A synthetic training track and 300 new stables will be built at Cessnock Racecourse as part of an $11.5 million upgrade.
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The NSW Government has provided the funding as part of its $67 million investment in regional racing.
Racing NSW chairman Russell Balding said the racing industry is very grateful for the government's investment in regional racing.
"This (funding) announcement will not only ensure the ongoing sustainability of racing in the Cessnock region, but importantly it will allow local trainers to compete with provincial and city-based trainers on an equal footing in respect of access to modern training infrastructure and facilities and allow country horses to be more competitive," he said.
Parliamentary Secretary for the Hunter Taylor Martin said Cessnock will have some of the best training facilities in Australia.
"There will be significant flow-on effects of these upgrades for Cessnock as people flock to town for the races, staying in local hotels, eating at local cafes, and shopping locally," he said.
"This is the single largest investment by the NSW Government in racing infrastructure and it is great to have secured such a significant investment for Cessnock."
Racing ceased at Cessnock last year after the sale to Racing NSW. CEO Peter V'landys said at the time there would be no more racing at Cessnock "at this stage", but community race meetings may return in the future.