A week ago, the AJC issued a plaintive press release blaming corporate bookmakers and Betfair for the funding crisis which precipitated prizemoney cuts and mass sackings.

Backing up their complaint was Racing NSW CEO Peter V'Landys sagely suggesting "I told you so" when predicting just such a funding crisis as a result of court challenges to the level of race fields fees imposed by Racing NSW on corporate bookmakers.

An amount of $30 million was said to be in limbo pending resolution of the litigation, where Betfair on its own and Sportsbet, supported by much of the rest of the corporate bookmaking sector, had sued Racing NSW over alleged discrimination against interstate operators.

Well that story is now unravelling.

It turns out that the bulk of the $30 million is actually owed by TabCorp, who perhaps not surprisingly are objecting to paying another 1.5% on top of the 4.7% they already pay.

The reason that this objection has not become public is because resolution of such issues is supposed to be accomplished through a dispute settlement procedure within Racingcorp Pty Ltd, the company which represents the three racing codes in dealings with TabCorp.

Accurate figures are hard to obtain from public sources about how much is bet on each state's racing by various wagering operators. However information from the non-TAB sector suggests that no more than $10 million of the $30 million collected by Racing NSW has been paid by corporate bookmakers and Betfair.

Of the remaining $20 million, the bulk is payable by TabCorp because of betting by its New South Wales and Victorian operations on NSW races.

TabCorp is in a bind because Racing NSW expects it to pay 4.7% of bets it takes in New South Wales on interstate races, even though it also has to pay Victoria and the other states a race field levy.

By the end of the racing season this month, the amount collected from race field levies in New South Wales will be in excess of $40 million, with TabCorp disputing fully half of that amount.

That $20 million more or less is the predicted boost to the New South Wales racing industry from merging the AJC and the STC.

So instead of blaming the corporate bookmakers for the funding deficit requiring the merger, Racing NSW should have explained that it was its good friend and partner TabCorp which is responsible for much of the shortfall.

Given that TabCorp doesn't want to pay and neither do the corporates, the ever increasing pool of funds that the industry is hanging its hat on is largely illusory.

Right from the start, Racing NSW's inability to pay out any of the money has been mostly because TabCorp is disputing its liability. While its objection has been largely concealed from public gaze, the very public Federal Court cases brought against Racing NSW by Sportsbet and Betfair have provided a convenient excuse for not paying the funds out.

But only a quarter of the total race fields levy collected comes from the corporate bookmakers.

Caught in a lie of its own making, Racing NSW's only salvation is to somehow get TabCorp to pay a big enough sum quickly enough to save the industry from even deeper funding cuts.

Both Betfair and Sportsbet are happy to let Racing NSW twist in the wind while it loses in the Federal Court, knowing that they will get all of their race fields money back plus costs. The rest of the corporates, backing Sportsbet's case, likewise.

In fact, given the antipathy between them and Racing NSW they will take great glee in taking their case to judgement. There is no requirement whatsoever for them to settle out of court.

On the other hand, Racing NSW has to bet that it can keep accruing $3.5 million a month in race field fees in its bank account, knowing that it dare not touch them because the bulk of it will have to be returned to TabCorp and the corporates.

One wonders how long they can keep playing that game?

One also wonders how likely is a merger of the AJC and STC once their members realise how they are being stitched up.