by Brian de Lore
Published 12 July 2019
When it comes to being under the control of the DIA (Department of Internal Affairs), you can bet things will be moving very slowly. That’s the nature of the beast.
Racing in New Zealand is in that predicament despite its desperate state. The clutches of a government department and its bureaucratic lack of inertia is the thing that will sink racing before any well-conceived RITA plans hit the road running.
What’s it about? Well, think about the expert advice John Messara advocated in his Review delivered to Minister of Racing Peters on July 27 last year; yes, it’s only a couple of weeks short of a year ago. Messara in making his suite of 17 recommendations stressed full adoption and urgency of implementation for a successful outcome.
On page 10, he stated, “…it is critical that the implementation of the recommendations be pursued urgently and in their entirety, as this is the step at which previous reform efforts have failed.”
Wasn’t it Albert Einstein who said, “The definition of insanity is doing the same thing over and over again and expecting a different result.”
The industry has done exactly that, and racing is now lurching from Messara’s expression of being in ‘a serious state of malaise’ a year ago to today’s predicament of ‘a perilous domain of demise.’
Last week’s revelation that nothing has yet been put in place to collect racefields or (BIUC) (betting information user charges) or POC (point of consumption) levies is the problematic outcome of being DIA controlled. Information received from the NZ-First office said it would take six to 12 months to get the necessary agreements.
Last year the Minister wisely decided to adopt the Messara Report, but after consultation with governmental bureaucrats, the urgency factor was deleted from the formula. It is now apparent the recommendations in the report have been somewhat remolded to suit that bureaucratic process – at the expense of the owners who the Minister has previously identified as the most critical people in racing.
Racehorse owners today are markedly worse off compared to 12 months ago. Stakes have remained constant on borrowed money, but everything else is rising in costs around them, which impacts every owner.
Veterinary services, feed costs, transport costs, and the impending 15 percent rise in ACC levies for stable staff and trackwork riders have all gone up or going up. And the buck stops with the owner. Trainers, too, are worse off with a diminishing pool of owners, rising rentals with some subsidising the cost of the horsebox in the cause of staying actively involved.
What’s the state of the racing nation, you may well ask? The revenue streams that racing has talked about as being urgent are apparently not urgent if you judge it on DIA’s mode of operandi. DIA is the designated authority to collect the levies – that was a ministerial mistake.
NZRB had taken its overdraft facility up to the maximum of $25 million this season with nine to $10 million due for repayment at the end of this season – a challenging situation for RITA to inherit, perhaps. With only eight to $10 million cash-in-hand, the chance of repaying that money is virtually nil – RITA will have to renegotiate a roll-over of that overdraft facility.
Where does that leave stakesmoney for the coming season or how long can the current level of stakes continue without those new revenue streams in place? That would be a good question for RITA to answer to the industry ASAP.
But the answer may not be forthcoming because presently RITA is not talking while it weighs up its options. For this and last season, the NZRB borrowed a total of $22 million to make the minimum stake $10,000. Would it be logical to assume that to keep stakesmoney at its current level RITA would need $11 million from somewhere or just run out of cash by about November?
Is this racing industry broke? The answer is yes. Do most people involved have a touch of the ‘denials’ and a hint of Ostridge about them? The answer is again, yes. Is there any significant evidence of urgency to fix things coming from this bureaucratic ensemble of revenue collectors? This time the answer is no.
RITA will be urgent about fixing things but the fact that John Allen and his salubrious bunch of overpaid executives have thrown the RITA team a hospital pass is likely to have provoked a lot of head-scratching.
The FOB platform has been operational for six months, and it’s clearly evident it hasn’t fulfilled any of the John Allen promises. The NZRB budget will be shy by something like $20 million, and although TAB turnover on sports betting has risen in recent weeks, it is not delivering a good enough margin of profit.
Information supplied to The Optimist says the margin on sports betting has been only five percent in recent times. By CEO Allen’s own admission, it was only three percent for the first three months of its operation (January to March).
It cost $50 million plus to build when you correct the NZRB creative accounting, but an even bigger worry is the total $17 million in annual running costs that they signed up for with Paddy Power and Openbet. One of those contracts runs for 10 years and the other for five years – a substantial ongoing commitment, and a headache for RITA.
