Month: November 2019

In the UK the Owners and Breeders have pooled resources to produce this high-quality monthly magazine. Why couldn’t it happen here in NZ?

by Brian de Lore
Published 29 November 2019

The headline isn’t true, but such a merger which in principle is supported by NZTR, could give stakeholders much more grunt and a stronger voice in the future running of the thoroughbred industry.

In an industry that has contracted significantly over a long time, why would these sub-stakeholder groups not want to cut their cloth accordingly by standardising and combining the memberships and running a leaner and more efficient administration from a single base?

Speaking from his Petone office this week, NZTR CEO Bernard Saundry said there had been discussion in the past on the merging of stakeholder groups and that NZTR was not opposed to the concept.

We are living in a world of rapidly changing times that’s becoming increasingly globalised and in which amalgamations and scale of operation are the keywords and phrases for long-term survival. The common denominator for these three groups is prizemoney – the single component that would provide an incentive for members of all three associations.

After all, how many racing people crossover to two or even all three associations. Plenty of trainers, of which there are 800 members in New Zealand, are involved in both breeding and racehorse ownership. Many of our breeders also have thoroughbreds in training, and on their own, the Owners’ Association may have a less active voice but in principle should be the most influential body of the three, given the cost of running racing falls back on all owners as a collective. Racing Minister Winston Peters also acknowledges that owners are the most critical group in racing.

Membership of the Trainers’ Asociation comes each year with the renewal of the license to train, and the 800-odd members are more-or-less equally divided between A, B, and C Class licenses. The Breeders’ and Owners’ Associations memberships are, however, voluntary and that’s where changes need to occur through NZTR.

Thirty plus years ago the membership of the Breeders’ was as high as 5,000, according to CEO Justine Sclater. By 2007 it had dropped to 2,250 and today it’s only 1,289, although active promotion has increased it over the last 12 months with an annual cost of $195 which is a sub not altered in five years.

Just as ownership has evolved from single owners and small partnership teams of owners to big syndicates, the breeding industry has transformed over the years – but in the opposite direction. In the final year at Trentham in 1987, the catalogue offered 480 yearlings from 150 individual vendors. In 2019 at Karaka the Book One sale catalogued almost 700 yearlings provided by just 50 vendors. The trend towards fewer vendors results in more efficient marketing and preparation by the bigger studs plus the loss of smaller breeders who have gone from the game.

The Owners’ Association through President Bernard Hickey is actively driving membership and currently has between 900 and 1,000 members who pay only $60 each annually or $65 for dual husband-wife membership at the same address.

The Owners’ Association produces six bulletins per year which are subsidised by NZTR. But like the trainers and breeders, the income derived from membership is limited by scale and limited in achieving meaningful benefits.

In the Size and Scope Report released 18 months ago by NZRB in May, 2018, New Zealand had 3,705 thoroughbred breeders and 15,951 owners, so the potential exists for substantially increased membership for both associations through compulsory membership which would require a rule change at NZTR.

For the breeders, membership could potentially be calculated on a per mares basis – over 6,000 mares currently reside in New Zealand. If that method isn’t fair on larger breeders then a standard fee for any breeder with five or more mares or perhaps several tiered levels – collected by NZTR with broodmare returns. For owners, a compulsory membership for any single owner with five percent or more of any registered racehorse would be possible.

Idealistic? Yes, it is. How likely is it to happen? No chance at all; it would require a level of cooperation never previously known in our administrative history.

In the UK, the Thoroughbred Owner-Breeder is published monthly as a joint-venture between the Racehorse Owners’ Association (ROA) and the Thoroughbred Breeders’ Association. It goes out to 8,000 subscribers with an annual sub of 55 pounds and is said to have an average readership of 20,000

It’s an outstanding publication full of interesting articles and vital facts on racing and breeding; a high-quality publication in the mold of the once-prized British Racehorse and Pacemaker Magazines.

The benefits available to the UK Thoroughbred Breeders’ Association membership are substantial including a whole range of services – employer support, tax and legal hotlines, buying group discounts, guidance documents, events, regional days, training courses, seminars and race badge offers.

Racehorse Owners in the UK also get a great deal with all sorts of offerings including privileges at many of the courses, special lunches, behind the scene tours, car parking, and discounts, as well as offering dedicated facilities for syndicates.

