Fiery Inquiry: Industry leaders demand accountability from Racing NSW

Cover image courtesy of Save Rosehill

The inquiry into the proposal to develop Rosehill Racecourse was heard in the Macquarie Room at Parliament House in Sydney, with industry stalwarts Gai Waterhouse, John O'Shea and Hamish Esplin voicing strong critiques of the proposed sale of Rosehill Racecourse and the broader operations of Racing NSW.

The hearing revealed claims that Racing NSW discouraged trainers and industry participants from speaking out against their decisions, suggesting a culture of 'fear of retribution.' Committee members were pointed in their questioning, expressing concerns about the governance and influence of Racing NSW, particularly under Peter V'Landys' leadership, and questioning whether the organisation had overstepped its regulatory role.

This is the first session of three for the inquiry, with the next two hearings to take place on August 9th and September 22nd.

O'Shea declares sale “strategic suicide”

The morning kicked off with Champion trainer Gai Waterhouse making a powerful opening statement, calling the Racing NSW model “unsustainable.”

“I am infuriated by the mendacity of the ATC board and associates,” she said, while specifically excluding board members Tim Hale and Caroline Searcy from her criticism.

“We would not be here today to discuss selling the cricket ground, the SCG, or Bondi Beach, but yet we're here to discuss the sale of Rosehill. The ATC has an unsustainable financial model.”

Leading fellow Randwick trainer John O’Shea followed, citing that Sydney has only two tracks suitable for elite racing: Randwick and Rosehill. He described it as “strategic suicide” to sell one of New South Wales' most valuable and best facilities.

O’Shea highlighted recent redevelopments in Victoria, such as Pakenham and Caulfield, expressing his frustration at how New South Wales has fallen behind in terms of required infrastructure investment for training.

“To sell Rosehill would be a massive step backwards,” O’Shea stated. “We need to have the best facilities where racegoers want to go, and investors want to be. Rosehill is essential to that strategy, as it is the geographical centre of Sydney.

“Every sporting franchise in this country is trying to gain a foothold in the west of Sydney. As Gai (Waterhouse) already said, when the trotting industry sold its centre in Glebe (Harold Park), it has been an unmitigated disaster in terms of attendance and engaging the community.

“The Chairman of the ATC, Mr Peter McGauran, recently told a meeting of ATC members that you should be spending $12 million a year on facilities but can only afford $4 million. That seems incongruous, given that the club holds five races with a combined value of $45 million.

“I find it almost absurd that we feel the need to sell our most valuable asset: Rosehill. Clearly, if McGauran’s comments are taken at face value, the funding mechanism to the industry’s premier club is not working. The distribution mechanism is not helping to support the industry’s growth.

“As well as having strong prizemoney, it is essential that we have good facilities to race and train on; it is vital to horse welfare. Moreover, owners who fund the industry and put on the show deserve their horses to be trained in the best facilities available. While many projects have been announced, few have been completed.”

Addressing the idea that a state-of-the-art facility could be established at Olympic Park 'Brick Pit' site, O’Shea said, “I believe there is no chance this will happen for a myriad of reasons. The presence of an endangered frog species, the site is significantly smaller than Rosehill, and the brick pit is a disused quarry that requires a 30-metre hole in the ground to be filled. I would suggest the idea around this site is nothing more than a red herring.

“If Rosehill was being sold to rectify inadequate housing policies of various federal and state governments, every golf club and football field in the state would also be under consideration for housing development.

“The Rosehill Racecourse is also an important community facility for the Parramatta area. Every morning, hundreds of people skilled in working with horses attend the track in their capacity as strappers and track workers. The closure of Rosehill will mean they will not find equivalent work in the area.

“The races held on the track also help generate billions of taxes for the State Government, which go into revenue for hospitals, roads, and schools.

“I contend that the board of ATC are many things, but property developers they are not. As a result, the proposal to sell Rosehill should be abandoned, and the industry’s significant resources should be used to improve our infrastructure, such as training tracks, stabling, and facilities for attendees, as well as concentrating on the perception of our sport and the challenge of engaging the next generation of racegoers.”