The new website is a ‘dog’ as many of the TAB’s long-standing customers have judged it before defecting to one of the Australian corporates. A lot of the issues with it are unfixable, and when you add to that the poor customer relations record of the TAB and its 2018-19 performance, the long term prognosis for increased returns to the codes is merely fake news.
The bottom line is that the doubling of stakes for New Zealand racing isn’t happening anytime soon. The way this saga is panning out, it will be a superlative effort by RITA if they can hold stakes to the current level for the entire season.
The first thing that should happen is for the Minister to relieve DIA from its role as ‘Designated Authority.’ Put a body of people in charge of that critical responsibility that know what they are doing – take some of the insanity out of the equation and replace it with common sense.
Even holding stakes to the same level is losing ground. Not only do the costs rise, but every time an Australian jurisdiction announces stakes increases, New Zealand loses ground. NSW’s third tier of racing is ‘Country’ which last week announced the total prizemoney allocation would rise to A$81 million, which is an increase of A$48 million commencing in August 2019.
The NSW Racing Media Release is reproduced below:
MEDIA RELEASE
Tuesday, 2 July 2019
Major prizemoney increases for feature country meetings.
Racing NSW today announced major prizemoney increases to country racing carnivals right across NSW as a further boost to country racing which will commence from 1 August 2019.
With this announcement today, total annual prizemoney to be paid for country racing in NSW will now be more than $81 million which is an increase of $48million or 145% since 2012. Country racing has received the largest increase ofany sector during this time.
There will now be eight feature Country Cup races with prizemoney of $200,000 at the following racecourses: Port Macquarie, Goulburn, Albury, Wellington,Tamworth, Wagga Wagga, Scone and Grafton.
In addition, prizemoney for Grafton’s Ramornie Handicap, the Wagga Wagga Town Plate and Scone’s Dark Jewel Quality will also be increased to $200,000.
The Coffs Harbour and Muswellbrook Cups will receive an increase in prizemoney to $150,000 each and the Taree Cup, Dubbo Cup and Snake Gully Cup at Gundagai will receive an increase in prizemoney to $100,000.
Also, the feature meetings at Lismore, Coonamble, Coonabarabran, Mudgee, Moruya, Bega and Orange have received significant increases for their Cups and support races at these meetings.
At each of these feature country meetings, there will now also be a $50,000‘Country Magic’ race which is restricted to country-trained horses only. These ‘Country Magic’ races will ensure country participants have an extra opportunity to compete at these feature meetings.
These latest announcements follow on from recent increases to minimum prizemoney levels to $22,000 per race and 40 Country Showcase meetings per annum with each race being at least $30,000 and the introduction of races restricted to country-trained horses only such as:
– $1.3 million The Kosciuszko-
– $500,000 Country Championships Final
– 7 x $150,000 Country Championships qualifiers throughout NSW for total $1,050,000
– $75,000 weekly Highway races
– $40,000 maidens for country-trained horses only
Racing NSW will also provide marketing and promotional support to these country race clubs. These events are also supported by Destination NSW to ensure tourism is brought into the local region. The event will get the local community to get together to celebrate everything great about their town.
Racing NSW Chairman, Mr Russell Balding AO, said: “A key strategic priority of Racing NSW is for country racing to continue to stage great carnivals and Cup Race meetings and to ensure that thoroughbred racing is widely celebrated and enjoyed throughout all of NSW, not just Sydney and the Provincials.
“Thoroughbred racing, dressing up, heading to the races and having a bet is part of what we do.
“The prizemoney increases for these meetings, along with the marketing and promotion of the Carnivals themselves, particularly to the younger demographic, will lift NSW Country Racing to a whole new level.
“In addition, the promotion, through Destination NSW of the particular regional attractions and experiences leading up to and during the actual Country Racing Carnival, will be another reason for people to visit regional NSW and make Country Racing part of their short stay or holiday whilst in the region,” Mr Balding said.
Minister for Better Regulation and Innovation, Mr Kevin Anderson MP, said: “The increase in prizemoney is not only good for racing, but has great flow on effects for regional communities.
“It’s no secret that our regional communities are doing it tough, especially given this unprecedented drought, so investing in racedays can help drive tourism and increase bed nights which is crucial to our local economies,”
Mr Anderson said. “Racing is more than just an event in regional communities, it’s part of the culture, which is why we want to continue to make racing as enjoyable and accessible as possible.”
