The Mahalaxmi racecourse, dubbed the lung of South Mumbai, is gasping for survival. In a letter dated September 22, RWITC has asked its 9,300 members to donate Rs 5,000 each
Aerial view of the racecourse
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The Mahalaxmi racecourse, dubbed the lung of South Mumbai, is gasping for survival. In a letter to its member base dated September 22, the once cash-rich apex club for racing in Western India, cited losses of Rs 25 crore for the year ending March 31, 2016.
Zavaray Poonawalla and Vivek Jain
More alarmingly, the letter admits the club is looking at even more losses for the current financial year. The letter, signed by nine Royal Western India Turf Club (RWITC) committee members, also exhorts its 9,300 members to help the club by paying Rs 5,000 per annum towards infrastructure expenses.
The crowds at the Derby, the racecourse needs crowds like this on every racing day in the city, not just one day
Though the letter says this payment is “voluntary”, it nonetheless is a strong indication of the club’s extremely precarious financial condition.
“We incurred a loss of nearly Rs 25 crore for the year ending March 31, 2016, perhaps the highest in our history,” said the letter, a copy of which is with mid-day. “The projections for the year 2016-2017 appear equally bleak with several contingent liabilities.”
The horses set off as the gates slam open
Cost cutting
The letter warns of impending cost-cutting and revenue-raising measures, while reminding members that the RWITC is “heavily regulated by disproportionate taxes, a host of levies and an expired lease.”
A proposed government move may end up increasing the rent manifold should the racecourse decide to renew its lease.
The letter said committee members have decided to contribute Rs 10,000 each or more. Adding that it will take a “collective effort to support the club in this time of crisis,” the letter asked members to pay R5,000 each towards maintenance charge of club infrastructure, in an “earnest and sincere” request for “voluntary contributions.”
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The development comes at a time when the very existence of the club is in question. While there has been considerable trepidation — most of it justified — of the 226-acre open space being ‘usurped’ by a slew of politicians and builders, it has now turned out that the danger lies within.
Perennial target
For years now, this club, helmed by some of India’s most successful businessmen, has kept land sharks and politicians at bay. Using their tremendous clout, political lobbying and ability to garner activists, they have acted as worthy custodians of this prime 226-acre property.
Ten years ago, builder Pegasus Clubs and Resorts had wanted to develop the plot commercially, with a golf course, convention centre and restaurants, which was rebuffed.
A few months later, a backdoor attempt was made under the guise of slum rehabilitation. A number of people live near the racecourse’s defunct third enclosure, in homes that have been there for more than five decades.
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Sporadically, there have been calls from different politicians to convert the place into a giant underground parking lot, an aquarium, a commercial centre with a tall tower and, more recently, a theme park. The Shiv Sena still supports the last idea.
Helping hand
mid-day had reported in its evening edition of September 28 that former chairman of the Royal Western India Turf Club (RWITC) and billionaire Zavaray Poonawalla (73) has offered the state government Rs 50 crore from his personal wealth to persuade it to reduce racing betting tax in Western India (Pune and Mumbai) from 20 per cent — the highest in the country — to 5 per cent.
Poonawalla had told mid-day his offer was an attempt to save the RWITC, “from a probable situation of sinking”.
Taxing issue
Along with a betting tax of 20 per cent, punters in Mumbai and Pune have to pay an additional 10 per cent fee towards the club’s expenditure. Simply put, from a Rs 100 bet, Rs 30 is deducted and the winner gets to keep Rs 70.
“The dividend is comparatively very low,” said Zavaray. “People tend to use illegal means of betting due to which the club loses revenue.”
Zavaray felt that if the betting tax is reduced to 5 per cent, collections will go up. “It needs to go up multi-fold to cover the government revenue of R18 crore a year. This will not happen in a year.”
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