The news is not surprising because the race club was already facing consequences of the exorbitant level of 28 per cent GST imposed by the government on the betting turnover.
Mahalaxmi racecourse in Mumbai. Pic/Shadab Khan
The Royal Western India Turf Club (RWITC) is staring at a staggering loss of Rs 29.58 crore (unaudited) for the financial year which ended on March 31. The details of the dire financial situation were shared by the management with members of the club in a letter written on Friday, a copy of which is with mid-day.
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"All our revenue streams including racing, off course betting, bookmakers, banquets and restaurants that were just beginning to revive, have been forced to close again," the letter stated, and warned that the projections for the year 2021-22 are looking extremely bleak.
The news is not surprising because the race club was already facing consequences of the exorbitant level of 28 per cent GST imposed by the government on the betting turnover. The so-called "sin tax" stabbed at the heart of the club's main source of revenue, the commission it gets from the betting money which pays for everything from the stake money paid to horse owners, maintenance of the two racecourses in the state (Mumbai & Pune), and staff salaries.
In a desperate bid, the club had reduced the stake money and staff salaries by 50per cent, causing many horse owners to leave for Kolkata, Hyderabad and Bangalore which offered better purses.
The race club's problems compounded further when, due to the pandemic, another major source of income—from those lavish, royal style weddings, which were regularly held by the city's elite on the club's lawns—completely dried up, on account of the restrictions placed on the number of attendees.
"While the committee is determined to face these challenges by continuously looking to reduce costs and find new avenues of income, the financial damage inflicted to our club due to the pandemic may far exceed the cushioning these measures can provide," the letter further stated, however, it did not clarify what those new avenues of income would be, except promising the members that the managing committee will "reach out to them very shortly" with the future course of action.
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