Failed legal battle to retain independence costs cash-strapped ATC $4.1m

Craig Kerry

November 6, 2026 — 4:16pm

The merits of the Australian Turf Club board’s failed battle to retain its independence can now be weighed against a $4.1 million cost after the release of the cash-strapped organisation’s annual report.

The ATC, which operates Sydney’s four metropolitan thoroughbred racetracks and owns all of them except Royal Randwick, lost $4.8 million in the 2025-26 financial year, up from $2.6 million in 2024-25.

However, the deficit for last year would have been about $700,000 if not for the board’s legal costs from its fight to prevent regulator Racing NSW appointing an administrator over concerns about the club’s financial position, which included a $30 million bank loan, and corporate governance.

That battle started when Racing NSW issued a show cause notice in September last year, following the sacking of ATC chief executive Matt Galanos and resignation of directors Ben Bayot and Natalie Hewson, and ended in June when the regulator won a NSW Supreme Court appeal to appoint Morgan Kelly as administrator.

The ruling included an order for the ATC to pay the legal costs of Racing NSW, which this week reported an operating surplus of $13.63 million in 2025-26, up from $12.96 million the previous year.

Kelly’s review of the ATC started as a consultant in April, under an agreement with Racing NSW to resume its additional funding of the club, and he took over as administrator on July 8, effectively replacing the board. Chairman Tim Hale, vice-chair Caroline Searcy and newest board addition Bernie Brookes became part of advisory subcommittee with Racing NSW directors Simon Tuxen and Michael Crismale.

Kelly noted in the annual report that the club’s revenue of $379 million was up on 2024-25’s $373.4
million and losses were down without the one-off legal costs, but there was work to do.

“While the club’s underlying assets and operations remain strong, the continued loss-making performance highlights the need to strengthen financial and commercial discipline across the organisation,” Kelly wrote.

“Our review to date has identified opportunities to enhance commercial performance, improve operational efficiency and strengthen governance. In a number of areas, costs have increased over time and opportunities to maximise revenue have not been fully realised.”

Sources who spoke on the condition of anonymity have told this masthead the operational efficiencies have not included forced job cuts, but the club has reduced its staff slightly through natural attrition, although roles attached to horse welfare or safety have been untouched.

An ongoing court case regarding alleged thefts of cash from raceday safes has not impacted the club, which is insured for those losses.

A positive for the club in this year’s report was the absence of an auditor’s notice of concern, present in the previous year’s report, over the ATC’s financial viability.

Members will have the chance to address the club’s situation at the annual general meeting at Royal Randwick on November 26.

The ATC board initially succeeded in blocking Racing NSW’s move to appoint Kelly in December before winning again in March when NSW Supreme Court Justice Francois Kunc ruled that the regulator’s move was not authorised under the Thoroughbred Racing Act. However, Racing NSW’s appeal was upheld when the panel found the club’s finances and corporate governance were within the definition of horse racing under the Act.

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