The possible merger of the Australian Jockey Club (AJC) and the Sydney Turf Club (STC) will be debated by the individual bodies following the release of a report recommending a merger to form one "super club".The report by Ernst & Young, which was commissioned by Racing NSW at the request of the Racing Minister Kevin Greene, said there would be an immediate $21 million benefit.It also said there was an "overcapacity" of racetracks in the Sydney metropolitan region costing the industry $24 millio

The possible merger of the Australian Jockey Club (AJC) and the Sydney Turf Club (STC) will be debated by the individual bodies following the release of a report recommending a merger to form one "super club".

The report by Ernst & Young, which was commissioned by Racing NSW at the request of the Racing Minister Kevin Greene, said there would be an immediate $21 million benefit.

It also said there was an "overcapacity" of racetracks in the Sydney metropolitan region costing the industry $24 million per year and raised the possible sale of the STC-owned Canterbury while investing in upgrading Randwick and Rosehill.

Ernst & Young partner Geoff Stalley said the investigation had shown a compelling case for a merger and asset utilisation.

"The industry is facing ongoing pressures and the situation is difficult to arrest without intervention," Stalley said.

The report said an example of how the $21 million saving could be used was to double minimum Saturday prizemoney to $140,000 per race.

The report also recommended the merger of the provincial Gosford and Wyong clubs and the sale of one or both tracks to create one entity on the NSW Central Coast.

"There are minimal benefits in a merger without the sale of one or both clubs," Stalley said.

Greene said he encouraged debate with the clubs and added the industry had to ensure its place in the competition for the wagering dollar.

"With the worsening economic times and increasing competition for the wagering dollar, it is vital that we examine all options to ensure a strong future for NSW's racing industry," Greene said.

"I am interested in promoting a debate based on fact, not emotion, to ensure we are exploring all avenues to deliver a strong future for racing.

"If racing isn't sustainable, the jobs of up to 50,000 people are at risk."

Newly-elected AJC chairman Ron Finemore said any decision on the future of his club would be made by its members.

"It needs to be a member decision," he said.

"We have only just received the report ourselves and we will go through it in detail with the STC and come back with a submission.

"There is a lot of work to do.

"We will give the report due recognition as we look to the future.

"What we come up with may be a derivative of what we have here today."

STC chairman Bill Picken agreed the matter had to be put to the members of his club.

Around 1,400 people are members of both clubs from a total of 14,000.

The AJC has undergone major changes in the past few months with the resignation of chief executive Norman Gillespie and senior executive Richard Freedman and a forced election of a new board of directors.

The cash-strapped STC recently announced cost cutting measures including putting staff on 19-day months and the possibility of it maybe having to reduce Saturday prizemoney in the new season.

Racing NSW is currently fighting a battle with the corporate bookmakers over the payment of rights fees.

Betting exchange Betfair and corporate bookmaker Sportsbet will challenge the Race Fields legislation in court in November.

Racing NSW chief executive Peter V'Landys said if the administrative body was successful, payment of the fees by corporate bookmakers and exchanges would result in an additional $30 million a year to the industry.