Evaluation of MEART Report V1.0 Final

Submission to
Racing and Wagering Western Australia
Response to
Metropolitan Equine Asset Review Taskforce
Future Asset Needs for the WA Racing Industry
Michael Reindl BEc GDipEd
A: 5A Third Avenue, Bassendean WA 6054
M: 0419 966 256
E: mike_reindl@yahoo.com.au

Contents
1 EXECUTIVE SUMMARY ...............................................................................................4
2 Metropolitan Equine Asset Review Taskforce ............................................................6
2.1 Objectives of MRAT .................................................................................................6
2.2 Transition to MEART................................................................................................6
2.3 Release and Presentation of the GHD Report.....................................................6
2.4 GHD Report Does Not Meet Taskforce’s Objectives..........................................7
2.5 Gunston Report and Asset Rationalisation ..........................................................8
3 Minimum Standards for Public Policy ..........................................................................9
3.1 Key conclusions of the GHD Report were pre-determined and influenced by
executive bias ......................................................................................................................9
3.1.1 Further Decline of Industry ..............................................................................9
3.1.2 Stabilisation of Industry ................................................................................. 10
3.1.3 Industry Growth .............................................................................................. 10
3.1.4 Biased View of Sustainability leads to Pre–Determined Outcome......... 10
3.2 The GHD Report analysed evidence in a selective manner to direct the
argument in favour of a pre-determined outcome....................................................... 10
3.2.1 Public Attendance .......................................................................................... 11
3.2.2 Marketing Spend ............................................................................................ 12
3.2.3 Population Growth.......................................................................................... 13
3.3 The GHD Report evaluated options in a manner that led to a pre-determined
outcome ............................................................................................................................. 13
3.3.1 Option T1 ......................................................................................................... 14
3.3.2 Options T4-T8 ................................................................................................. 14
3.3.3 Evaluation of Shortlisted Options................................................................. 14
3.4 The GHD Report did not undertake a cost-benefit analysis of options that did
not support a pre-determined outcome......................................................................... 14
3.4.1 Relative Cost to Outcome ............................................................................. 15
3.4.2 Costing Option T1 .......................................................................................... 15
3.5 The GHD Report engaged in selective and unbalanced consultation leading
resulting in views opposing a pre-determined outcome were not considered........ 15
3.5.1 Wagering providers........................................................................................ 15
3.5.2 Public Opinion................................................................................................. 16
3.5.3 Other Equestrian Activities ........................................................................... 16
4 The Preferred Option ................................................................................................... 17
4.1 GHD Report Methodology points to Option T1 ................................................. 17

4.2 Stabilising the industry may consider other options......................................... 17
4.3 Other industry concerns ....................................................................................... 17
4.4 Privatisation of the WATAB.................................................................................. 18
4.5 ERA Review of Options for the Racing industry............................................... 18

1 EXECUTIVE SUMMARY
Racing and Wagering Western Australia (RWWA) has recently released a report
“Future Asset Needs for the WA Racing Industry” (GHD Report), prepared by
consultancy firm GHD, as part of the Metropolitan Equine Asset Review Taskforce
(MEART).1
It is unclear as to the purpose of the GHD Report due to a lack of clarity around
whether the report is the final report of the MEART, a discussion document within the
context of a wider MEART process or an analysis / review process separate to
MEART.
The scope defined in the GHD Report differs from the objectives outlined by RWWA
when establishing the Metropolitan Racing Asset Taskforce (MRAT) in October
2014.2 Hence, whilst RWWA declared the report “independent”, the scope,
assumptions and methodology makes that claim questionable. 3
The GHD Report appears written in a manner where the outcome was
predetermined and the authors have gathered evidence and argued to achieve that
specific outcome, at the exclusion of other considerations.
The appearance of pre-determination in the GHD Report reduces its usefulness,
particularly given weak analysis which is inconsistent with what most would consider
the minimum conditions for good public policy.4
 Key conclusions of the GHD Report appear pre-determined and influenced by
executive bias
 The GHD Report appears to analyse evidence in a selective manner to direct
the argument in favour of the pre-determined outcome
 The GHD Report appears to evaluate options in a manner that leads to the
pre-determined outcome
 The GHD Report does not include a cost-benefit analysis of options other
than the pre-determined outcome
 The GHD Report appears to engage in selective and unbalanced consultation
with views opposing the pre-determined outcome not considered
The GHD Report considered eight premium thoroughbred options. Provincial
thoroughbreds and harness racing only received precursory evaluation as only
“Thoroughbred Premium” contained multiple options for consideration.5
The GHD Report reached the conclusion that Option T5 is the optimum asset mix,
including asset rationalisation leading to the development of non-metropolitan ghost
tracks, wholly supported by off-course gambling revenues, where public attendance
is marginally represented (400 people) and facilities are focused solely on
broadcasting content.
1 Press Release, Independent Report Identifies Optimal Metropolitan Equine Racing Assets To Serve
Future industry Needs (September 2015),RWWA
2 Press Release, Metropolitan Asset Racing Taskforce Announced (October 2014), RWWA
4 Australian National Audit Office, Some Better Practices Principles for Developing Policy Advice
(2001), http://www.anao.gov.au, Commonwealth of Australia
5 GHD Report, Page 61

