Presentation to the Gambling Review Commission Portfolio Committee

Presentation to the Gambling Review Commission Portfolio Committee November 2011

Thoroughbred Breeders Association of South Africa [Est 1921] 1. 2. Primary Mission~ To safeguard and advance common aim of all thoroughbred breeders To promote and encourage the genetic improvement of thoroughbred horses

Thoroughbred RACING q q q q q A substantial global business 63 countries 230, 000 thoroughbreds worldwide 150, 000 races run More than 1 million owners Global racetrack attendance 47 million Participate for the pleasure of the sport Provides employment to millions, mostly rural But its also a gambling business

Thoroughbred BREEDING q. A global commodity : q 182, 000 broodmares q Approx 10, 000 stallions q Approx 100, 000 foals born annually q Auction Sales in USA gross $1. 1 billon q Global sales estimated at $2 billion q South Africa approx $35 m (1. 5% of global)

South Africa’s proud position � � � 10 th largest breeding nation in the world 11 th ranked in the world by number of races Even higher ranked for – �Integrity of our racing – [SA Racing is broadcast to 50+ countries] �Soundness of our breed due to -quality of soil -quality of staff -strict medication policy Our horses are internationally competitive.

Positive Factors � Well developed agricultural infrastructure � A country suited to producing tough sound athletic horses � Burgeoning success in international racing � 30% of local market is forex driven � Labour intensive industry with the bulk of employment in rural areas � TBA sees horseracing as an extension of agricultural production

Success story : SA bred JAY PEG wins US$5 m Group 1 Championship in Dubai in 2008. As a result, over R 80 million at the next National Yearling Sale in 2008 was spent by foreign buyers. Bred in Hermanus, Jay Peg was sold for R 140, 000 as a yearling and won over R 40 m racing internationally.

Growth of Exports � Over the past 15 years, South African horses have succeeded in winning championship races in Dubai, Hong, Kong, USA, Singapore, Australia, Bahrain and high class races in Great Britain and France. � Foreign investment and exports have grown, but are constrained by regulations in regard to African Horse Sickness, a local disease.

Transformation Grooms Co-ops � 10 BBBEE Co-ops formed in 2010. � 20 BBBEE Co-ops currently being formed. � 7 members in each co-op. � 2011 Co-ops for the first time sold yearling. in their own right. � Co-ops formed in conjunction with the dti CIS programme. � Structured capacity building mentorship programme in place in partnership with CATHSSETA.

Co-op yearling at CPYS 2011

Challenges to Transformation � EXPORT RESTRICTIONS. �Decline owners. of domestic

Challenges : SA bred produce Racehorse Owners influenced by prize money (static / declining) DOMESTIC MARKET EXPORT MARKET International prize money excellent, BUT, export market threatened by AHS bans.

An industry in decline � Graphs � Reduction in no of breeders � Reduction in no of stallions � Reduction in no of mares � Consequent reduction in labour

451 408 509 459 419 423 346 400 490 527 600 683 730 800 853 925 956 967 1089 1094 1084 1109 1056 1060 1075 990 1000 1088 1135 1200 8 19 6 8 19 7 8 19 8 8 19 9 9 19 0 9 19 1 9 19 2 9 19 3 9 19 4 9 19 5 9 19 6 9 19 7 9 19 8 9 20 9 0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 10 19 No of registered breeders 1986 -2010 1400 No Of Breeders Linear(No Of Breeders) 200 0

150 107 106 105 102 103 111 128 171 170 213 252 230 265 277 288 335 329 350 120 142 200 181 250 231 300 296 376 400 8 19 6 8 19 7 8 19 8 8 19 9 9 19 0 9 19 1 9 19 2 9 19 3 9 19 4 9 19 5 9 19 6 9 19 7 9 19 8 9 20 9 0 20 0 0 20 1 0 20 2 0 20 3 0 20 4 0 20 5 0 20 6 0 20 7 0 20 8 0 20 9 10 19 No. of Stallions 1986 -2010 No of Stallions Linear(No of Stallions) 100 50 0

2010 2009 2008 2007 4230 4615 4403 4338 4562 4345 3583 4406 3941 4480 3970 4000 2006 2005 2004 2003 2002 2001 2000 4703 5000 1999 1998 1997 1996 1995 5600 6041 5641 7393 7410 7304 6752 6577 6129 5850 6000 1994 1993 1992 1991 1990 1989 1988 6867 7000 1987 7169 8000 1986 No of broodmares 1986 -2010 3000 2000 1000 0 No of Mares Linear(No of Mares)

Gross Auction Revenues 2000 -2011 R 319 222 500 R 281 999 000 R 275 088 000 R 258 801 000 R 252 751 000 R 225 675 000 R 166 192 600 R 137 930 000 R 88 248 000 R 75 496 000 R 66 414 500 R 59 750 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Barrier to growth of domestic market � Declining Purses � R 580 m net loss by owners annually � (excluding capital cost of horse)

Export Restrictions � South Africa has made great stride with AHS from the scientific perspective. �WHAT WE NEED � Governmental support and the political will to change current protocols.

The Future � There is a light at the end of the tunnel. � Many international racing jurisdictions are flourishing and these must be explored. � Thoroughbred horse racing must be recognised as a sport. � Thoroughbred Breeding is a major employer in rural South Africa and this must be taken into consideration. � Level the playing fields � Interim assistance is needed now.