by Brian de Lore
Published 22 November 2018
The age-old saying that a week is a long time in politics was upstaged by racing which dragged through the week a disappointing two-day Ready To Run Sale at Karaka, saw some unseasonably inclement weather throughout the country and had a week of silence on racing’s political maneuvering.
Racing Minister Winston Peters had a busy schedule this week with some late nights at parliament but found time to speak briefly to The Informant and confirm progress is being made for racing in the halls of power.
“Everything is being put together to ensure it goes to the cabinet committees in the next few weeks and well before parliament rises so structurally everything is in place,” said the Minister.
“RITA has to be a creature of the legislation. However, its precursor can be as a ministerial advisory group; one will just shade into the other when the legislation is passed. I can virtually see RITA being established in a matter of weeks, but initially, it will not be what its potential shape will be.
“We are going as fast as we possibly can on getting the legislation done. In a matter of weeks, there will be no delay at all in terms of the transformation we are working on.”
The Minister refused to be drawn into the number of people to comprise RITA or who would be involved but when put to him that past industry leaders had lacked industry knowledge he responded thus, “I expect RITA to have a high level of industry competence”, and competence.”
When questioned on the future involvement of John Messara, he replied, “I want to ensure that the integrity of his report is maintained, and the best way to do that is to keep John involved. That’s what I have asked him to do; there is no doubt that there will be a continuation of communication with Messara because I asked him for that.”
And on the Annual Report from NZRB which is yet to be released but which has to be approved by the Minister before its tabling before parliament, he said, “I’m going through the current annual report with a fine tooth comb. I have it in front of me right now.”
Has the industry adapted to parliamentary pace? We have a Messara Report which was completed four months ago. We have an NZRB board who are well past their use-by date but remain enconsed; we have a Minister who isn’t in a hurry to get rid of the board, and we have the Department of Internal Affairs (DIA) which is still analysing the Messara Report submissions five weeks after the closing date.
We also have a Fixed-Odds-Betting Platform that during the week was further delayed from December 5 until at least December 31 according to an internal NZRB communique – the chances of the New Year’s Eve launch seemingly highly unlikely given it’s the middle of the festive season.
RITA is the brainchild of the NZ First Chief of Staff Jon Johansson who was appointed to the job over a year ago by Minister Peters. Johansson had been a regular political commentator on TV1’s Q & A, and radio, and has written several books.
At Victoria University in Wellington, he was a senior lecturer in comparative politics at the School of History, Philosophy, Political Science & International Relations of Wellington. He specialised in New Zealand and American politics, and political leadership – can you get more academic than that?
The problem for racing with Johansson is that he doesn’t know a thing about racing or running a business, and he now appears to be having a big say on how the Messara Report is handled; hence the mandatory establishment of RITA.
Until legislation is passed which at the very least will be next May, RITA will have no powers to do anything except make recommendations to the Minister’s office (Johansson) about how to implement the Messara Report.
The existence of RITA means that the Minister is keeping on the current NZRB board who will collect their director’s fees, of course, but are now toothless and will have no say in future policy making.
RITA will supposedly involve four to five people including a chairperson who will be au fait with racing. Whoever is appointed needs to know the wagering business backwards as that’s what the NZRB will become with its impending renaming as Wagering NZ, but it appears to be a typical government-paced project that will do everything in its own time rather than cater to the urgent needs of the industry.
According to some sources, RITA will be appointed before the NZRB AGM on December 7 but as already stated, cannot have any power until it comes under the Act which will not be passed until the middle of the year. Consequently, the current racing board remains in place but can’t make a decision.
An offer to replace the board was made but rejected. Right now it’s hard to understand why the incumbents would want to stay other than to collect the director’s fees because they are effectively powerless to act and only preside in title.
Áction is now required from the collective power of the three codes which collectively could wield a big stick if they got together and made a cooperative agreement to take action and force the issues as they have never done before. Will they do it; it doesn’t appear to be in the DNA of any of them but times are desperate, and they cannot afford to be like Nero and play the fiddle while Rome burns.
The codes could decide on a course of action beginning with the engagement of Deloitte, to procure an urgent decision on the viability of everything the NZRB are doing business-wise including an appraisal of the FOB, and the pursuit of the TAB outsourcing. This is now an urgent negotiation, according to Alan Jackson, relative to getting in the Tabcorp queue in front of the RIWA which starts its process early next year.
If the three codes agree on taking this action then the industry can move forward – they cannot afford to wait. The whole process will take a long time and time is of the essence. To make this work someone has to roll their sleeves up and grind it out for two years.
Outsourcing the TAB shouldn’t be contemplated without the involvement of John Messara because he and his ex-Tabcorp cohort Craig Nugent are both highly experienced in such projects and its only the experience and guile of these people who can negotiate the best outsourcing deal.
The Messara Report aims to double prizemoney, and most of the funding to do that will come from the transitioning of the NZRB into Wagering NZ, the racefields legislation and the outsourcing of the TAB. Perhaps that’s where RITA may be of use in pushing those items forward, but Messara has already shown what he can do with racefields.
Racefields didn’t happen in the first instance here because it was poorly written in haste and did not get the required discussion before it was presented in parliament for its first reading in August 2017. It was never going to be adequate for the industry.
In an internal communique, the NZRB has recently admitted that it’s already eight percent behind budget this season, and with a current flat economy we have been witnessing a decline in betting – Cup Week was down 13.4 percent on last year. NZRB has also budgeted for profits it will not get including those from racefields and the FOB platform for which blast-off is into its fifth delay – Houston; we have a problem!
The cost of the FOB is currently admitted to being $40 million, but is likely to far exceed that with overruns. Some of it will have been capitalised in last year’s result although that is presently unknown due to the annual report not being released until December 7.
Not getting the FOB budgeted profit, racefields and the possibility of the FOB not working for some time, or not working at all, could see the industry staring down the barrel of a somewhat tragic result by this season’s end.
If the below budget percentage increased due to this downward trend in betting, and then you take into account racefields, and the strategic initiatives with the potential of the FOB costing another $6 million due to the ongoing delays. Afterwards, this leaves only four months of the season to achieve the budgeted profit from FOB in the off-peak racing season, so at best you will get 40% of their budgeted profit. Suddenly they have missed the budget by $25 million.
Next week will be another long week in racing as we await the announcement from DIA on the submissions, the possibility of the release of the names to comprise RITA and the impending AGMs of both NZRB and NZTR.
