His nickname “Bling” might suggest frippery and shallowness, but two-time champion jockey S’Manga Khumalo is a highly intelligent and articulate young man. Anyone who’s heard him speak knows that.
It is also clear from an open letter he wrote this week, warning of a new threat to the battered horse racing industry in South Africa.
Khumalo’s letter, first published on the IOL website, makes a strong argument against planned legislation by the KwaZulu-Natal provincial government.
The Gaming and Betting Tax Amendment Bill aims to cut provincial racing operator Gold Circle’s 3% share of betting proceeds to 1.6%. The remaining 1.4% is earmarked for a yet-to-be-established “Transformation Fund”, which will purportedly advance racial transformation of racing.
That little sentence has red flags fluttering and eyeballs rolling. Millions of rands put into the hands of political appointees with a vague mandate? Say no more.
Bling is very polite about this gross cash-grab, calling it a “well-intentioned yet ill-conceived” measure. Of course, he has to be diplomatic if he is to persuade the KZN legislature to drop the idea before it sends a wrecking ball through the game in province.
The ace continues: “This would be a wonderful suggestion but for one snag: transformation is already being done by the best-placed stakeholder, and this proposal would undermine that work.”
Khumalo himself is a shining example of the work being done.
“As a youngster growing up in KwaMashu, KwaZulu-Natal, I never would have dreamed that I would someday be two-time winner of Africa’s greatest horseracing event – the Hollywoodbets Durban July and two-time South African champion jockey,” he writes, adding, “horse racing has been a door into a life I could not have imagined. I can only hope this same door will lead many young, black people to even greater success than mine.”
But the door might soon be shut.
“I was first spotted by a talent scout, not at an expensive private school, but at Mzuvele Secondary School. The man was looking for potential jockeys, and my small frame … finally worked in my favour. At just 14 or 15, I didn’t have any plans, but when this opportunity came, I took it with both hands and haven’t looked back since.”
Khumalo goes on to describe his five-year apprenticeship and encouragement he got along his journey.
“There were only a few black guys then; there are many more today. A new generation of black professional jockeys are coming up behind me…
“Gold Circle is a huge financial supporter of the SA Jockey Academy and of many other stakeholders in the industry in KZN. It uses the funding it receives from the tax on winning punters’ bets to support all these stakeholders in the industry, including rural racing. Go to any track and see the number of black racegoers, jockeys, grooms, employees and small business owners.
“This is where transformation and development are actually happening… I am living proof of the fact that the industry is capable of, and is, transforming by itself… What will a Transformation Fund do that Gold Circle isn’t, and what additional value will such a fund bring to this effort?
“If it fails to enhance transformation, the loss to the province will be great… And if all this leads to the collapse of racing in KZN, we may never see another child from KwaMashu rise in this industry again; nor from Umlazi, Ntuzuma or any of the province’s rural communities. This isn’t hyperbole; a similar proposal in Gauteng saw that province’s racecourse operator enter business rescue within a year of its implementation. On this issue, the stakes are high with very limited upside, if any. Any gambler will tell you that this isn’t a bet we should take.”
A logical and compelling argument; but when has an ANC politician listened to common sense?
Gold Circle is forecasting a loss of R106-million for the 2021/2022 financial year even after receiving the R66-million betting tax contribution (the aforementioned 3% of betting takeoff). Direct racing and events only generated R50-million in total revenue. Without the betting tax contribution, losses would be R172-million.
These figures come courtesy of Bill Lambert, veteran horse owner, racing official and former Msunduzi city councillor, who describes the diversion of funds as “an existential threat to the industry”.
Lambert says the proposal is difficult to understand as Gold Circle already reinvests all profits directly back into the industry by design – its memorandum of incorporation prohibits the distribution of profits.
To underline the foolishness of it all, Lambert adds, “Gold Circle is a tax-paying entity, but if the proposed reduction is effected, the province will lose an estimated R100-million a year in taxes. This is a textbook lose-lose scenario and a self-inflicted wound.”