Can Warwick Farm be the replacement?

Chairman Scott Farlow asked why Warwick Farm is not capable of replacing Rosehill if the venue were sold.

Waterhouse was the first to speak: “Rosehill sustains a very large population. Alongside the configuration of the track, it’s a much bigger track than Warwick Farm. Rosehill is also a more international track in status.”

O’Shea added, “It’s just a very small track; the straight is very short. It would require a massive injection of funds just to get it up to scratch. Warwick Farm is significantly smaller than what we would normally find acceptable for genuine Group 1 racing.”

Later in the hearing, past Chairman and Honorary Treasurer of the Australian Jockey Club, David Capp Hall, was posed the question regarding Warwick Farm and fully agreed with Waterhouse and O’Shea’s sentiments.

“It is not a replacement for Rosehill; it is not a Group 1 track.”

A second alternative was suggested: converting the Sydney International Equestrian Centre, Horsley Park, into a thoroughbred training facility.

Waterhouse snapped, “Why are we even discussing this? The whole point which we’re all missing is that the ATC’s core asset is Rosehill. So, why are we discussing the move to there or Warwick Farm, when their asset is Rosehill? That’s the one thing they own.

“Why would you sell Rosehill when you’ve got all the training tracks and the whole infrastructure there? To replicate it elsewhere would cost millions upon millions of dollars. We’re better off improving the racetracks we’ve got instead of money going everywhere else, like buying properties all over New South Wales. Put the money back into the clubs, make racing work there, and sustain the racing communities in those areas.”

O’Shea commented, “Racing NSW has looked at the Horsley Park proposal on three separate occasions prior to this one, and it deemed it inadequate. So why, all of a sudden, has it now become viable?”

Several committee members threw a series of questions at Waterhouse and O’Shea, including why the proposal to redevelop Rosehill is at the discretion of the ATC members and why Racing NSW cannot just make the decision without consultation or a vote.

“Of course, the members have to vote on it; it’s a core asset,” Waterhouse replied. “You can’t go and even contemplate selling anything when it’s the asset of the members. As I said in my statement, in 1949, Rosehill was bought by the members, not by Racing NSW, not by anyone else. The ATC acquired it through the SDC members who have since become incorporated into the ATC.

“As I kindly remind all, the Clubs Act says you have to get the members' votes.”

Waterhouse advised she would not be against redeveloping areas around Rosehill, although the racetrack and stabling facilities should be kept as a ‘green space’. “Around Rosehill, there are certain areas—the circus area, a car park, and several others—that could be developed, like we’ve seen in Hong Kong, and they are doing so brilliantly at Moonee Valley in Victoria.

“They’ve got the area to make the money and capitalise, but why sell the core asset? I just can’t understand it. More importantly, the members don’t want it. Just put it to the vote; literally ask the members, and I can tell you it will be an overwhelming No! We do not want to sell Rosehill.”

O’Shea offered his view on Waterhouse’s statements: “If you’re any business, you sell your weeds, not your flowers. If we were all in favour of letting them develop areas surrounding Rosehill, it would bring a tremendous return to the industry.

“Historically speaking, when we sell a racetrack, we have nothing to show for it. If Rosehill is sold, this will be another example of wasting money and getting rid of tremendously good assets that are irreplaceable.”

Overwhelmingly against

One committee member asked Waterhouse if she could elaborate on the sentiments of the ATC membership regarding the Rosehill proposal, asking, “Mrs Waterhouse, you said you can’t find any ATC member who supports the sale of Rosehill? The ATC abandoned their information meetings to members because of the hostility.”

“The whole thing could be sorted out now if the ATC acted as a true membership-based organisation and let the members decide with an open vote rather than going through this process now of ridiculous sites like the Brick Pit and further dividing the industry.

“Shouldn’t we have a membership vote, right now?”