Digital is fine, but who wouldn’t prefer a high-quality publication in their hands. Communication is everything in the horse business, and since the demise of The Informant in March and no replacement until Raceform makes its debut, the eight-month void has definitely cost the TAB a lot of turnover and lost some participants permanently.

Raceform is scheduled to go on sale for the first time on Thursday next week, replacing Best Bets which published its final issue yesterday.

by Brian de Lore
Published 22 November 2019

The New Zealand Thoroughbred Breeders’ Association will today, Friday November 22^nd, host former Chair of both Racing NSW and Racing Australia John Messara AM at a luncheon in Cambridge where he will be the guest speaker.

NZTBA invited its members to hear Messara speak publicly for the first time in New Zealand since he completed his ‘Review of the New Zealand Racing Industry’ and presented the 82-page document to Minister Peters on 31 July 2018.

Ninety to 100 guests are expected to attend the luncheon at The Boatshed on Lake Karapiro where well-known auctioneer Steve Davis will MC the event, which includes a question and answer session following the Messara address.

For anyone not attending but interested in the topics of discussion, I consulted with John Messara to piece together the question and answer segment that follows. The idea came after reading the high-quality UK publication ‘Thoroughbred Owner Breeder,’ which in its October issue featured a ‘Talking to…’ article on English trainer Charlie Fellows.

In that article a chord struck when he answered one question with: “I wish everyone would sing from the same hymn sheet though I don’t think it will ever happen. As long as we keep fighting from our own corners the money will be divided between more and more interests. If we worked together it would be so much more beneficial…working together for the greater good.”

That statement is probably pertinent to every racing jurisdiction in the world and is one that Messara touches on in one response below.

The Charlie Fellows interview conducted by Tim Richards was so informative and well-formatted I have unashamedly borrowed the format and the Close-Up and Personal and Close-Up and Professional questionnaire at the tail of the interview:

Talking to John Messara:

From all the experience you have gained over 40 years in racing and breeding, how do you view racing and breeding today on a global basis compared to where we have been in the past?

We are in a challenging era in racing, compared to the past. The level of competition from other forms of gambling and leisure is intense, and there has been a definite evolution in community standards, all of which require adjustment for an industry that has generally resisted change. These challenges are especially in evidence in the younger demographic that all racing stakeholders are desperate to attract.

What was the single most important lesson you learned through all your years as a racing administrator?

I learned that dynamic and committed leadership and a sound management team are critical to success – in the end, it all comes down to people.

Racing Minister Winston Peters asked you to write a review of New Zealand Racing which you accepted and completed in less than three months. What struck you as the most blatantly obvious problem with NZ?

It was obvious that the returns to owners had got too low, that the industry was capital hungry, incapable of modernising itself, and struggling to offer an attractive wagering product; all these factors were driving the industry down.

What was the motivation for you to take up the challenge, without being paid a fee for your work, and how much did it take out of you to complete it in such a quick time?

I took up the challenge because I have a soft spot for the NZ industry and have admired Kiwi horses and horsemen and women for decades. I have always felt that NZ was part of our racing family and that I might be able to help. In fact, it was a privilege to be able to assist.

I threw myself into the task and I was determined to deliver the Review by the agreed time. I was fortunate to pick a great team to assist me in their particular areas of competence, which included John Rouse (past CEO of the AJC and currently a Trustee of the ATC), Darrell Loewenthal (retired senior public servant from the NSW Department of Racing) and Craig Nugent (immediate past COO of Tabcorp). I was nevertheless tired by the end of it.

The initial advice you gave was to start with a blank sheet of paper. If we had done that, would we be better off than we are two years later?

I approached the Review as if I was dealing with a blank sheet. At the time, I asked the Minister if there were any “sacred cows” and he replied that I was appointed to tell him exactly what I thought was needed to get the industry back on its feet, with no exceptions. I did exactly that in the Review….I pulled no punches!
However, what I soon learned was that New Zealand’s starting-point was some way behind where we began in NSW in 2011 – there’s considerably more organisational and legislative reform needed in New Zealand before the real work can begin.

The Messara Report had 17 key recommendations and stressed urgency and high-quality leadership, but many will argue that the process has lacked urgency with a degree of leadership procrastination. What would you say to that criticism?

I disagree; as I have said elsewhere, it takes time for government departments to carefully do their due diligence, write legislation and set up new structures. It will be worth it if we can get the Review recommendations accepted and enacted.

