by Brian de Lore
Published 31 May 2019
Few racing stakeholders would have even known it was happening, and fewer would have tuned-in to Channel 86 on Sky to watch it, and even fewer would have seen last Tuesday as a momentous day for the future of New Zealand racing.
But Tuesday was a momentous day for racing because it was the day racing Minster Winston Peters introduced his Racing Reform Bill No.1 to Parliament, and it was the day that will kick off the process that will transform racing from a dying dog to a dancing dragon.
Yes, the detractors and the denigrators and the whingers are all coming out enforce voicing negativity; we do have a lot of very frustrated people in this business, but it’s the view of The Optimist that Minister Peters is delivering the promises he made pre-election, and substantially better times are ahead for the sport of thoroughbred racing.
Everything that occurred on Tuesday in Parliament for racing was very positive, and it came only after a mountain of planning, scheduling, and execution; it didn’t happen by chance.
The Minister made sure that his timing was right, he had the full support of the Coalition, MAC had done its job in acting upon the blueprint known as the Messara Report, and that nothing that the National Party protested in their speeches or at debate time, could influence the result.
The bone of contention for National was the truncated time-period between the first reading and the Bill going to Select Committee by June 11th and coming back to Parliament for a second and third reading before being passed into legislation in record time. But the protestations failed.
National speakers said they supported the Bill but then argued for a delay to string it out for many more months to give sports and other bodies time for submissions. They also argued that the Transport and Infrastructure Select Committee chosen for this Bill was an unsuitable committee and that it should be going before the Primary Production Committee (Chaired by National MP David Bennett).
An amendment to that effect moved by Gerry Brownlie failed by 63 votes to 55. All amendments failed by the same margin and the Bill will now go to the T&I Select Committee which happens to be chaired by an NZ-First List MP.
Brownlie further argued that the racing industry was boring, which appeared to be a classic case of the pot calling the kettle black. He also claimed, along with his National Party colleagues, that he had been consulting with racing people, but where and when that happened no one seems to recall. Brownlie couldn’t remember the name of the Wellington course (Trentham) and also said the racing business was a $26 billion industry when in reality it is only $1.6 billion.
If you didn’t understand why the Minister called for submissions on the Messara Report last October, then you do now. The submissions following evaluation were taken into account by MAC in prioritising recommendations on operationalising the Messara Report – so the time for submissions has well expired. The Minister can legitimately argue he has consulted the people.
As well as the National contradiction of voting against it, they claimed a lack of consultation with sports, plus the truncated Select Committee process for a Bill of its size, gambling harm and any other reason they could fabricate. But they did it without aplomb and did it without any substantial knowledge of the industry.
National did racing a huge disservice during nine years of government during which time they ironically had the racing vote. But that vote turned against National in the 2017 election, and the analysts say the racing vote got NZ First over the line – if you voted for Winston in 2017 then you have been more than vindicated by what happened in parliament on Tuesday.
National looked inadequate in both the speeches and debate which included the smarmy Nathan Guy who was Minister of Racing for more than five years. When Minister he sat on the racefields legislation and did nothing about it for years, but on Tuesday blamed parliamentary colleagues for their inaction on racefields.
Little wonder that the NBR (National Business Review) rated Guy the least impressive Minister during the last term of National government. During the debate, he was shut down by the Speaker of the House for his lack of argument.
Guy is the person who appointed Glenda Hughes as Chair of NZRB and Hughes, in turn, was responsible for the appointment of CEO John Allen – none of those three have made a positive contribution; three more non-racing people which thoroughbred history will place in the ever-increasing basket of failed leaders.
National MP for Central Auckland Nikki Kaye was less than impressive when she argued that sports were getting a less than fair deal with the new Bill. She talked aimlessly for 10 minutes and not only showed she had failed to comprehend the Bill, but displayed a complete lack of understanding of how sports gain a cut of the betting despite not having either been part of the initiation of the TAB, or having contributed anything towards the running costs of its administration, retail or online services.
Kaye doesn’t understand that the two racing reform bills are designed to increase revenue, and as that expands so does the take for sports. The POC (Point of Consumption) levy means that any resident of New Zealand who places bets on a sporting event with an Australian corporate bookmaker will soon see a percentage of that bet returned to the sport in NZ – a new revenue stream and a first for this country.
Kaye also hasn’t grasped that $50 million of racing’s money has been used to build a FOB (Fixed-Odds-Betting) platform which is essentially designed to increase sports options and sports betting which will increase the sports take. Not much of a deal for racing for which we can thank CEO Allen.
Nor has she taken into account the moral high-ground on the history of the TAB – started in 1951 by the racing clubs for the benefit of racing. Along the way, sports hitched a ride and have gleaned a percentage with no contribution to the running costs.
Sports currently get around $10 million annually from the TAB which makes it the country’s second-biggest avenue of financial support behind the government. And now they want to bite the hand that feeds them.
The margins on sports betting are a lot less than racing. For example, the gross profit is historically between eight and nine percent from which sports would be paid a net two percent and racing a net two percent. But Allen has admitted that in the first three months of the FOB (January to March) the margins were running at, not nine, but only three percent, and given the competitiveness of the global market, the margins are likely to have remained skinny ever since.
The Kaye argument is non-sensical, but the gradual infiltration of sporting people into NZRB over many years is now seeing sports putting it its hand up for a larger share of the pie even though the pie was cooked-up from a racing recipe with all ingredients paid for by racing.
In the overall scheme of politics, it has to be said that National on Tuesday did not show the racing industry enough understanding or sympathy to win back the racing vote if an election happened tomorrow.
The Debating Chamber mostly emptied-out for Tuesday’s reading, speeches, and debate, and the them and us battle lines were drawn for those who remained. The banter was characterised with disingenuous performances of either reading from a script or just towing the party line – if it were the pop-up globe theatre putting on a Shakespearean play the actors would have been booed-off the stage.
The day was a resounding win to Minister Peters and racing, and in yesterday’s budget also came an allocation of $3.5 million which is likely to be for the running costs for RITA to carry out the transition of every item contained in the two Bills which will take a year.
That $3.5 million is part of a $46.5 benefit to racing that will come back over the next four seasons, the majority being the repeal of the betting levy. Although the exact use of the $3.5 million isn’t specified, the major slice may be in place for RITA’s Change Management Plan which will undoubtedly incur costs through restructuring.
July 1st can’t come around fast enough!