Waterhouse replied, “We certainly should be having the membership vote. Because the members own Rosehill. That’s what people keep forgetting. Racing NSW think they own it! They simply don’t. They’ve put themselves in such enormous financial difficulties by loaning money to sustain these huge prizemoney races.

“I reiterate: If they put it to the members now to have a vote, and I’ve been to all their meetings, I can tell you it would be overwhelmingly 'please do not sell this.' We are totally and completely against the sale of Rosehill.”

O’Shea explained that he and other licensed individuals were shocked to hear the announcement and its handling since. “There was no appropriate due diligence done. The process is flawed. Because fundamentally, as we know, it needed the vote of members to agree with the proposal.

“There’s no way the members will agree because it’s a ridiculous proposal. It is not in the best interests of the industry and that’s why Gai and I are here today. If you take away Rosehill, you also lose a whole demographic of people that will no longer be engaged with racing.”

Racing NSW 'abuse of power' a recurring suggestion

During Monday’s hearing into the proposed redevelopment of Rosehill, it was shockingly disclosed that the witnesses, Waterhouse and O’Shea, had personally been asked, or knew other industry participants who had been asked, to avoid further comment on the proposal.

Deputy Chair Emma Hurst initiated the line of questioning with this statement: “Are we in this position because there is somebody on the Racing NSW board that is making all the calls and holds all the power?”

Waterhouse quickly replied, “You’ve hit the nail on the head.”

Hurst continued, addressing Waterhouse, “In the media, Racing NSW Chief Executive Peter V’Landys has said that Racing NSW will have the final say in the sale of Rosehill, and I’m assuming that concerns you. What is your relationship generally with V’Landys and the board of Racing NSW?”

“I’m a licensed trainer, so I have a business relationship with Mr V'Landys,” Waterhouse said. “We’re very cordial with each other.”

Hurst shot back, “Do you know any of the board of Racing New South Wales?”

“No, no-one would know who they are,” Waterhouse said. “Because they never attend the races. You never see them on the racetracks or at the training track. They are a headless group of people, poor things.”

O’Shea added, “What I would say to you, Ms Hurst, is that Racing NSW is not supposed to be involved in this process (selling Rosehill). But I think we all agree that it is possibly behind the scenes collaborating to some extent.

“There is a distinct disconnect between the board of the ATC and its members, and the board and its licensed people. Because there’s a lack of information. As Gai said, it’s been done behind closed doors and then sprung on individuals. We’ve attended information days, but again it’s selective information, not the entirety.”

Hurst then said, “I’ve also heard that some trainers were pressured not to come here to give evidence at the inquiry. Were either of you (Waterhouse and O’Shea) contacted by anybody within Racing NSW or anywhere else and encouraged not to come today and give evidence?”

“The curly one,” Waterhouse replied.

O’Shea stated, “Representatives from afar suggested that it wouldn’t be in our best interests to attend.”

Waterhouse added, “I’m here because I was asked to come and I’m very pleased to be here to state the case of the licensed people and the members. But I think there are others who may have had pressure on them.

“We have a very powerful CEO in Mr V’Landys. He controls racing, and he controls everyone in racing. You only have to look at the newspapers nowadays and the media coverage. It is very controlled. We don't have the true picture at all.”

Hurst then asked, “A number of submissions from people within the industry have called on this committee to call for a review of the powers and responsibility of Racing NSW as well as the funding mechanism?

“Is that something that both of you would support?”

O’Shea and Waterhouse agreed they are in favour of reviewing the funding mechanism.

“It’s got to go back to being a regulatory body. The problem is that it’s taken up too much power. Completely overstepped what it was devised for. It owes so much money. It is madness and shouldn’t happen,” Waterhouse said.

A number of committee members were still reeling over the alleged notice for witnesses and other industry participants to not speak. Some members asked questions such as, "Do you think it is time for V’Landys to be removed?" However, O’Shea shut down the conversation immediately, saying, “I’m not here to discuss tenure. I’m here to protect the sale of Rosehill.”