The GHD Report commenced with a pessimistic view of racing’s future, contrary to
current national and international trends. The report then eliminated viable options
on the unsubstantiated assumption the future of the racing industry could only exist
in the Peel Region.
The GHD report fails to consider other initiatives such as
 Better utilisation of existing assets through increased marketing spend
 Change to the product mix to meet new market expectations
 Develop Pinjarra Park as the multi-purpose training and event facility in
preference to Lark Hill
The GHD Report’s bias towards an outcome around the Peel Region and in
particular one which involved the development of Lark Hill as an event facility is
evidenced by those options progressing to a short list despite not meeting the criteria
that the report itself defined.
Had the GHD Report represented a truly “independent” process, using the reports
own evaluation criteria (excluding the criteria for location in the Peel Region), the
option most likely to address the criteria best, both quantatively (cost) and
qualitatively (outcomes) was Option T1 (retention and redevelopment of both Ascot
and Belmont).
Also, the GHD Report appears to have not considered and evaluated a number of
viable alternatives and the industry should further investigate excluded options
before making an informed decision with all facts fairly presented.
The GHD Report unintentionally raises matters with regard to the governance of
racing and whether RWWA is still a relevant body in the current wagering and racing
environment. It would seem difficult to agree a position on the future asset needs of
the industry without greater clarity of those governance issues going forward.
Given RWWA lacks the independence to provide such advice, an alternative body
such as the Economic Regulation Authority appears much better placed to undertake
such evaluation and provide government with relevant advice.

2 Metropolitan Equine Asset Review Taskforce
2.1 Objectives of MRAT
RWWA announced the establishment of MRAT in October 2014, indicating the
taskforce would consider current and future asset utilisation from an industry and
public interest perspective. 6
The taskforce was described as timely and necessary in demonstrating to
government, the most effective and efficient manner for deploying and utilising
racing’s assets and was intended to include a number of areas of assessment before
reporting back to the RWWA board by 31 May 2015:7
 The effectiveness of delivering racing and training functions to racing industry
participants;
 The effectiveness of delivering services and facilities for Club members and
the general public for both racing and non-racing events;
 Club and industry sustainability issues associated with current metropolitan
assets and their interface with inner provincial tracks;
 The extent of capital needed to refurbish and modernise existing assets to a
standard suitable to meet future requirements;
 Identification of optimal and where appropriate alternate locations within the
metropolitan area to achieve sustainable outcomes;
 The impact if any on nearby provincial and country clubs and how they might
contribute to a better model going forward;
 The likely source and practicality of securing funding to support racing’s
infrastructure needs for the future.
2.2 Transition to MEART
RWWA updated the progress of the Taskforce in March 2015, indicating the
taskforce had completed an assessment of assets, animal populations and
participant locations. 8
The update indicated the process was to include detail of those preliminary findings
in a Final MEART Report along with an assessment of the ongoing capability of the
current assets and the description of future requirements for each racing code and
the optimal mix of facilities. 9
2.3 Release and Presentation of the GHD Report
RWWA released the GHD Report on 9 September 2015 and 5 days later invited
industry participants to attend a forum at Gloucester Park. 10 11
8 Press Release, Metropolitan Equine Asset Review Taskforce Update (March 2015), RWWA
9 Press Release, Metropolitan Equine Asset Review Taskforce Update (March 2015),RWWA
11 Facebook Postings (9 and 14 September 2014), www.facebook.com/racingandwageringwa, RWWA

