MR. R. SURENDER REDDY

In a tete-a-tete with Racing World, the Chairman with the Midas touch talks about the huge profits made by the Hyderabad racing club and his future plans to keep the ball rolling

One of the hot topics of discussion among administrators of race clubs in our country is of the Hyderabad Race Club which has registered a huge profit recently. For most industrialists and even big retail businessmen, terming a Rs. 8-crore profit as huge may seem a little childish, but ask any of the five independent turf authorities in the country and the reaction that you are likely to get is one of disbelief. For, a profit of Rs. 8 crores is a sort of a record, particularly when a majority of the clubs in the country are experiencing a downward trend in their returns to the scale.

Why industrialists? Even some of us who have been to racecourses and have a fair bit of knowledge as to how the sport runs, may find it difficult to digest that race clubs are happy to make as little a profit as Rs. 8 crore and still rejoice. After all, horse-racing does seem like a huge industry for us, what with the existence of several hundred stud farms breeding thousands of thoroughbreds each year; hundreds of people willing to invest crores to buy them, and thousands of rece-goers ready to wager their money on the performance of these horses at the racing centres.

As for what a layman would think, less said the better. For him, horse-racing is all about money, where, he imagines, crores of rupees come into the betting market and a major portion of it ends up with the race clubs, as his opinion is often clouded by the notion that there are only losers and no winners among the betting fraternity.

But the fact is, race clubs in this country are left with very little after paying huge amounts to the government in the shape of taxes and licenses to operate; they distribute huge chunks of its revenue as stake money to owners; spend similar amounts as operational costs and plough back another big sum into the sport enjoys very little patronage from the industry in terms of sponsorship. Now, perhaps, we’ll understand why the little profit that the Hyderabad Race Club has made appears huge to other turf authorities.

In a chat with Racing World, the Chairman of the Hyderabad Race Club, Mr. R. Surender Reddy, shared how it was possible for the club to achieve this under his stewardship.

The primary reason is that we have brought down our expenditure drastically over the years. While some of it can be attributed to the technological advancements we have made in the recent past, most of it has been achieved with the conscious efforts to cut out all wasteful expenditure. The productivity of our employees has also increased manifold in the last one year, as much because of streamlining the working of our totalisator system, as due to the attitude of the employees themselves who seems to have realized that the benefits of a healthy organization would percolate down to them.

The daily turnover has increased phenomenally after we opened off-course centres in the districts in addition to the ones we have in the twin-cities of Hyderabad and Secunderabad. While that has ensured that not many of our patrons go without being serviced, the efficiency of the BT (Betting Totalisator) operators also increased due to our constant encouragement to quicken the sales and reach out to more patrons. While 55 percent of our totalisator collections come from off-course centres, the remaining comes from the racecourse counters. This has resulted in our takings going up from Rs. 250 crores last year to Rs. 300 crores this year.

It is quite possible that our professionalism in regard to all aspects of racing is going down well with the general public, but more importantly we are happy that we are performing to the satisfaction of the existing racing fraternity. The owners are quite happy that more than Rs. 13 crores is being distributed among them as winnings. I am sure this works out as the highest stakes money earned by a single owner in this country, because the number of horses and therefore the number of owners in our centre is small; what with the figure of race-worthy horses at any given time at Malakpet being just about 450.

Good return on investment is perhaps what is encouraging them to invest in better bloodlines and also in attracting newer and smaller owners to the sport. This helps raise the standard of racing, overall.

Of course, we could have done far better had there been a way to control illegal betting. This is beyond anybody’s control, as much as you can’t stop people from betting. But one way we could have still fared better was if the tax on betting in our state had been comparable to what it is in neighbouring Karnataka.

A lot of money from our state goes to the Bangalore Turf Club because of the low tax (4 percent) there compared to 10 percent in Andhra Pradesh. It is not just the numbers of a club that get boosted because of a low tax structure, it goes far beyond these calculations. For instance, it helps the economy of the state grow, and creates livelihood for a great many people of the state as it opens up employment opportunities.

We have made several appeals and told them that lower taxes would greatly increase the club collections and thereby our contribution to the state exchequer too. We are ready to give them a guarantee on this point, but apart from giving us assurances that they will look into it, nothing has happened so far. It’s time our government learnt some lessons from communist China which is doing everything to promote racing in a big way.

Here too, governments are acting like villains. While on the one had they net huge revenue from tax on tobacco and spirits, they prevent others, including sports bodies, from benefiting from cigarette and liquor companies, by banning them from advertising.

After all, sponsorship is business. Unless they get proper mileage for their investment, they will not come forward to invest. The little sponsorship that there is in horse racing is from those connected with the sport, like Dr. Vijay Mallya, Dr. M. A. M. Ramaswamy, Deepak Khaitan, the Poonawalla Group and several other stud farms.

Yes, Dr. Vijay Mallya Used to sponsor some of our events too, but has stopped doing that although our state gives his liquor companies the most revenue. We will certainly broach this subject with him.

We are planning to elicit the support of Doordarshan. There is a proposal to have the national broadcaster cover our events at a charge. We are negotiating with them right now and we hope for fruition.