Waterhouse was more diplomatic in her response, “There’s always time for a change, that’s why we're here.”

Committee member Wes Fang was keen to know who advised the trainers not to appear on Monday, suggesting a closed hearing to divulge those names. O’Shea was against dwelling on that point, stating, “I don’t want to expand on this.”

No clear decision from NSW Racehorse Owners Association

Former Chairman and Honorary Treasurer of the Australian Jockey Club, David Capp Hall, was firmly in support of Rosehill staying put and also condemned Racing NSW’s annual report, particularly regarding the ‘welfare fund money’ for retired racehorses.

“We know they've bought properties. As for further details on where that money is going, there is just a paragraph and a very bland statement made, but no in-depth addressing of the question.”

Also making an appearance on Monday was Darren McConnell, Vice-President of the New South Wales Racehorse Owners Association. He advised that the association had not reached a verdict and would further consult its members and seek more information about the proposal and the outcomes should it be successful.

Several committee members asked what steps McConnell and the association had taken with the members of the New South Wales Racehorse Owners Association. McConnell advised that a poll had been conducted to determine members' opinions about the proposal and their knowledge of it, and whether they were against, unsure, or in favour of the sale, stating that over 50 per cent were against and 28 per cent still hadn't confirmed a position.

Committeeman Wes Fang inquired whether there were any metrics showing that owners with horses in training at Rosehill were more against the sale of Rosehill.

McConnell responded, “No, I am unsure how many of our association members have horses in training with trainers at Rosehill.”

Following a lunch break, David Borger made a short-sighted comment in his openness towards the sale of Rosehill, Borger, representing Business Western Sydney, stated that Rosehill provides low-density employment. “What, there are a few casual jobs? Some raceday staff and trainers?”

Borger seemed to have forgotten other employment roles in racing: track riders, farriers, veterinary staff, stable hands, administration staff, assistant trainers, racing managers, equine physios, track staff of various roles, and more.

There was later some conjecture when it was revealed that David Borger and Adam Leto, CEO of the Western Sydney Leadership Dialogue, receive monetary support from the ATC. This relationship had not been declared at the beginning of the hearing. Borger admitted that Business Western Sydney receives around $18,000 a year, while Leto’s organisation receives $30,000.

Leto added, “If Rosehill were sold, it is imperative that the Golden Slipper stays in Western Sydney. Warwick Farm should also be upgraded, as should Canterbury.”

A committeeman asked whether Leto felt the Golden Slipper could be held at Warwick Farm in its current state. Leto replied, “No, it cannot. It would have to be at Randwick. But I believe the race is too important to lose for Western Sydney.”

Chief Economist at the Centre for Independent Studies, Dr Peter Tulip, stated his support for the sale of Rosehill to boost ‘affordable housing’ in New South Wales. However, Tulip also emphasised that the decision to sell should be at the discretion of the landowners.

Fang calls Esplin submission ‘fearless’

Committeeman Fang described the submission from Hamish Esplin, President of the NSW Thoroughbred Breeders (TBNSW), as ‘fearless’.

However, it became clear during Esplin’s testimony that his organisation did fear reprisal from Racing NSW, as he had encountered it before. Esplin confirmed that he believed the BOBS Mare Bonus scheme was dropped as a consequence of TBNSW writing to the Racing Minister against the Balding tenure extension.

Esplin explained at great length the vital relationship between racing and breeding, including the impact of the Racing Australia stalemate on the Pattern, and how that could impact the global value of the Australian thoroughbred and therefore, breeders.

He added, “We have acted strongly on this because there are very few avenues for senior stakeholders like breeders in New South Wales to have direct communication with regulators such as Racing NSW and the ATC regarding issues that may arise.

“Racing NSW has a huge effect downstream on a massive number of people involved in the industry. Throughout this process, we have become largely disillusioned with how decisions were made and the people making those decisions as a broad group.”