One of the criticisms I have heard going around race clubs, some of which are earmarked for closure, was that you only had a cursory glance at the course and didn’t consult the committees. Can you explain to those people the reasoning and the process you adopted on venues?

I can assure you that while we did not sight every course we studied the operational and financial metrics – for example, wagering figures, race meetings scheduled, profit & loss and balance sheet details and attendance numbers – of each racecourse before making the recommendations. We were also mindful of the geographical locations to ensure that each region in New Zealand would continue to have access to racing. Finally, we compared our list with that of New Zealand Thoroughbred Racing, who were also undertaking a venue review. I can say that our conclusions were very close to those arrived at by NZTR.

Today you are addressing members of the NZTBA at a luncheon in Cambridge. What is the most important message(s) for New Zealand to take on board to recover NZ’s lost ground going forward?

I really only have one message. Racing Reform Bill No1, and shortly Racing Reform Bill No.2, initiated by your Racing Minister, should provide the tools for your industry to pick up all the lost ground.

It is time to select your future leadership team and get behind it, unselfishly. There will be those who want to reject racecourse consolidation and others who will be threatened by a joint venture deal by the TAB. If those reforms don’t happen, I am afraid the industry will only have itself to blame for the consequences.

The goal to double the prizemoney stills seems a long way away. We are losing good people because of racing’s apparent long-term unsustainability, but we have a tight group of passionate racing people whose whole life is racing. Do you have a message of hope for these people?

Yes, I do. Please do not give up and allow the reforms now in the pipeline the chance to have their impact.

The question of animal welfare during your time as Chair at both Racing NSW and Racing Australia was high on your priority list, and you drew a considerable amount of vitriolic criticism from your peers in Australia, but you ultimately have been proved correct on the horse traceability issue. Can you explain how that unfolded?

Yes, I and my Board at Racing Australia believed that we needed to account properly for the Australian thoroughbred herd before horses began racing and after they had finished racing. We did not have the capacity to do that and so we set about bringing in national traceability rules enforceable under the Rules of Racing. A campaign was then set in motion by the Breeders Association to have me sacked, including signed petitions to each State Racing Minister. Regrettably, nearly all breeders ignorantly joined the call. Happily, the state governments supported Racing Australia, the traceability rules were brought in and everyone now agrees they are essential. Traceability is the foundation stone of any animal welfare program!

The wagering landscape in Australia appears to be evolving quickly with the consolidation of the Corporate Bookmakers with Sportsbet (owned by Flutter) becoming a powerful competitor to TAB Corp and recent talk of a consolidated Australian totalisator pool. What’s your view on this and where do you see it going?

This will make for a better regulatory framework and underpins my call for the NZ TAB to piggyback on one of these giants.

Could further consolidation and mergers one day see one single national body running all racing in Australia? Or am I dreaming?

Yes, you are dreaming. There continues to be significant interstate rivalry in Australia, which mitigates against the most efficient usage of racing’s resources.

Can you explain in one short statement the benefits of outsourcing (partnering) our TAB and why you didn’t recommend selling it?

The current scale of your TAB operations is not sufficient to enable it to compete with the myriad other betting products, in terms of the funding required for development and innovation in a super-competitive world. The NZ TAB cannot be competitive without continuous investment in technology and this cannot be funded without affecting prizemoney. There are so many benefits that can flow by joint-venturing the TAB’s commercial operations with one of the world’s wagering giants, not the least of which is a bottom line that will sustain a doubling of prizemoney, so necessary for the future success of racing. I agree that the TAB should not be sold and this will be clear in a joint venture agreement. But let’s make the TAB  competitive and efficient by leveraging on one of these giants.

We have had ‘racefields’ and the POC levy legislation in New Zealand from the start of July this year but few betting operators have signed the contracts. Do you think we should have been better organised with the contracts at the beginning to collect those funds?

The reform agenda undertaken by Deputy Prime Minister Winston Peters is a once-in-a-generation initiative.  However, government departments never move quickly, so we have to be patient. The three revenue initiatives recommended in the Review have been legislated in the first Bill, and I understand that already most of the Australian online wagering operators have voluntarily signed up to the new regime – that’s a great start.

The controversy on the use of the whip is gaining momentum. Do you think it’s inevitable it will be restricted if not banned totally? What would you do if you could make a ruling for NZ now, and why?

