Government delivers knockout punch on BTC
The Bangalore Turf Club which is battling for its survival with the eviction threat looming large and the matter pending adjudication in Supreme Court, suffered a huge body blow on Thursday when the government proposed to increase the turnover tax on tote from the existing four to eight present which is bound to have a huge impact on its revenues. The Mysore Race Club has escaped the blow, with the turnover tax maintained at the existing rate of four per cent.
The increase is bound to paralyze the totalisator pools, already affected due to 10 per cent tax deduction. The government take was four per cent. Now with the increase, the turf club has to increase its cut from the collection by at least another two to three per cent which is sure to cripple the system and drive the punters to illegal channels where a punter can back without paying any tax. Reduced dividends become unattractive for punters to back on club operated totes. In the short run, the government will get higher revenue though in the long run it evens out. The Bangalore Turf Club is the only turf club in the country which survives by extracting revenue through its core activity which is conduct of racing and generating revenue through betting unlike other turf clubs in the country like RWITC which survives on the income generated by non-racing activity like renting out its premises and fee charged on use of mobile phone in its premises during racing.
The current annual turnover of Bangalore Turf Club through its totalisator pools is about Rs 1200 crores and as per initial estimates, it is expected to fall by about 200 crores as the dividends are sure to reduce to increase in tax. The money which is used to flow from other states will see a decrease. The club was operating on six per cent commission but with the increase, the club will have to reduce its intake by at least two per cent to prevent a body blow to its revenue collections. If BTC reduces its commission by two per cent, then the club may be able to survive but the reduced revenue will have impact the stake money paid out in a big way. Bangalore Turf Club used to pay highest stake money for its individual races but now at this rate, the stake money may have to be frozen at the existing level for a long time to come thereby adversely affecting small owners who now face extinction. As it is, owing hoses is not economically viable due to low stakes and the club, instead of increasing the stake, may now look at ways and means to cut the stake which makes it even more difficult to even maintain the horses, leave alone recovering the cost of investment on horses.
The Mysore Race Club has done well to extract concession from the government. Obviously its lobbying has worked. But Bangalore Turf Club, beset as it is with egoistic committee, hell bent on riding on their egos and doing precious little for the sport, has failed to lobby with the government. The Committee Members, busy as they are with their personal agenda, did not do anything to impress on the Chief Minister the need to maintain the turnover tax at the existing level.
What is more galling is that ;the increase in the budget proposal made by the Chief Minister Yeddyurapa who also holds the portfolio of finance was on the anvil but there was no discernible effort on the club to handle the threat of increase in turnover tax. The committee and the club members are right now busy in getting their own kith and kin as members of the club. Such a scenario is only to be expected when the majority of members don’t have any stake in the sport.
The increase is bound to paralyze the totalisator pools, already affected due to 10 per cent tax deduction. The government take was four per cent. Now with the increase, the turf club has to increase its cut from the collection by at least another two to three per cent which is sure to cripple the system and drive the punters to illegal channels where a punter can back without paying any tax. Reduced dividends become unattractive for punters to back on club operated totes. In the short run, the government will get higher revenue though in the long run it evens out. The Bangalore Turf Club is the only turf club in the country which survives by extracting revenue through its core activity which is conduct of racing and generating revenue through betting unlike other turf clubs in the country like RWITC which survives on the income generated by non-racing activity like renting out its premises and fee charged on use of mobile phone in its premises during racing.
The current annual turnover of Bangalore Turf Club through its totalisator pools is about Rs 1200 crores and as per initial estimates, it is expected to fall by about 200 crores as the dividends are sure to reduce to increase in tax. The money which is used to flow from other states will see a decrease. The club was operating on six per cent commission but with the increase, the club will have to reduce its intake by at least two per cent to prevent a body blow to its revenue collections. If BTC reduces its commission by two per cent, then the club may be able to survive but the reduced revenue will have impact the stake money paid out in a big way. Bangalore Turf Club used to pay highest stake money for its individual races but now at this rate, the stake money may have to be frozen at the existing level for a long time to come thereby adversely affecting small owners who now face extinction. As it is, owing hoses is not economically viable due to low stakes and the club, instead of increasing the stake, may now look at ways and means to cut the stake which makes it even more difficult to even maintain the horses, leave alone recovering the cost of investment on horses.
The Mysore Race Club has done well to extract concession from the government. Obviously its lobbying has worked. But Bangalore Turf Club, beset as it is with egoistic committee, hell bent on riding on their egos and doing precious little for the sport, has failed to lobby with the government. The Committee Members, busy as they are with their personal agenda, did not do anything to impress on the Chief Minister the need to maintain the turnover tax at the existing level.
What is more galling is that ;the increase in the budget proposal made by the Chief Minister Yeddyurapa who also holds the portfolio of finance was on the anvil but there was no discernible effort on the club to handle the threat of increase in turnover tax. The committee and the club members are right now busy in getting their own kith and kin as members of the club. Such a scenario is only to be expected when the majority of members don’t have any stake in the sport.
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