“When the concept of a once-in-a-generation or once-in-a-lifetime proposition for the sale of a major racecourse is put on the table, generating massive revenues that would be spent on infrastructure and prizemoney, we are very concerned that our voice would be further diminished, and funds spent in ways we don’t feel are appropriate for our stakeholders.”

Fang asked Esplin, “If this were a transaction where the ATC were to retain all of the dividends from the proceeds of the sale and reinvest them in the ATC’s portfolio of assets and potentially a new asset, what would the position of the Thoroughbred Breeders be?”

Esplin replied, “We are in the same position as anyone. We want to see great racetracks and great racing. We want it to be safe for everyone and we want the funds to be spent in a way that furthers the scope of the sport.

“The reality is that the racing industry and the breeding industry are necessarily intertwined. So, what’s good for one is necessarily good for the other.”

He continued, “it's not made clear how Racing NSW can have the final say on how that money’s spent and where it’s spent, where the assurance is that it’s going to be spent properly for us. Whether by creating a new racecourse or investing in very expensive or large prize money races at the top, many of our members don’t think the benefits will trickle down to the broader membership of those who breed and race.”

Esplin shared he had been shown a series of mockups of alternative track options but conceded he didn’t feel these venues could replace Rosehill. “We had a presentation from the ATC at our board meeting the other week. The mockups looked fine, but anyone can do it on a map and show you what it’s going to look like.

“In our opinion, Warwick Farm, Canterbury, or any others aren’t suitable replacements for Rosehill, and it’s got nothing to do with whether they lengthened the straight or made it look beautiful. The simple fact is it’s driven by wagering, in our view, and the wagering is just not the same at those two other venues. The two venues that drive wagering in Sydney are Rosehill and Randwick.

“We understand the pressures outside the racing industry, such as housing. We don’t say it’s our position to dictate the policy of moving or creating racetracks, but it is extremely expensive to build new facilities, and we wouldn't want that money returned to the industry to be misspent in any sense.”

Esplin was then directly asked: “In your submission it says that a senior administrator in racing last year urged you to write to Minister Harris supporting the extension of Russell Balding as Chair (of Racing NSW). Was that senior administrator Peter McGauran?”

To which he replied, 'yes.'

It was then clarified by the committee that Peter McGauran is Chair of the ATC, and that he had confirmed to Esplin that he was the godfather to V'Landys son.

Esplin was then asked if the 20-year tenure of V'Landys was reflective of good corporate governance, to which he responded: “I like principles and theories, and I don't take it kindly when the rules of the game are changed. When you see a CEO petition so heavily to change legislation that we, as a body, didn't favour two years ago and then go harder two years later, it brings to mind questions about whether that organisation has really lost its way. Are the checks and balances there? Is there a broad enough representation of people saying this is not a good idea?

“As breeders, and from the feedback I get informally and through many conversations with small and large breeders, the representation in Racing New South Wales is just not broad enough. It doesn't listen enough to the interests of breeders, and it has become very difficult to get any meaningful dialogue.”

Feng added, “It’s quite clear in your submission you are relatively critical of Racing New South Wales. From what we’ve seen today, a number of people have come here and given evidence of concern that there’s a potential of leverage being used against them. That doesn’t appear in your submission, which is quite remarkable or fearless. The fact that you have put forward your views without the restrictions that other groups might have had because of the reprisals to speak out?”

Esplin added, “Certainly there’s fear among the people I speak to... It wouldn’t be unusual.”

Closing Monday’s hearing was Elio Celotto, Campaign Director for the Coalition for Protection of Racehorses. Celotto spoke only sparingly regarding the sale of Rosehill, however he indicated that he would like to see a robust traceability scheme implemented, and money injected into the welfare and rehoming of thoroughbreds in New South Wales. He also confirmed that the orgainsation struggled to get responses from Racing NSW regarding any welfare issues, but confirmed that this was consistent across all States.

When repeatedly asked for a financial figure he expected to be set aside for his welfare wishes, he failed to give a clear answer, with his main agenda appearing to argue against the use of the whip.