After a recent trip to the USA and contact with other racing jurisdictions, I am convinced that it is inevitable that the whip, or crop, will go. Community standards are changing and there are a few things we need to accept if we want our sport to remain relevant. I would, therefore, ban the whip from January 1st, 2020 and take international leadership on this issue. The new rule would require jockeys to keep both hands on the reins, but they could carry the crop for safety reasons.

Where do you perceive the New Zealand racing and breeding industry to be in five years?

If in the second Bill the Government were to put in place the structure whereby all the recommendations in my Review could be executed, and if the Industry has competent and passionate leadership, then New Zealand can again take its place among the leading racing jurisdictions of the world, with the benefits shared by all participants with consequent upside to the New Zealand economy.

John Messara AM with more thoughts on life and racing…

Close Up and Personal	Close Up and Professional
My superstition is… Don’t have one	The biggest lesson I have learned… You need to be supported by a competent and loyal team
Four dinner party guests… Friends and partners who enjoy talking racing	Racing and breeding has taught me… To be patient and accept defeat with grace
I am annoyed by… hypocrisy Favourite holiday destination… The Hawkesbury River	Horse with the most significant influence… Danehill, he changed my life in so many ways
Best book read… The Inglis and Magic Millions yearling catalogues	Best bet I’ve had… Taking the early odds on Miss Finland in the Golden Slipper
Favourite movie… Scent of a Woman I like to relax by… Fishing with close friends	My racing hero… Robert Sangster – few people know how much he promoted Australia and NZ to the world; and Dr Percy Sykes, friend and genius – he had X-ray vision with horses.
Why is your wife Kris a better driver than you…😂 Because she says so!	Alternative career… I love what I am doing!

Robbie and Gai Waterhouse at Tulloch Lodge

by Brian de Lore
Published 15 November

The Optimist made its debut back in April and in the ensuing eight months the editorial content has often revolved around the discussion ad-nauseam of the ongoing problems confronting the New Zealand racing industry.  

RITA, I’m assured, is doing its best in the limited space in which it has to move and we, the industry participants, need to be patient and wait for better days, which, I’m also assured, will be forthcoming. But many of the problems we face in Aotearoa are now universal with some surfacing during the Australian spring.

During the week, Tom Waterhouse started his blog by saying, “I fear racing is facing a looming crisis.” If that remark by itself wasn’t enough to capture your attention, then reading on would have had you rivetted:

“Racing betting turnover is in steep decline, and I believe it is just the beginning. I believe this is in large part due to sport having less takeout of the gambling dollar and racing is no longer the mainstream public focus.”

Isn’t that precisely what The Optimist has been saying since April, and was the thrust of many articles in Industry Opinion in The Informant before that? My complaint has always been that NZRB spent $50 million of racing’s money to build a FOB platform to service sports betting which was always going to result in a reduced financial return to the three codes. No public company would ever have made an investment designed to disadvantage the principal shareholders financially, but that’s exactly what happened.

In Tom Waterhouse’s blog he goes on to explain why a $100 bet on sports will cost the punter $4.00. But the same punter placing a $100 bet on a horse has a cost of $17 to the average punter. He says: “Meaning it’s over four times as expensive to bet on racing because of the way racing is taxed – with a turnover tax. No wonder turnover is collapsing and will continue to fall.”

In New Zealand we don’t have a turnover tax because we have no licensed bookmakers but it makes no difference – our betting levy of two percent which is being repealed over three years was more or less the same tax.  But it applies for any Kiwi betting in Australia and regardless, makes no difference to the payout percentage to punters.

Last week this blog focused on Australia’s ugly spring with falling attendances, betting turnover declines, animal welfare issues and the effect of the POC levy. As Australia’s little brother, the problems they’re encountering only serves to paint more dark clouds on the horizon for Kiwis with the knowledge Aussie’s woes will reverberate here.

To obtain an analytical view of all these controversies, I decided to consult Tom Waterhouse’s father, Robbie, who was more than willing to project his thoughts after a lifetime of betting on the rails through the good and bad times.

Robbie wasn’t holding back in saying: “Race clubs and the government see racing as being the golden goose, but they are killing the goose. I think the reality is that the government hates bookmakers and regard them as being parasites.

“In the old days, every committeeman was a racing man and a good friend. When the latest ATC election came around I knew three of the eight. The other five I have never seen in my life. They put their photographs in the racebook so people would know them, but I still have never seen them.

“We have been infiltrated by non-racing people. Administrators pretend they don’t like betting and are there for the honour and the glory. But to get people to go to the races and party it costs $100 per head, and they go but don’t bet. Then they say, ‘we got 20,000 people to the races – isn’t that wonderful’.”

