> 00:05:36,330 Tom Riley: view. One, the report basically said, look, racing is an 103 00:05:36,330 --> 00:05:41,368 Tom Riley: exception. It's different to AFL, it's different to NRL in terms of its relationship 104 00:05:41,369 --> 00:05:45,990 Tom Riley: with wagering. Those sports have really embraced wagering recently, as 105 00:05:45,990 --> 00:05:49,890 Tom Riley: a source of revenue and sponsorship, whereas racing, you can 106 00:05:49,890 --> 00:05:52,589 Tom Riley: go back to the histories of horse racing and wagerings been 107 00:05:53,130 --> 00:05:57,570 Tom Riley: a component of it. So the report acknowledged this and 108 00:05:57,570 --> 00:06:00,479 Tom Riley: said there should be an exemption for racing. So from 109 00:06:00,480 --> 00:06:04,529 Tom Riley: a racing perspective, it's important that that exemption, that carve 110 00:06:04,529 --> 00:06:08,159 Tom Riley: out, is significant enough so that we don't see issues 111 00:06:08,190 --> 00:06:11,070 Tom Riley: there being, let's say, a form guide in the newspaper 112 00:06:11,070 --> 00:06:13,650 Tom Riley: in Sydney or Melbourne. So that's one area that we're 113 00:06:13,650 --> 00:06:16,649 Tom Riley: speaking to government about. And the other one, which has a 114 00:06:16,650 --> 00:06:22,200 Tom Riley: real direct financial potential impact is around what the report 115 00:06:22,200 --> 00:06:26,309 Tom Riley: called inducements, or what bookmakers might call generosity. So if 116 00:06:26,309 --> 00:06:29,759 Tom Riley: you've got a Sportsbet or a Ladbrokes account and you're having 117 00:06:29,759 --> 00:06:32,640 Tom Riley: a bet in the Melbourne Cup today, there's a chance 118 00:06:32,969 --> 00:06:35,639 Tom Riley: that whichever bookmaker you are with might have an offer 119 00:06:35,639 --> 00:06:39,060 Tom Riley: where if your horse runs second, you might get a 120 00:06:39,060 --> 00:06:41,940 Tom Riley: bonus bet back. So the report called for all of 121 00:06:41,940 --> 00:06:48,330 Tom Riley: those generosities to be canceled. Now, one immediate issue for 122 00:06:48,330 --> 00:06:51,089 Tom Riley: the racing industry is that all of those, let's say 123 00:06:51,509 --> 00:06:54,900 Tom Riley: if you looked at free bets or bonus bets, all 124 00:06:54,900 --> 00:06:57,960 Tom Riley: of those bets get taxed by the racing industry. So 125 00:06:58,020 --> 00:07:00,120 Tom Riley: a levy is paid to the racing industry on those, 126 00:07:00,270 --> 00:07:02,970 Tom Riley: and they also get taxed by state governments. And with 127 00:07:02,970 --> 00:07:07,019 Tom Riley: all state governments across the country, a proportion of that 128 00:07:07,020 --> 00:07:10,620 Tom Riley: tax take from racing, goes back to the industry. So 129 00:07:10,920 --> 00:07:13,500 Tom Riley: if those were removed, it would be a financial hit 130 00:07:13,500 --> 00:07:14,040 Tom Riley: to racing. 131 00:07:14,820 --> 00:07:18,180 Sean Aylmer: Okay. The other issue, which we often hear a fair 132 00:07:18,180 --> 00:07:20,550 Sean Aylmer: bit about on a day like today, is the welfare 133 00:07:20,550 --> 00:07:23,849 Sean Aylmer: of horses. And we've had some unfortunate incidents in recent 134 00:07:23,849 --> 00:07:27,299 Sean Aylmer: years in the Melbourne Cup. It's a perennial. Is the 135 00:07:27,299 --> 00:07:30,059 Sean Aylmer: industry getting better at looking after horses once they're no 136 00:07:30,059 --> 00:07:30,720 Sean Aylmer: longer racing? 137 00:07:31,350 --> 00:07:34,560 Tom Riley: Yeah, definitely. So the welfare of horses is certainly an 138 00:07:34,560 --> 00:07:38,760 Tom Riley: area that I think everyone in racing is really committed 139 00:07:38,760 --> 00:07:42,899 Tom Riley: to. And across the country, each racing authority is putting 140 00:07:42,900 --> 00:07:45,960 Tom Riley: aside a percentage of all the money that comes into 141 00:07:45,960 --> 00:07:48,929 Tom Riley: the industry for welfare. And this amounts to tens and 142 00:07:48,959 --> 00:07:53,490 Tom Riley: tens of millions of dollars across the country each year. And 143 00:07:53,700 --> 00:07:56,340 Tom Riley: there's some great programs. Just the other day, Racing Queensland 144 00:07:56,340 --> 00:07:59,790 Tom Riley: announced a safety net. So any thoroughbred that essentially gets 145 00:07:59,790 --> 00:08:03,120 Tom Riley: into trouble in retirement, they will come on and take 146 00:08:03,120 --> 00:08:06,029 Tom Riley: over responsibility for that horse, and there's been some great 147 00:08:06,029 --> 00:08:08,970 Tom Riley: work done. And I think that ideas like that, the 148 00:08:08,970 --> 00:08:11,490 Tom Riley: safety net, I think will become national ideas very soon, 149 00:08:11,790 --> 00:08:14,429 Tom Riley: and