There was some good news and some bad for the sport of horse-racing in India in the New Year’s first week. The most rejoicing one for the lovers of this sport was the Bangalore Turf Club (BTC) finally receiving the much-awaited license to conduct racing from the Karnataka state government. The BTC authorities did well in keeping the prospectus of the truncated season ready and ensured that the action-starved racing public didn’t have to wait immediately.

Better late than never, the resumption of horse-racing and the inter-venue betting operations at in Bengaluru will not only ease the cash crunch faced by BTC but will also boost the other turf clubs’ income.

After playing cat and mouse with the BTC and peddling its intent of protecting the racing public’s interest when informing the High Court why BTC’s racing license was held back, the state government appointed a monitoring committee whose composition has raised many an eyebrow.

It’s early days though and only time will tell how effective this monitoring committee will be in the conduct of clean and fair racing.

Status quo

Ironically, and sadly too, on the very day which this column expressed hope that a favourable Goods & Service Tax (GST) regime could prove to be a saviour for the Royal Western India Turf Club (RWITC), the Union Ministry of Finance issued a clarification to clear the ambiguity surrounding the levy of GST on betting on horse racing. In its communication last Thursday, the ministry has asserted that “GST would be leviable on the entire the bet value i.e. total of face of any or all bets paid into the totalisator or placed with the licensed book makers, as the case may be.”

While the Turf Authorities of India (TAI) will be quite disappointed that the guessing game is over and though the 28 percent GST slab is more or less equivalent to the state betting tax levied earlier, it doesn’t harm the RWITC, Royal Calcutta Turf Club (RCTC) and Madras Race Club (MRC) as badly as it’s going hurt the betting income of Hyderabad Race Club (HRC), Mysore Race Club (MyRC) and BTC. Speaking specifically about RWITC, the GST clarification will have a devastating effect on its fortunes.

Faulty comparison

The last resort left for the TAI members now is to challenge the levy of GST on the “entire bet” on the totalisator as, unlike the licensed bookmakers’ business of accepting bets to either for profit or a loss, the turf clubs essentially plays the role of a facilitator and not a book maker. Thus they earn a certain percentage as commission on the total amount collected on each individual pool and the rest is distributed as dividend to the winners.

Easy as it may sound but it will take a lot of convincing on this aspect to get the GST council to breathe life into this failing sport failing which TAI may seek legal recourse.

Earlier, when GST rates were announced, TAI members were exploring the prospects of introducing unified tote betting on an all-India basis; it remains to be seen whether this idea is still relevant.

Similarly, all eyes will be on RWITC’s management to see how it mitigates the financial distress caused by the GST’s clarification.

Courtesy Mumbai Mirror