2.4 GHD Report Does Not Meet Taskforce’s Objectives
The GHD Report is unclear whether the report represents the Final MEART report, a
component of MEART’s Final Report or a discussion document unrelated to MEART.
The GHD Report describes the scope differently to either of RWWA’s two press
releases on the matter.
If assessing the GHD Report against the press release, the following objectives are
not achieved.12
 The effectiveness of delivering racing and training functions to racing industry
participants;
 The effectiveness of delivering services and facilities for Club members and
the general public for both racing and non-racing events;
 Club and industry sustainability issues associated with current metropolitan
assets and their interface with inner provincial tracks;
 The impact if any on nearby provincial and country clubs and how they might
contribute to a better model going forward;
 The likely source and practicality of securing funding to support racing’s
infrastructure needs for the future.
Further, the GHD Report only partially addresses the following objectives and only to
the extent the reports preferred option (Option 5) was costed against the cost of a
new facility in the Peel region (Option 7).13
 The extent of capital needed to refurbish and modernise existing assets to a
standard suitable to meet future requirements;
 Identification of optimal and where appropriate alternate locations within the
metropolitan area to achieve sustainable outcomes;
Other than the following statement, the GHD Report does not provide evaluation or
insight into the ongoing capability of the current assets despite this being described
as an intended outcome announced RWWA’s second release.14
Typically most existing assets held by the clubs are over 40 years
old and have the capacity to accommodate public attendances far
in excess of current attendance numbers. The industry is over
capitalised with respect to the extent of public amenity facilities, but
under capitalised with respect to condition. These public facilities
are in need of periodic renovation to maintain functionality,
occupational health and safety, regulatory compliance and user
satisfaction.
For these reasons, the GHD Report does not appear to meet the requirements and
outcomes set forth by RWWA when it established the taskforce.
12 Press Release, Metropolitan Asset Racing Taskforce Announced (October 2014)RWWA
13 GHD Report - Appendix D
14 Press Release, Metropolitan Equine Asset Review Taskforce Update (March 2015),RWWA

2.5 Gunston Report and Asset Rationalisation
In 2014, Western Australian Racing Representative Group (WARRG) engaged a
consultant Ray Gunston to prepare a report (Gunston Report) to assist in the
deliberations of the WA Racing Industry in relation to the potential privatisation of the
Western Australian TAB (WATAB).
Gunston concluded that the current distribution from the WATAB was only sufficient
to fund the operational aspects of racing and the industry needed to rationalise
assets and seek alternative funding sources for infrastructure.15
With little or no capacity to fund infrastructure maintenance and
development requirements across the WA Racing Industry from its
operational cash flow break-even situation, it is critical that the
entire WA Racing Industry be prepared to address the issues of
improved efficiency and rationalisation of infrastructure to sustain
the WA Racing Industry in an integrated fashion.
The WA Racing Industry must pursue funding alternatives for
infrastructure in any potential privatisation process (or even if it
does not occur), but to have any success in this it needs to commit
to pursuing such efficiency / rationalisation processes.
Unfortunately, the GHD Report does not address the matters related to infrastructure
raised in the Gunston Report not does it make mention of the report despite the
report being the most recent reference to the state of the industry in WA.
15 Gunston Report, Page 17.