that will really help the industry and give confidence 150 00:08:14,429 --> 00:08:17,250 Tom Riley: to everyone that we're not just committed to looking after 151 00:08:17,250 --> 00:08:20,430 Tom Riley: our horses while they're in the industry, while they're racing, 152 00:08:20,880 --> 00:08:21,810 Tom Riley: but afterwards too. 153 00:08:22,500 --> 00:08:24,750 Sean Aylmer: Okay. So where are the big opportunities for racing in the 154 00:08:24,750 --> 00:08:26,370 Sean Aylmer: next five, 10 years then? 155 00:08:26,790 --> 00:08:30,180 Tom Riley: Yeah, so two key things really. I think international investment 156 00:08:30,660 --> 00:08:35,280 Tom Riley: is huge and is getting bigger. So the biggest investor, 157 00:08:35,280 --> 00:08:38,368 Tom Riley: the biggest recent investor in the thoroughbred industry, is a 158 00:08:38,370 --> 00:08:42,899 Tom Riley: Chinese billionaire called Yuesheng Zhang. And Mr. Zhang has more 159 00:08:42,900 --> 00:08:46,230 Tom Riley: than 150 horses running around Australia, which he owns himself. 160 00:08:47,190 --> 00:08:52,050 Tom Riley: He's got 600 broodmares, mostly based in Victoria on his farms 161 00:08:52,050 --> 00:08:55,830 Tom Riley: there. We're seeing a wave of international investment. I mentioned 162 00:08:55,830 --> 00:08:58,799 Tom Riley: earlier on that Australia's seen as a leader. There's good 163 00:08:58,799 --> 00:09:01,500 Tom Riley: prize money here, there's a good funding model here, and 164 00:09:01,500 --> 00:09:04,650 Tom Riley: we're seeing increasing numbers of owners from overseas come and want to 165 00:09:05,250 --> 00:09:08,520 Tom Riley: race horses here and be involved here. So international investment 166 00:09:08,520 --> 00:09:11,400 Tom Riley: is one area, and the second is the growth in 167 00:09:11,400 --> 00:09:15,540 Tom Riley: ownership. So the availability of people to come and take 168 00:09:15,540 --> 00:09:17,910 Tom Riley: a share in a horse and really be part of 169 00:09:17,910 --> 00:09:22,230 Tom Riley: something, which, if you're a footie fan, you can go 170 00:09:22,230 --> 00:09:24,900 Tom Riley: and watch your team. But if you are involved in 171 00:09:25,350 --> 00:09:29,130 Tom Riley: ownership, you can actually go and own a part of 172 00:09:29,130 --> 00:09:32,280 Tom Riley: a horse and actually be involved in the conversations, know 173 00:09:32,280 --> 00:09:34,889 Tom Riley: where it's going to race, have those conversations with trainers, 174 00:09:34,889 --> 00:09:36,809 Tom Riley: be there when the jockey's getting legged up and getting 175 00:09:36,809 --> 00:09:40,200 Tom Riley: the instructions. And more and more people are wanting to 176 00:09:40,200 --> 00:09:42,390 Tom Riley: get involved that way. And I think that's something that's 177 00:09:42,390 --> 00:09:45,570 Tom Riley: really special in Australia. If you looked, you mentioned the 178 00:09:45,570 --> 00:09:48,150 Tom Riley: Everest earlier on, the horse that won the Everest was 179 00:09:48,150 --> 00:09:53,399 Tom Riley: bought for $70, 000 and he has now won an excess 180 00:09:53,400 --> 00:09:57,030 Tom Riley: of 10 million. So for those people who bought their 5% in 181 00:09:57,030 --> 00:10:00,480 Tom Riley: that horse they're well in front and having the time 182 00:10:00,480 --> 00:10:01,410 Tom Riley: of their lives, I'm sure. 183 00:10:01,950 --> 00:10:03,809 Sean Aylmer: So who's going to win the Melbourne Cup today Tom? 184 00:10:04,320 --> 00:10:09,059 Tom Riley: Okay, simple one. So the favorite Vauban, everyone who I 185 00:10:09,059 --> 00:10:12,090 Tom Riley: speak to who is a serious student of form tells 186 00:10:12,090 --> 00:10:15,059 Tom Riley: me he will just win, but he's very short odds. 187 00:10:15,059 --> 00:10:17,670 Tom Riley: So if I was giving a tip to the listeners, 188 00:10:18,030 --> 00:10:19,890 Tom Riley: I would suggest a little each way bet on a 189 00:10:19,890 --> 00:10:23,910 Tom Riley: horse called Ashrun. And he's trained by Ciaron Maher who's 190 00:10:23,910 --> 00:10:26,250 Tom Riley: an expert at this, he trained the winner last year. 191 00:10:26,790 --> 00:10:29,338 Tom Riley: Yeah. So he'll be about $ 40 or thereabouts. 192 00:10:29,760 --> 00:10:31,920 Sean Aylmer: Fantastic. Tom, thank you for talking to Fear and Greed. 193 00:10:32,280 --> 00:10:33,059 Tom Riley: Thank you for having me on. 194 00:10:33,690 --> 00:10:36,960 Sean Aylmer: That was Tom Riley, CEO of the Thoroughbred Breeders Association. 195 00:10:36,960 --> 00:10:38,848 Sean Aylmer: Join us every morning for the full episode of Fear 196 00:10:38,849 --> 00:10:42,900 Sean Aylmer: and Greed, Australia's best business podcast. I'm Sean Aylmer. Enjoy 197 00:10:42,900 --> 00:10:43,260 Sean Aylmer: your day.