Presentation to the Gambling Review Commission Portfolio CommitteeNovember 2011

Primary Mission~1. To safeguard and advance common aim of all thoroughbred breeders

2. To promote and encourage the genetic improvement of thoroughbred horses

Thoroughbred Breeders Associationof South Africa [Est 1921]

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

Thoroughbred RACING

A global commodity :182,000 broodmaresApprox 10,000 stallions Approx 100,000 foals born annuallyAuction Sales in USA gross $1.1 billonGlobal sales estimated at $2billionSouth Africa approx $35m (1.5% of global)

Thoroughbred BREEDING

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.

South Africa’s proud position

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

Positive Factors

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.

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.

Growth of Exports

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.

Transformation Grooms Co-ops

Co-op yearling at CPYS 2011

EXPORT RESTRICTIONS.

Decline of domestic owners.

Challenges to Transformation

Challenges :SA bred produce

DOMESTIC MARKET

EXPORT MARKET

Racehorse Ownersinfluenced by prize money (static / declining)

International prize money excellent, BUT, export market threatened by AHS bans.

Graphs Reduction in no of breeders Reduction in no of stallions Reduction in no of mares Consequent reduction in labour

An industry in decline

No of registered breeders 1986-2010

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0

200

400

600

800

1000

1200

1135

1088

1109

1084

1094

1089

1075

1060

1056

990

967

956

925

853

730

683

527

490

451

423

419 459

408

509

346

No Of BreedersLinear (No Of Breeders)

No. of Stallions 1986-2010

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0

50

100

150

200

250

300

350

400

376

296

329

335

288

277

277

265

231

230 2

52

213

181

170

171

142

120

128

111

103

102

105

105

106

107

No of StallionsLinear (No of Stallions)

No of broodmares 1986-20101986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

0

1000

2000

3000

4000

5000

6000

7000

8000

7169

6867

6577

6752 7

304

7410

7393

6129

5850

5641 6041

6041

5600

4703

4345

4562

4338

4403

4615

4230

3970 4

480

3941 4406

3583

No of MaresLinear (No of Mares)

Gross Auction Revenues 2000-2011

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

R 59,750,200 R 66,414,500

R 75,496,000 R 88,248,000

R 137,930,000

R 166,192,600

R 225,675,000

R 275,088,000

R 319,222,500

R 258,801,000 R 252,751,000

R 281,999,000

Declining Purses R580m net loss by owners annually (excluding capital cost of horse)

Barrier to growth of domestic market

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.

Export Restrictions

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.

The Future

Q & A