3 Minimum Standards for Public Policy
3.1 Key conclusions of the GHD Report were pre-determined and
influenced by executive bias
The GHD Report assumes all future growth in relation to racing revenue shall come
from off-course wagering. This leads to the conclusion that racetracks with facilities
for public attendances will make way for race tracks designed for broadcast only.
The GHD assumption further leads to the conclusion that centrally located racetracks
are not required, as public attendances are not important. However, this is confusing
as the authors make public attendances a criterion for assessing options at a later
stage in the report.
This assumption reflects a wagering only bias and ignores the social and cultural
benefits racing provides to a community. That the GHD Report adopted a wagering
only bias is consistent with perceptions of the current role RWWA plays in the
industry.16
The Gunston Report also notes this wagering bias. 17
The observation in this regard, reinforced by a number of
participants’ commentary, is that RWWA has probably prioritised its
attention in recent times to the wagering part of the business to a
significantly greater extent than its PRA obligations.
That the GHD Report takes on a predominately wagering focus suggests that a bias
from RWWA has influenced the outcome of the report.
3.1.1 Further Decline of Industry
The GHD Report considered options based on the decline of the racing industry with
an assumption the industry is heading towards a scenario where the only future was
asset rationalisation, development of non-metropolitan ghost tracks, wholly off-
course gambling revenues, marginalised public attendance and facilities focused
solely on broadcasting content.
The report presents this scenario as fait accompli without any evaluation of events
that have given rise to current trends or options available to race clubs and the
industry.
The view represented in the GHD Report is that no matter what action clubs and the
industry may take, the number of people attending races will decline to a point where
16 RWWA produces a series of reports tilted “Western Australian Racing Industry Status Reports”,
analysing these reports would show that since 2007 racing in WA has become stagnant with zero or
negative real growth in the number of race meetings, races, prizemoney and expenditure. In contrast,
RWWA has grown the wagering business by 14% per annum and increased the number of thorough
bred meetings covered by 78%. As Proportion of the WATAB’s product base, WA racing has gone
from 12% of meetings to less than 7% of meetings covered by the WATAB

the only options available are ghost tracks or no racetracks. With ghost tracks more
favourable as off-course wagering such still requires racing product for betting.18
3.1.2 Stabilisation of Industry
The GHD Report ignored the evidence from other parts of Australia, as well as the
UK, where that effort with regard to marketing spend and promotion has resulted in a
reversal of the declining trend to near record high attendances.
Because the GHD Report fails to evaluate the reason for previous declines and
changing global economic circumstances, the report never considered options where
the industry stabilises and where with refurbishment, upgrades and minor
improvement to existing assets the racing industry is able to meet current and future
needs.
It would be suggested that evidence form 2013/14 onwards would show this is the
trend currently experienced in NSW, Qld and South Australia.
The Gunston Report highlights racing in WA is for all intent “treading water” with
minimal growth or decay.19
One argument would be that that the lack of industry growth in WA is a result of the
wagering focus of RWAA mentioned previously.
3.1.3 Industry Growth
Most observers would agree that a growth based scenario where an increased
awareness of racing develops a deeper engagement with the sport and results in the
need for new facilities to capture increasing demand is unlikely. The scenario
however is not improbable and is the scenario that probably best describes the
current experience in Victoria.
3.1.4 Biased View of Sustainability leads to Pre–Determined Outcome
Biased by the assumption of industry decline, the GHD Report never addresses how
the industry becomes sustainable.
The GHD Report evaluates sustainability on the basis of following the population
growth and converting training facilities into broadcast only venues. The definition of
sustainability used in the report drives the report to the pre-determined outcome.
3.2 The GHD Report analysed evidence in a selective manner to
direct the argument in favour of a pre-determined outcome
The GHD Report supports a negative outlook for the racing industry using data
predominantly more than 3 years old. This data also coincided with aspects of
economic downturn in 2009 and/or 2011. In compiling the report, there seems little
independent collection or evaluation of the data other than that provided by
RWWA.20
18 RWWA have previously presented that buying race product to wager on from other jurisdictions is
cheaper than creating race product in WA
19Gunston Report, Page 62.
20 Disclaimer on Page i of the GHD Report (emphasis added)
GHD has prepared this report on the basis of information provided by Racing and
Wagering Western Australia and others who provided information to GHD (including

This again brings into question the extent of independence displayed in the report.
The GHD Report creates the impression only data supporting the pre-determined
outcome was included and data representing any inconvenient truth was deliberately
omitted.
3.2.1 Public Attendance
The GHD Report argues its negative outlook on national and international trends
showing declining racecourse attendances and to support this, the report reproduces
a table from the Economic Impact of British Racing 2013 (Deloitte Report) making
the comment that as in Australia total attendances at race meetings in Britain have
declined over the past decade. 21
The Comment in the GHD Report differs considerably from what the Deloitte Report
said.22
Total attendance experienced a gradual decline to 5.7m between
2003 and 2009, but then recovered and increased to a modern era
record of 6.15m in 2011. Part of the reason for the recovery was
the activities of Racing For Change (now Great British Racing),
which worked closely with the racecourses on a large range of
initiatives to promote and encourage race going, including new
racegoers.
The GHD Report also omits that the Deloitte Report indicated in 2012, that British
horseracing attendances were hampered by the second wettest summer on record
forcing the cancellation of a significant number of race meetings and the clash
between the 2012 London Olympics and a number of feature racing festivals also
had an impact on attendance numbers.23
The GHD Report did not seek an update on the information. The Racecourse
Association announced updated figures in August 2015 and these should have been
available to the GHD Report. 24
The Racecourse Association has announced a significant increase
in British racing’s attendances in the first six months of 2015. The
overall figure of 2,987,103 is higher even than the amount reached
over the same period in 2011, the record year for attendances in
British racing. These figures indicate a rise of almost 300,000 on
the same period in 2014, which represents a rise of 10%. The
average number of racegoers at each fixture sits at 4,184, an 8%
increase on 2014 and higher even than the record figures of 2011.
Governmentauthorities)], which GHD has not independently verified or checked beyond
the agreed scope of work. GHD does not accept liability in connection with such
unverified information,including errors and omissions in the report which were caused by
errors or omissions in that information.
21 Page 20 of the GHD Report
22 Deloitte and British Hor5seracing Authority, Economic Impact of British Horse Racing 2013,
www.britishhorseracing.com, British Horse Racing Authority
23 Deloitte and British Hor5seracing Authority, Economic Impact of British Horse Racing 2013,
www.britishhorseracing.com, British Horse Racing Authority
24 The Racecourse Association, August 2015 Newsletter, www.britishcourses .org

3.2.2 Marketing Spend
The GHD Report further argues the declining state of affairs regarding racing was
evident in a table reproduced from Brisbane Race Club’s Strategic Plan 2015-2017
(BRC Plan).
The GHD Report makes the statement Perth Racing experiences similar trends to
Brisbane Race Club (BRC) with average annual attendance declines of between 4
and 6 percent.25 But the GHD Report does not present any annual attendances
figures for either Perth Racing or BRC? 26
Year
Attendances27
Perth Racing Brisbane Race Club
2010 205,321 226,563
2011 191,224 219,057
2012 200,493 195,212
2013 175,017 195,006
2014 168,657 179,135
What the GHD Report omitted to reproduce from the BRC Plan was the statement:
Clubs are working harder to maintain visitors and spending more to
acquire them – we are below trend
What the reproduced table in the original document considered, was that the BRC
had the lowest marketing spend per meeting of any club in Australia. The table was
intended to highlight that to compete with other clubs, the BRC needs to increase its
marketing spend comparatively to other clubs.28
25 Page 31 of GHD Report
26 Whilst GHD is correct that both clubs are experiencing declining attendances; however the reasons
may be very different.
 The BRC was only formed in 2010 by the amalgamation of 2 other clubs and therefore initial
attendances were high
 In 2011, BRC had a significant crowd boost from an appearance by Black Caviar
 In 2014, BRC closed Eagle Farm racecourse for refurbishment and racing QLD transferred
some Saturday Premium Race meetings to Ipswich and the Gold Coast.
 The 2014 figure for Perth Racing includes 4 fewer race meetings and on an attendance per
race meeting had made some recovery above the 2013 level
 The 2013 figure for Perth Racing is most likely to be associated with the general economic
downturn rather than any specific trend away from racing
27 2013/14 Annual reports for both Perth Racing and Brisbane Race Club
28 Perth Racing has the second lowest marketing spend per meeting in Australia and that likewise to
the BRC is the most likely reason Perth Racing scores lowly in average attendance, membership and
food and beverage spend.

