The long standing, mutually beneficial and harmonious relationship between Bangalore Turf Club and Royal Western India Turf club has struck a discordant note with regard to the issue of Royalty and is headed for a crisis. The Bangalore Turf Club has proposed that betting centres should be allowed to retain the entire income accruing by way of inter venue betting in lieu of the existing arrangement of paying 23 per cent profit on the tote collections. The RWITC has not agreed to the BTC demand and talks have reached a stalemate.

BTC and RWITC had an arrangement by which racing dates were so adjusted so as not to clash with each other`s racing. Mumbai and Bangalore racing is very popular in the country and has the biggest following. The bone of contention has been the fall in revenue at Mumbai on tote due to which the royalty paid to Bangalore has steadily dwindled over the years where as RWITC`s take has gone up significantly. At present, BTC approximately pays about Rs 3.2 cores as royalty whereas RWITC pays just about Rs 80 lakhs.

The talks between the two clubs reached a dead end and it is possible that BTC may think in terms of cutting off signals resulting in Mumbai racing patrons missing out on summer season which is set to start on Saturday, May 18 through official channels. Outside betting channels take betting on these major centres irrespective of whether official relationship exists or not is a reality that both clubs have to recognise. It is indeed an unfortunate development in Indian racing which is already hit hard by service tax and income tax claims which is having a crippling effect on the growth of the sport and threatening to uproot it.

RWITC Chairman Khushroo Dhunjibhoy said that their club is in an unfortunate situation of having to pay 30 per cent tax on tote collections to the government where as it is 8 per cent in Bangalore. ``The fall of revenue is not our doing. We are in talks with the government and are hopeful of getting concession on this score in return to a guaranteed payment to the government. We are facing problems on several fronts including the issue of lease which is due for renewal. It is only a matter of time that we recover from these problems. We never demanded higher royalty from Bangalore to the one that we had accepted long ago and stuck to our commitment and we expect BTC to also honour its commitment.``

The RWITC Chairman said that the relationship between the clubs was mutually beneficial and should not be spoilt just because we are in a poor position vis-à-vis tote collection at the moment. ``Our stake money has been the lowest in the country and we are struggling. BTC should have a rethink on its demand. We have explained to BTC Committee our difficulties in the joint meeting that we had last month. I am in no position to take any decision right now as we have no racing and most of our committee members are abroad on a holiday. The BTC also should have valid reasons for this sudden aggressive posture especially since we are in the process of re-inventing ourselves through better exploitation of tote. Today we are in a poor position; tomorrow it could be their turn. It does not mean we should exploit each other during crisis times. BTC should show greater restraint as we are not lacking in our efforts to promote tote. At this point of time we cannot agree to change the existing pattern and we cannot concede anything within a time frame of a day or two,`` Mr Khushroo added.

The existing system of royalty has been in vogue since 1980 with minor modifications. The stall fee charged on bookmakers was excluded from the purview of royalty in 2002 and collections on tote became the main source for determining royalty as bookmakers` stall fee varies from centre to centre. The BTC has contended that host centres are not optimizing betting potential through better marketing and greater exploitation through various promotional methods and instead sought to rely on other income to run racing while receiving greater royalty from centres which have made sincere efforts to promote the product. Since the club`s cut and the tax levied by the government vary from centre to centre, BTC believes that there is no level playing field as certain categories of income including the one accruing from mobile phones which is associated with betting is not being considered for computation on the disputable ground that such revenue is not directly related to betting.

It is believed that BTC and Hyderabad Race Club are on the verge of agreeing to the new proposal of squaring off their respective incomes resulting from off course betting.

In the meanwhile, the BTC Managing Committee which is in a tearing hurry to force changes is also considering making access to live feed of its races on a payment basis. The BTC Committee, it seems, is no mood to relent from its aggressive stance. Mysore Race Club is expected to follow BTC on this issue.