Racing NSW: ‘ATC is losing financial resilience’

Peter V’landys’ Racing NSW has moved to illustrate why it issued a notice to the Australian Turf Club to show cause why its board should not be replaced by an administrator, highlighting a list of areas – financial and otherwise – where it says the ATC is falling down.
RNSW issued a “participants bulletin” on Monday night, signed off by chair Saranne Cooke, in which the state’s racing regulator said it was moving to ensure the livelihoods of those in the industry in NSW.
It was a notice that effectively drew up battle lines between RNSW and the ATC, in a fight likely to become extremely bitter.
“Unfortunately, there has been much misinformation relating to the [ATC] and why Racing NSW has issued a show cause notice as to why the ATC should not be put into administration,” the missive began.
“Racing NSW wanted to take the opportunity to reassure all participants that this action was being taken to protect the interests of the entire NSW Thoroughbred Racing Industry. Racing NSW will work through this process with the ATC, in the best interest of all our 50,000 participants to ensure their jobs and livelihoods.”
Setting out to explain why RNSW intervened, the notice said the ATC was “heavily subsidised by the NSW Thoroughbred Racing Industry” and depended “almost entirely” on RNSW for operating and capital funding.
“Cash reserves have been shrinking, raising concerns around ongoing solvency,” it said. “Recent developments have raised alarms regarding governance practices.”
RNSW said the ATC’s situation had come about despite RNSW having increased the club’s funding from $31 million per annum in 2015 to $164.7m in 2025, having negotiated an extra $42m per year “in agreements to support the ATC”, and having “bailed out the ATC on multiple occasions when it couldn’t make payments needed for loan repayment, redundancies and grandstand cladding”.
The regulator hit back at assertions it did not distribute enough funding to the ATC.
“A frequent claim is that ATC should simply receive all wagering revenue generated by betting from all wagering operators on all its races,” the notice said.
“Based on this claim, the ATC would receive $80.1 million. The actual money it receives from Racing NSW from wagering highlights why this argument is absurd given that in 2025, the ATC actually received $233.1 million in total funding from wagering revenues (TAB distribution + Racing NSW contributions).
“That’s $153 million more than the ATC generated itself. It also received an additional $42 million per annum from agreements negotiated by Racing NSW with TAB, Sky Channel and Channel 7.
“This means Racing NSW is already giving the ATC far more than its own races directly produce from wagering. Without Racing NSW’s intervention, prize-money levels and operations would be unsustainable, which demonstrates the extent to which the ATC is subsidised by the NSW Thoroughbred Racing Industry.”
RNSW said ATC prize-money had increased from $89.3m in 2015 to $216.9m in 2025, “with the increase funded entirely by Racing NSW”.
“This increase was critical for keeping Sydney racing competitive and providing the ATC with additional opportunities to drive commercial revenues,” the bulletin said.
The ATC had $35m in debt facilities – made up of a bank loan and overdraft – RNSW said.
“ATC could not meet a $5 million repayment to its bank so Racing NSW had to pay it on behalf of the ATC and further had to be guarantor on the ATC’s $35 million debt facilities,” the notice said.
“Racing NSW had highlighted to the ATC that its cost structure was unsustainable and required to put in place a much more cost effective executive management structure.”
RNSW said the ATC’s cash reserves had dropped in the past decade from $50.1m to $21m, while its net assets had declined from $31.5m to “$8.7m (excluding $30m loan)”.
“Overall: ATC is losing financial resilience. Rising costs, falling reserves, and heavy borrowing have created significant doubts about its ability to survive without ongoing bailouts,” the bulletin said.
RNSW’s notice also listed “corporate governance issues”.
It noted there had been three recent resignations from the ATC’s board.
Chairman Peter McGauran resigned in July in the wake of the bungled attempt to sell Rosehill.
Ben Bayot and Natalie Hewson resigned from the club’s board on Thursday evening, less than 24 hours before RNSW issued its show-cause notice.
RNSW said two of the three resignations “explicitly cited governance concerns”, which is believed to be a reference to Bayot and Hewson.
“Racing NSW has evidence of breaches of ATC’s code of conduct by board members, and has written to ATC outlining these concerns, which have not been adequately addressed,” the notice continued.
“These governance failures compound financial weaknesses, making it harder for Racing NSW to trust and rely on ATC’s management to effectively operate our metropolitan race club.”
The ATC is believed to have two weeks in which to respond to RNSW show-cause notice.
According to media reports, the club has a $30 million debt due for repayment to the Commonwealth Bank by October, 2026.
It also owes RNSW $145m – but that is in the form of a non-interest accruing loan which is only repayable if the club sells a major asset.
In its 2023-24 annual report, the ATC listed net assets of $303 million.
Club chairman Tim Hale SC, and other industry figures contacted by ANZ, are confident the club will address the regulator’s concerns.
But, given the detail set out in such a concerted fashion by RNSW on Monday night, it appears the club will have a substantial fight on its hands to stop the regulator appointing an administrator.
Some observers fear the appointment of an administrator would represent an attempt to revive the plan to sell Rosehill for property development. In May, club members voted down that proposal, which the club said could have raised $5 billion.
However, one prominent industry figure told ANZ on Sunday it would be “remarkable” for an administrator to order the sale of Rosehill so soon after the members’ vote.
“An administrator is subject to fiduciary duties,” said Hamish Esplin, president of Thoroughbred Breeders NSW and a lawyer by profession. “They can’t just come in and do whatever they like. They still have to act in the interests of the stakeholders.
“In this instance, it would be remarkable for an administrator to come into a registered club, and say, ‘I get to disregard the views of the stakeholders which were only given in a vote three months prior’.”
Esplin said “that wouldn’t stand up to scrutiny” if appeals were lodged with courts or government.
Despite confidence from some that the ATC will repel the RNSW notice, the state’s regulator has previously appointed administrators to country and provincial clubs, including Tamworth, Wyong and Hawkesbury.
Esplin told ANZ he feared the notice issued to the ATC was an attempt to bring more control to RNSW.
“What’s the end-game of that show-cause hearing?” he said. “If the club is placed into administration, what does that mean for the centralisation of power for this sport, except to say it’s going to end up with Racing NSW?”