3.2.3 Population Growth
The GHD Report mentions Perth Racing having commissioned a market sounding
and survey report which suggested improved attendances relied on targeting the
“Young Explorer” population group. 29
Metrix determined that the greatest opportunity to generate new
entrants to racing, increase revenues and encourage ongoing
involvement with the industry existed with the “Young Explorers”,
working adults aged less than 30 years.
The GHD Report then uses this statement as the sole justification for pre-
determining that racing’s future was in the greater Peel region on the basis
sustainability required racing to “follow the population”. 30
However, whilst population growth in that corridor will occur, the GHD report makes
no attempt to analyse the demographics of that growth to determine whether it links
back to the “Young Explorer” population group.31 32
Further, the GHD Report makes extensive mention of declines in on-course
wagering and food & beverage spend as drivers of sustainability but never assessed
whether the population growth in the Peel region would firstly lead to higher
attendances or whether those attending had sufficient discretionary spending
capabilities to deliver those outcomes.33
3.3 The GHD Report evaluated options in a manner that led to a
pre-determined outcome
The GHD Report evaluated eight options and only the “Thoroughbred Premium”
contained multiple options for consideration. The report assessed options at two
stages with different criteria at each stage. 34
 The first stage evaluated cost, sustainability and attendances.35
 The second stage evaluated production, population growth and risk.36
29 GHD Report Page 50
30 Later in the GHD Report “follow The Population” and the location of facilities becomes a major
criteria eliminating all but the preferred option
31 ABS statistics show the Peel Region has a 10-20% lower average income than the metropolitan
area
32 The Keralup Masterplan includes analyse of the demographics of the growth in the region suggests
that as the population in the region grows it will become highly characterized by young people (20-39)
and older retirees (50-79 year olds). Over 40% of households will be young families with children and
over 20% will be single person pensioner households. Most will be employed in the fields of transport,
clerical, retail and labouring area but is highly dependent on the further development of industrial area
and industry nearby or unemployment could be high. Few will be employed in the fields of Managers,
professionals and associate professionals
33 Perth Racing’s Annual Reports currently show attendances of around 2000 per meeting with on-
course wagering at around $185 per person. The table in the BRC Plan shows Perth Racing’s
average F&B per person is around $54. Any future analysis or evaluation needs to utilise these
figures as the base.
34 GHD Report, Page 61

3.3.1 Option T1
The GHD Report describes Option T1 as the “Do Nothing” option with Ascot and
Belmont retained.37
The GHD Report eliminates Option T1 from consideration evaluating it as not
meeting the criteria related to sustainability and attendances.
Most people undertaking a similar analysis however would have considered the
status quo as the best baseline for sustainability and attendance.
Had the GHD Report made the assumption that current attendances at Perth Racing
were the baseline, Option T1 should have been evaluated as meeting the criteria but
the report provides no justification for why it eliminated Option T1.38 39
3.3.2 Options T4-T8
The GHD Report describes Options T4-T8 as options based on “follow the
population” referring to the need for development of event facilities in the Peel
Region.40
The GHD report evaluates all the Options T4-T7, as meeting the criteria for
attendance?
If T1 is the baseline and attendances at Perth Racing are presently averaging 2000
people per meeting; compared to Options T4-T7 which only include provision for 400
public attendees, it is unclear how the GHD Report determined that Options T4-T7
meet the criteria for a positive impact on attendances.41
3.3.3 Evaluation of Shortlisted Options
Using the evaluation criteria in the GHD Report only Options T1-T3 should have
been shortlisted.42
The second stage of evaluation included criteria to develop premium facilities in the
Rockingham/Mandurah areas and given Options T1-T3 do not provide for that, they
would have been eliminated at that point leaving no viable option.
3.4 The GHD Report did not undertake a cost-benefit analysis of
options that did not support a pre-determined outcome
Other than Appendix D, the GHD report contains no costings in relation to the
various options evaluated. And then, Appendix D only costed options T5 (Preferred
Option) and Option T8 (New Peel Region facility) 43
38 Given the definitions for sustainability and attendance on Page 58 of the GHD Report, the minimum
benchmarks for measuring sustainability would be starters per race and wagering turnover. Perth
Racings’ Annual Report show these figures as 11.05 starters and $161,000 per races
39 Given the definitions attendance on Page 58 of the GHD Report, the minimum benchmarks for
measuring sustainability would be average attendance per meeting, on-course wagering per
attendee, F&B per attendee. Perth Racings’ Annual Report show these figures as 1939 attendees,
$186 per person and $54 per person
41 Appendix D costs the options as being public amenities for accommodation of 400 people plus 200
public car bays
42 The GHD Report provides no reason why Option T3 was not shortlisted as it partly met, met or
exceeded the criteria.