As a leading rails bookmaker, Robbie says the game has never been tougher than it is today and fears for the future of racing.

“If you have a tax on turnover, it changes peoples behaviour – totally. If you had a tax on gross profits, then bookmakers would still be trying to maximise their profits.

“On the rails, I bet to tight to margins – big turnover but tight margins. My margin might be three or four percent but if I’m required to pay three percent in turnover tax it’s a disaster for me. But out on the lawn where a bookmaker is betting on his own, he might bet to a 30 percent margin, so the three percent is irrelevant.

“A punter who bets with me came and said he had lost $6.5 million for the year, and had been losing every year. He said he was betting with eight different agencies but they had all sacked him. The trouble was that he was only losing at the rate of four percent, and the corporates still couldn’t make it work.

“Today, no one watches the races – no one is interested. When racing was going well the smallest area was the bar and the people that went to the bar were seen as degenerates. Now, the whole racecourse is a bar, and anyone in the betting ring is regarded as being a degenerate.

“Only people who like racing have a bet. In my view, you shouldn’t go to the races unless you want to have a bet. If you were a punter and had your wits about you, you might lose a small percentage on turnover, and you might even win. We have lost all those people – they have all gone.

“If you go to the races on a Wednesday in Sydney, you would be struggling to find anyone who’s brought a sportsman with them and has studied the form.”

On the animal welfare controversy, Robbie Waterhouse thinks it’s one of the biggest concerns but was just as vocal about the quality of the protestors at Flemington on Melbourne Cup Day – some of whom knew so little about racing that they believed the horses went straight from the races to the abattoir, and others who may have been paid to turn up. The Youtube link can be viewed below:

“The current big issue was that shocking ABC program,”said Robbie. “They passed a rule in NSW that no abattoir can slaughter a horse, so all those horses are going to backyard operators instead who are the cruelest and meanest and most dreadful people. I think that has made it very uncool for young people to go to the races.

“I was chatting with a friend’s daughter the other day and she had free tickets to go to the races. And because of that ABC program she couldn’t get one friend to go with her.

“The Greens are getting 10 percent of the vote, and they were running a big campaign saying ‘Nup to the Cup.’ I think it’s a big issue. People don’t realise how quickly the world has changed. Instead of dealing with it properly the race authorities are saying we are devoting one or two percent of prizemoney to look after these horses, but if you have 14,000 horses retiring every year and they live for 20 years, it will cost $200,000 for each horse’s lifetime and about $280 million a year – it can’t be done. It’s ridiculous.

“The RSPCA in Australia each year kills 250,000 pets. I don’t know if you enjoy a cappuccino but in Australia each year we kill 600,000 bobby calves at four days of age so their mothers can provide the milk for cappuccinos. We kill 12 million male chicks because they are superfluous to needs – they only keep the females.

“It’s all very well saying horses are man’s friend, but the University of Melbourne’s Dr Ronelle Welton examined hospital records and coronial records and found that between the years 2000 and 2013 horses were responsible for 74 human deaths.

“Bees and other stinging insects were the next most dangerous, causing 27 deaths, followed by snakes, which also claimed 27 lives but landed fewer people in hospital. Spiders were not responsible for any deaths during that time, the research showed.

“A lot of people say they couldn’t possibly eat horse, but I’ve eaten horse meat and it’s very good. Five million horses are consumed each year worldwide. The reason the greens see horses differently is because they say you’re making money out of horses, so it’s your responsibility to look after the horses for the rest of its life.

“My grandparents were involved with cockfighting – it disappeared. Dad’s best license was the greyhound racing at Rooty Hill with live hares and the pony racing – they went. My best license was Harold Park trots – they would get more people to Harold Park on the coldest, wettest winter night in those days than the Golden Slipper these days.

“Racing has never paid so much prizemoney, and everyone is saying “isn’t it wonderful,” and the average price at the Easter Sales is $380,000. I mix in affluent circles, and I don’t know anyone who can afford to pay $380,000 with tax-paid money. No one can do it.

“I bought a racebook at auction the other day from the 1930s, and there was virtually no horse on the card that was owned by more than one person. Today, except for a few owners like the Sheikh, every horse is owned by 20 people. I think they would be better off slashing the prizemoney and bring the price of yearlings down.”

The Tom Waterhouse blog which appeared on Twitter is shown below: