Presentation to the Gambling Review Commission Portfolio Committee November 2011

1. Presentation to the Gambling Review Commission Portfolio Committee November 2011

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

4. Thoroughbred RACING • A substantial global business • 63 countries • 230,000 thoroughbreds worldwide • 150,000 races run • More than 1million 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

5. Thoroughbred BREEDING • A global commodity : • 182,000 broodmares • Approx 10,000 stallions • Approx 100,000 foals born annually • Auction Sales in USA gross $1.1 billon • Global sales estimated at $2billion • South Africa approx $35m (1.5% of global)

6. South Africa’s proud position • 10th largest breeding nation in the world • 11th 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.

7. 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

8. Success story : SA bred JAY PEG wins US$5m Group 1 Championship in Dubai in 2008. As a result, over R80 million at the next National Yearling Sale in 2008 was spent by foreign buyers. Bred in Hermanus, Jay Peg was sold for R140,000 as a yearling and won over R40m racing internationally.

9. 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.

10. 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 dtiCIS programme. • Structured capacity building mentorship programme in place in partnership with CATHSSETA.

11. Co-op yearling at CPYS 2011

12. Challenges to Transformation • EXPORT RESTRICTIONS. • Decline of domestic owners.

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

14. An industry in decline • Graphs • Reduction in no of breeders • Reduction in no of stallions • Reduction in no of mares • Consequent reduction in labour

15. No of registered breeders 1986-2010

16. No. of Stallions 1986-2010

17. No of broodmares 1986-2010

18. Gross Auction Revenues 2000-2011

19. Barrier to growth of domestic market • Declining Purses • R580m net loss by owners annually • (excluding capital cost of horse)

20. 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.

21. 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.

22. Q & A