3.4.1 Relative Cost to Outcome
The GHD Report evaluated each of the 8 options for the relative cost to outcome,
with Option T3 evaluated as only partially meeting the criteria and Option T5
(evaluated as exceeding the criteria. All other options were evaluated as meeting the
criteria.44
There is no detail as to the manner in which the GHD Report conducted the
evaluation or reached the conclusions published given there were costing for only
two options.
3.4.2 Costing Option T1
Costing Option T1 and assuming that some aspects of the upgrade to Lark Hill (at
least 1 new sand track) are required, the cost of option T1 would be $12.5 million
less than the Preferred Option (T5). Option T1 would also be achieved without the
loss of attendance and the impact on on-course wagering caused by transferring
meeting from Perth Racing to the new venue.
Facilities Option T1 Option T5 Option T8
$’ millions
On-course Stabling 33.7 33.7
Lark Hill Redevelopment 8.0 43.3
Keralup Development 227.3
Pinjarra and Northam Racecourses 14.8 14.8 14.8
Harness Racing 32.8 32.8 32.8
Ascot 29.5 29.5 29.5
Belmont 24.0
GST 14.3 15.4 29.5
Estimated Total 157.1 169.5 324.6
3.5 The GHD Report engaged in selective and unbalanced
consultation leading resulting in views opposing a pre-
determined outcome were not considered
The GHD Report identified a list of primary stakeholders, predominately RWWA,
race clubs and industry associations.45
3.5.1 Wagering providers
The GHD Report mentions wagering as major factor for determining the future
optimum asset use on the basis off-course wagering would drive future funding.
The GHD Reports also makes representations about corporate bookmaker’s seeking
to drive better margins on wagering products and reducing returns to racing in the
future.46
However, the only wagering organisation consulted in the GHD Report was RWWA,
representing the WATAB. The process for developing the Report did not seek the
43 Option T8, like option T1 was eliminated on the grounds of not contributing to positively to
attendance. It is unclear how the GHD Report made this assessment

views of the Bookmakers Association or other wagering providers. Therefore it is
unclear how the report reached the conclusions about the attitudes of other wagering
providers.
3.5.2 Public Opinion
The GHD report also mentions public attendances are in decline and this impacts
on-course revenue from both wagering and food & beverage spends.
Yet the only analysis of public attendances was reference to a Perth Racing
commissioned sounding and survey and the GHD only makes the reference to justify
targeting population growth with a high proportion of under 35’s.47
The GHD Report made no effort to engage public attendees as part of a consultation
process.
3.5.3 Other Equestrian Activities
Between October 2014 and March 2015 the taskforce changed from one looking at
“racing assets” to one looking at “equine assets”. The reason for the change is
unclear but the scope doesn’t seem to have expanded to include other equine
activities.
Belmont Park is presently the major selling venue for Magic Millions which uses the
facility for three sales per annum. According to the consultation list in the GHD
Report, neither Magic Millions nor any other bloodstock agency was consulted
In the north-eastern corridor of the metropolitan area is the State Equestrian Centre,
surrounded by the Swan Valley’s equine base. Looking at initiatives such as Racing
Victoria’s off-the-track program and international facilities such as Singapore where
equestrian pursuits are collocated with racing, the GHD Report may have benefited
from consultation with other equestrian (non-racing) bodies.

