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Gold Circle November 09 www. bus- ex. com 79 gamble are often viewed as licences to print money, process as it might seem, as Alan Swaby learns A decade ago, horse racing in South Africa was still being run much as it had been for the previous 100 years. Individual racecourses were owned by their members- largely a white, middle- class elite- who indulged their passion for the sport of kings along ' club', albeit straight, lines but with the added side benefit of having exclusive monopoly over punters wanting to place a wager ( at least legally). Overnight, the advent of casino licences and the lotto created competition for horse racing. In the beginning, this was not completely fair competition. " At the time," explains Graeme Hawkins, COO of horse racing promoter Gold Circle, " taxation for horse racing was higher than for other forms of gaming. When the turf clubs of Gauteng approached the state government about achieving parity, the local minister of finance agreed, but at a price." With one eye on the white colonial trappings of the sport, the Gauteng government agreed to a level playing field, provided the industry restructured to create more openness and wider public ownership. As a result, the four Highveld race tracks merged and metamorphosed into Phumelela Gaming and floated on the Johannesburg Stock Exchange. " The rest of the country followed suit," says Hawkins, " but split on political lines. While seven of the nine South African provinces chose to align with Phumelela, turf clubs in the Western Cape and Kwa Zulu Natal ( provinces not governed by the ANC) amalgamated to form Gold Circle Racing." With less governmental pressure to go public, Gold Circle went corporate but with former clubs as its shareholders. This way, profits don't have to be distributed as dividends but rather are ploughed back into the sport and used to maintain and improve the five racecourses and various training facilities Gold Circle operates. But it is not only government policy that has changed the face of horse racing- so too has technology. Punters no longer have any need to go to the track to have a bet. Gold Circle runs the tote through a network of 68 company- owned betting outlets plus another 119 independently owned outlets run by agents. In total, the tote generates around R5 billion in bets, of which R2.2 billion comes from Gold Circle's territory. For punters who prefer knowing where they stand, fixed odds bookies generate a further R3 billion in bets and Gold Circle has a slice of this through its subsidiary, Betting World. With only Christmas Day off, there are 364 days of racing in South Africa, thereby justifying a dedicated 24/ 7 TV channel, jointly hosted by Gold Circle and Phumelela. In fact Phumelela and Gold Circle operate quite closely on a daily basis, pooling their skills and resources for the

80 www. bus- ex. com November 09 overall benefit of the racing industry in its drive to gain a share of the gaming rand. Together they have formed Phumelela Gold Enterprises which recently contracted with Dragonfish- the B2B division of online gambling and software group 888. com- for the supply of an online sportsbook which will be shortly followed by the debut of internet casino, poker, bingo and quickplay games. " The one regret," admits Hawkins, " is that punters no longer go to the track in the same numbers as before. Each year we host two of the country's major horse races- the Vodacom Durban July at Greyville in Durban and the J& B Met, held in January in the Western Cape. At these events we'll still get attendances of 50,000 but week in and week out, races are being run in front of empty stands." This is not a situation unique to South Africa. Some years ago, British racecourses experienced the same problem which for them was even more acute, as tracks in the UK are privately owned and gate proceeds are the major source of revenue. However, that trend has been arrested in the UK and Hawkins has high hopes that Gold Circle can pull off something similar. " We are committed to providing the highest quality facilities," he says, " in order to attract owners and trainers to our courses. It follows that if we are investing funds in this way, we want to