A fallout between Racing NSW and Tabcorp over a slump in ticket sales and betting on The Kosciuszko horse race is behind a $6 million lawsuit that has rocked the thoroughbred industry, court documents reveal.
In papers filed with the NSW Supreme Court, Racing NSW has launched legal action against the ASX-listed company and major sponsor of The Everest over allegations it failed to adequately promote The Kosciuszko, a support race on Sydney’s marquee spring carnival day.
Racing NSW has alleged it will lose “no less than $6 million” in future revenue due to what it claims is Tabcorp breaching a sponsorship and strategic alignment agreement for The Everest and The Kosciuszko, which is due to run until 2031.
Tabcorp’s defence has labelled the allegation of a projected multi-million dollar revenue hit as “vague, embarrassing and irrelevant”.
The Kosciuszko is a rich race held on The Everest day for horses trained exclusively in regional NSW and requires punters to buy $5 sweepstakes tickets through Tabcorp retail outlets and online.
Twelve winners are chosen and are then allowed to negotiate with owners for a horse to run under their banner and divide the prize money by agreement.
Jockey Tyler Schiller prepares to salute as Front Page takes out The Kosciuszko last year.Credit: Getty
But a plunge in ticket sales and betting revenue from last year’s race is laid bare in Racing NSW’s statement of claim, which is has started a war between the racing regulator and the industry’s main funding source.
Racing NSW says only 162,461 tickets were sold for last year’s The Kosciuszko – well below the 250,000 target it says was agreed with Tabcorp in a written agreement.
Tabcorp will argue there was no agreed minimum target revenue or required level of ticket sales.
It resulted in Tabcorp paying Racing NSW $812,305 plus GST in December last year for ticket sales.
But Racing NSW contends that should have been $1.25 million if Tabcorp had fulfilled its commitments to provide no less promotion for the race than in 2018, when it first launched, and “used its best endeavours” to meet the required ticket sales.
Tabcorp denies the allegation.
The Racing NSW claim says chief executive Peter V’landys and chief operating officer Graeme Hinton sent emails to former Tabcorp boss, Adam Rytenskild, and the company’s chief customer officer, Jenni Barnett, highlighting concerns about ticket sales and revenue from the race.
Rytenskild quit Tabcorp suddenly in March after an allegation he used sexually inappropriate language about a female regulatory official.
The decline in ticket sales for last year’s The Kosciuszko was a massive drop on 2022, when 308,168 were bought.
The ticket sales had been steadily increasing since 184,246 were bought for the inaugural The Kosciuszko in 2018, which has proven to be a massive boost for owners and trainers in the NSW bush.
The court documents also reveal last year’s race suffered a 20 per cent drop in betting at $10,603,622, down from peaks of $13,559,544 (2021) and $13,345,885 (2022).
It’s the second major court case Racing NSW has been involved in this year, after launching preliminary proceedings against Racing Victoria and four other state racing jurisdictions over an alleged plot to start a breakaway national body separate to Racing Australia.
The Everest has been at the heart of that dispute after V’landys launched the world’s richest turf race in 2017 in October, a time which has traditionally been dominated by major Melbourne races.
The Everest is now worth $20 million and has rejuvenated Sydney’s spring carnival.
Racing NSW and Tabcorp declined to comment on Monday.