4 The Preferred Option
4.1 GHD Report Methodology points to Option T1
If properly evaluating the options in the GHD Report using the reports own criteria
(excluding the requirement to develop a premium event facility in the Peel Region)
the preferred option should have been Option T1.
 The option is cost effective coming in at $12.5 million less than option T5
 The option is sustainable on the basis that the facility is presently being used
at higher rate than any of the proposed facilities
 The option has a positive impact on attendances as the savings from lower
infrastructure costs can be directed to better marketing outcomes
 The options provides fewer barriers to participation as both Belmont and
Ascot are centrally located and accessible from the south by the freeway or
from the east by Great Eastern Highway
 The option is lowest risk in relation to unanticipated costs, environmental
impact, disenfranchising of participants, damage to reputation and image.
Baselines are established in relation to attendance, on-course wagering, f & b
spend and the like, where as a new site these are unknown.
4.2 Stabilising the industry may consider other options
If the report had taken the assumption that the racing industry could take measures
to stabilise declining attendances and on-course revenue, the options considered
may have focused more on the optimisation of existing assets.
 Rationalise existing land holdings by disposing of excess land parcels, then
redevelop Ascot and Belmont Park through the repurposing of existing
buildings.48
 Redevelop Pinjarra Park as a major training and event centre with new tracks
and increase the number of meeting and allocate prime meetings to better
utilise the courses existing public attendance capacity of 5000.49
4.3 Other industry concerns
The GHD Report unintentionally raises matters with regard to the governance of
racing and whether RWWA is still a relevant body in the current wagering and racing
environment.
When RWWA was formed, the WATAB was the dominate provider of all wagering in
Western Australia and Government combined racing and wagering to provide the
racing industry security over its major funding source.
48 Revisit the evaluation of Option T1 but with a positive outlook
49 If Pinjarra Park was redeveloped as the major track and training facility in the Peel Region, would
Lark Hill be required?

However, the interests of wagering and racing may not always be the same and in
the context of RWWA may have resulted in a greater focus on wagering than the
racing industry itself as previously identified.50
It needs to be understood that the interests of wagering and the
interests of the racing industry are not necessarily always aligned
and in fact in a number of instances can be in conflict. This is
particularly so for example in the context that a racing program that
ensures support and exposure for regional racing to underpin the
racing industry’s objectives is unlikely to necessarily match a
program that optimises wagering revenues.
Nonetheless, circumstances have changed with the WATAB facing ever increasing
competition from other wagering providers and the position of dominate wagering
provider in WA may not continue into the future.
Racing too may have growth limited if the opportunity to seek arrangements with
other wagering providers is not considered. Other wagering providers may provide
arrangements that may prove more beneficial than the current one with the WATAB.
4.4 Privatisation of the WATAB
Government has raised the question about considering a sale of the WATAB, similar
to what has occurred in other states. 51
To do so would require the disaggregation of RWWA, changes to legislation and new
models for funding the industry as suggested by the Gunston Report.52
The disaggregation of the WATAB does not necessarily need to lead to the sale of
the asset however, and Government may choose to operate both entities (racing and
wagering) separately but under government control to protect the funding of the
industry until more detailed arrangements are made.
The Gunston Report also raises this matter as a priority confronting the WA
Government regardless of the issue of privatisation.53
In order to reach such a determination on these matters though, government needs
to undertake a review of the current operating environment and RWWA lacks the
independence to facilitate such a review process.
4.5 ERA Review of Options for the Racing industry
The Governance of RWWA provides that the Minister is responsible for agreeing to
the organisations Strategic Development Plan and the Minister may make written
directions with respect to a Strategic Development Plan. In effect, legislated
elements give the Minister the power to determine the policy framework around
51 Hon Mike Nahan MLA, Our State Budget 2015-16 – Securing Our Economic Future (14 May 2015),
www.mediastatements.wa.gov.au, Government of Western Australia

which racing operates in WA without involvement in the day to day operations of
RWWA.54
The Minister however also must seek the concurrence of the Treasurer, who
amongst other options may refer matters to the Economic Regulation Authority for
inquiry. As such, the Treasurer may want to consider an inquiry into racing looking
into areas such as:
 Governance structures for the racing industry
 Improving WATAB performance (Unencumbered by racing obligations)
 Funding options for the racing industry with multiple wagering providers
 Enabling racing clubs to leverage competition in the wagering industry
 The tax and product fee structure for wagering
Such an inquiry would position the industry and government to make a better
informed decision regarding the future operation of the WATAB and the racing
industry more generally.
54 Government of Western Australia, Racing and Wagering Western Australia Act 2003 (2014),
www.slp.wa.gov.au/legislation/statutes.nsf/default.html, State Law Publisher

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