AT THE core of the Queensland Racing Inquiry sits a $91 million fortune and a salivating, cash-strapped industry. The inquiry, which wound up its public hearing phase on Tuesday, is examining $91 million in deductions enjoyed by the gaming giant Tatts.

But that money belongs, according to the inquiry's Assisting Counsel James Bell, QC, in the hands of around 24,000 not-all-terribly-well-off Queenslanders who derive an often perilous livelihood from racing.

MICHAEL MADIGAN reports in THE COURIER-MAIL that the inquiry, which has played out over the past month on the seventh floor of the Brisbane Magistrates Court building, again sifted through a basket of dirty laundry thrown up by an industry subject to three inquiries in less than a decade.

After this latest $3 million interrogation, led by Bell, it's hard not to conclude that corporate governance inside the peak body, Racing Queensland Limited, has been, at best, shoddy.

From 2007 to the election of the LNP Government in March of 2010, RQL was pretty much running its own race. In a move unique to the Australian racing industry, the former Labor government had allowed RQL to be established not as a statutory authority but as a private company under the Corporations Act. While subject to the authority of the Racing Act 2002, it appears RQL was in reality largely quarantined from the day-to-day whims of a ministerial office.

With no pesky politicians peering directly over his shoulder, RQL chairman Bob Bentley (right) rationalised the racing industry, combining the three codes of trotting, greyhounds and horse racing. In the view of many industry insiders, including two ex-racing ministers, he did a good job.

However, during the inquiry Bell unearthed powerful evidence pointing to poor corporate governance inside RQL, including admissions from top executives that contracts for infrastructure projects did not always follow procurement protocols.

But, the key question on the lips of every trainer, strapper and owner from the Albion Park greyhound track to Cluden Park in Townsville (most of whom monitored this inquiry via live streaming) was, where's that $91 million?

That $91 million has its genesis in corporate financial complexities. It sprung to life in the early 2000s following the advent of the internet and the rise of the corporate book maker. These new-age bookies freely helped themselves to vital information such as race field information belonging to state racing bodies like RQL.

But in the mid-2000s State Governments started turning gamekeeper, creating "racefield legislation" to protect themselves from the poachers. By 2008 it was illegal for bookmakers to publish race field information unless they paid the racing bodies that produced it. Tatts had to cough up like everyone else.

Tatts, which owns UNiTAB, already had a prior arrangement with RQL relating to the use of race field information in which it shared revenues with an RQL company, Product Co. When Tatts was required to also pay fees to interstate control bodies, it deducted those amounts from the revenues shared with Product Co.

On November 18, 2008, the RQL received legal advice Tatts was not entitled to make those deductions but the arrangement remained (and remains) intact. It allegedly cost RQL up to $500,000 a month.

Meanwhile, regional Queensland tracks pleaded for a few thousand dollars for infrastructure such as a toilet under a grandstand.

On the first day of public hearings Bell, an expert in commercial law, offered the legal view of the inquiry itself: "It is proper to note that after careful deliberation the Commission considers the argument compelling that Tatts was not entitled, in law, to make those substantial deductions. Arguably then, Tatts has been permitted to deprive the Queensland racing industry of some $91,000,000 during the relevant period and more since.''

The focus of the inquiry would then be on why that advice was not followed.

From that launch pad Bell put it to Bentley, repeatedly, that the reason the deductions were allowed was because Bentley was not only RQL chairman, but a board member of Tatts.

Bentley was also close friend of Dick McIlwain, then chairman of Tatts, and also owns shares in Tatts.

Bentley steadfastly denied the allegations, explaining it was those very conflicts of interests which ensured he left others inside RQL to "sort it out.'' And Bentley was the only RQL director not to sit on the board of Product Co, which allowed the deductions.

To the racing industry, the $91 million means not merely new toilets under the grandstands, but better prize money, which in Queensland racing is comparatively low, sending many owners and trainer interstate to chase a reasonable return on massive outlays required to develop a champion, or even a third place getter.

In New South Wales you'll be assured of at least $15,000 if you win even at a remote country meeting, while in rural Queensland you'll get around $6000 which, after the sling to the jockey and travel expenses to the track, might pay for a counter lunch for the crew and horse feed for a month.

Tatts itself does appear willing to resolve the matter. In a surprise move this week, the company applied to the Queensland Supreme Court to determine an outcome regarding the deductions.

But the climax of this latest chapter in the long and colourful history of Queensland turf won't arrive until February 7 2014 when Commissioner Margaret White brings down her findings. Several people who have appeared before the inquiry have been warned "adverse findings" may be made against them.

Whether the matter then advances to the Australian Competition and Consumer Commission, the Department of Public Prosecutions or the Crime and Misconduct Commission will be a matter for Commissioner White and the State Government.

STORY SOURCE: THE COURIER-MAIL – NEWS LIMITED