The Victoria Racing Club’s boast that its Melbourne Cup Carnival generates $1 billion for the national economy comes less than three years after the Flemington-based organisation was handed $35 million in industry grants to survive the COVID-19 pandemic.
The payments were made by Racing Victoria to the VRC as the club lost 90 per cent of its revenue stream during the state’s lockdowns – the 2020 Melbourne Cup was run without a crowd, and only 10,000 were allowed on course the following year.
The 2024 Melbourne Cup Carnival attracted the biggest crowd since 2018.Credit: Getty Images
Two industry sources, speaking anonymously because they weren’t authorised to speak publicly on financial matters, said the VRC, which owes $10 million to Racing Victoria as part of a separate loan, did not have to pay back the $35 million.
Racing Victoria paid a further $39 million to Melbourne Racing Club and Moonee Valley Racing Club during the same period.
While racing continued during COVID-19 and wagering returns increased, Racing Victoria pocketed $16.6 million in 2020 from the state government’s “survival package”.
It was not the only sport to benefit from the government’s COVID-19 emergency fund at the time.
This masthead revealed in January last year that Tennis Australia was given a $63 million bailout package in September 2022, just four months before record crowds flooded back to Melbourne Park.
VRC chairman Neil Wilson told this masthead last week that the Flemington club relied on JobKeeper and “some support from the government and Racing Victoria” to make it through the pandemic as it lost membership, crowd and sponsorship revenue.
Despite losing $70 million across the past four financial years, he said the club would return to profitability in 2026 on the back of a lucrative new media deal with Tabcorp and Nine (owner of this masthead) and bumper Melbourne Cup week crowds.
The VRC announced on Thursday that last year’s Melbourne Cup carnival generated its largest-ever economic contribution – $1 billion nationally and $500 million to Victoria.
Kylie Rogers started as the VRC CEO in September 2024.Credit: Arsineh Houspian
The economic impact study, conducted by market research company IER, found that Cup week brought in 68,898 international and interstate visitors and generated increased spending on accommodation and hospitality – money that does not flow back to the racing club.
VRC CEO Kylie Rogers said the carnival “directly generates” more than 14,000 jobs across the week, “from milliners to make-up artists and retailers to restaurant owners”.
She said 45 per cent of general admission ticket buyers were under the age of 35, and that more than 11.5 million adults across the country engaged with Melbourne Cup.
“It is important that we continue to work alongside the Victorian government and Racing Victoria to ensure the Melbourne Cup Carnival remains one of the four headline major events in Melbourne,” Rogers said.
“It’s no secret that we have an ambition to increase prizemoney for the Melbourne Cup Carnival through Racing Victoria and VRC direct prizemoney top-ups, and we continue to have those conversations with Racing Victoria.”
The VRC’s annual reports show that prizemoney paid out for Flemington races across its 21 annual meetings has jumped $20 million since 2017 – from $41.4 million to $61.4 million. That was the year NSW introduced its mega sprint race the Everest.
Of that $61.4 million prizemoney in the 2024 financial year, Racing Victoria provided $51.8 million – money raised from gambling turnover – and the VRC contributed the rest.
Despite these four years of stinging losses, the VRC chose to return $30 million in prizemoney top-ups to industry participants – owners, trainers and jockeys.
VRC chairman Neil Wilson.Credit: Getty Images
As well as financially supporting the three metropolitan clubs during COVID-19, Racing Victoria also paid them $26 million in 2021 to consolidate media assets – Racing.com, RSN and Thoroughbred Racing Productions.
When asked about ongoing VRC funding, a Racing Victoria spokesperson said they were “working closely with the club on planning for next racing season and beyond”.
“Those ongoing discussions cover a range of matters including funding and prizemoney,” the spokesperson said.
Racing Minister Anthony Carbines said the government would always “back the racing industry, which generates more than $4.7 billion for the Victorian economy and helps sustain nearly 35,000 full-time equivalent jobs across all the codes”.
Last year’s annual report revealed that the VRC was in a parlous state. Its total current liabilities of $78.5 million exceed its total current assets by $52.5 million.
But Wilson said last week the club was in a strong position to emerge from a COVID-19 hangover.
Wilson said the VRC had seven hectares of freehold land at Flemington Park, which is valued at $70 million and underwrites its current $57.5 million ANZ loan.
He said the future of the land was part of the club’s master plan, which was yet to be signed off by the board or made public.
“We’re looking at the Flemington precinct, and we’re saying, ‘what will that look like in 2040-2050?’”
News, results and expert analysis from the weekend of sport are sent every Monday. Sign up for our Sport newsletter.
