Month: September 2018

by Brian de Lore
Published 14 September 2018

Is this a game of chess that’s happening between the Racing Minister Winston Peters, an enthralled but poverty-stricken racing public, the NZRB and a very quiet NZTR which has now come out of the closet and renamed itself, Love Racing NZ?

That’s difficult to answer, but we do know chess is an intellectual game between only two players and there’s at least four in this game; perhaps this is a less complicated version of Snakes and Ladders to include all participants.

The moves in this game are so far thus: Messara delivered his report on 27 July, and the Racing Minister passed on his turn until 29 August.; NZRB moved early to publicly state they were ecstatic about the possible outcome of the Messara Report but then, the inevitable train derailment came at the report’s launch and its esteemed leader remonstrated with the Minister as they departed the Claudeland’s Hall.

This visual clash of the heavyweights came not too long after the Minister had said in answer to a question from trainer Shaun Clotworthy, “I know a dead horse when I see it,” referring to the NZRB. Clotworthy rightly asked when a full review of the NZRB’s performance would take place.

NZTR has remained silent throughout this process but in recent times has been dealing with important aspects of leading the thoroughbred industry forward by rebranding themselves as, wait for it – ‘Love Racing New Zealand.’ Meanwhile, a small percentage of highly volatile, parochial industry participants in the provinces have gone apoplectic about the prospect of their courses being closed.

As if this wasn’t enough to ‘centre-stage’ all of racing’s publicity for the past month;  it’s being upstaged by a self-imploding harness racing industry which on this page will draw no further comment.

Everything considered, where has the thoroughbred racing industry placed itself in its quest for survival? We have politics; we still have a runaway NZRB gravy-train; we have administrative apathy; we have anarchy in the provinces, and we have a Minister of Racing who is displaying urgency about ‘fixing the facing game and fixing it fast which was catch-cry a year ago – pre-election.

It’s fair to say that no one in Australasia would have a better grasp on the state of the New Zealand Racing Industry today than John Messara after completing his impartial and comprehensive Report.

The most important aspect of his four-month-long investigation into New Zealand racing is Messara’s neutrality – something no previous report can claim. Not only neutral but doing the review for no monetary gain while paying his own expenses – New Zealand racing is very much indebted to the man for all his efforts.

It’s now common knowledge following Rodney Schick’s question from the floor that Messara would accept an ongoing role if asked, but Minister Peters wasn’t available for comment this week despite a series of requests. So, racing remains in limbo to a degree while we wait for the formation of RITA (Racing Industry Transition Authority).

RITA will comprise of whom and when will it be announced. Its role will presumably be to transition the process of the old regime into the new which looks to be a very challenging task on the face of it.

So why is the Minister so slow to make his move after Messara had said, following the release of his review, that two of the things that should happen is the urgency of acting upon it and 100 percent adoption? Messara is also adamant that success is reliant upon the personnel employed to carry on and promote the completion of the review – an important message when you consider past failures.

Mixed messages came from Peters in his speech to launch the Messara report. He said: “Mr. Messara has today offered a blueprint, especially on racecourse consolidation, and it’s going to focus the attention of many of you, and the government will take a look at it. We accept the need to make a real effort to restore the industry – we accept this industry is capable of doing twice what it’s doing now in terms of GDP.

“What we cannot tell you today, is how much of the Messara Report will become a reality. That’s not because we shy away from the challenge, it’s because we want to test and consult on these proposals with all of you. And you all have to decide, will it be parochialism and poverty or change which gives racing a real chance to thrive.”

The test and consult part of that statement by Peters at the launch was the most disappointing aspect of all because no government department is capable of testing and consulting on the thoroughbred industry either with or without the thoroughbred industry – that’s just a fact of life. It’s never happened before with any degree of success.

Government departments are just incapable – much in the same way the NZRB is incapable of running racing sustainably. They are no more than squares trying to fit into a round hole.

The administration of racing has come up with, for its own devices over the past 20 years, what can only be described as a ‘fail. ‘ Messara has said his report needs 100 percent adoption to make it work so cherry-picking it, is far from a recommended option. 

Again the racing Minister in his speech said, “The next step for us is to all fully digest this report. Many of the recommendations have serious merit, but they require careful consideration rather than carte-blanche approval rather than the industry’s consent. This is because of several technical considerations requiring further advice. But all of that is capable of being managed.”

The bottom line is that government departments have never had a clue about our industry. NZRB effectively evolved into a government department, and as non-racing administrators, they have proven to be disastrous in everyone’s eyes but their own.

Also, the FOB platform is being built at an outrageous cost ($40 million plus) which could have been curtailed 10 months ago. They didn’t start on it until December, and in reading the Messara report it appears to already be redundant with the plan to outsource the TAB – it may be scrapped just like the Typhoon System; mothballed and written-off.

Although Peters early in his speech referred to the suggested closures of venues several times, the real financial thrust of the Messara Report is not in the closures but in first of the three parts – the structure, finance and legislation which is what will mainly drive the goal to double stakes. That part so far has been least debated or even raised in the 12 or 13 days since its release.

During that time, having canvassed industry participants as to who has read the Report from cover to cover, only three could be found by this writer.  One of three people is Te Akau Racing boss David Ellis.

“The industry has gone crazy talking about track venues that have to close down. It’s going to be 18 months to two years before we get these all-weather tracks up and running. We can’t even agree to where they are going to be at present,” said Ellis

“And we need every grass track until these all-weather tracks are proven and we are happy with them. We are going septic as an industry on something that is two years away. Everybody’s effort is being consumed on that very subject.

“You can’t expect someone who lives in Australia to get every course closure correct. The thrust of what he’s saying is that we need to close 20-odd racecourses. Well, even a blind man knows that we have got to do that.

“But whether it’s Reefton, Greymouth or Kumara, by way of an example, it’s irrelevant. Why would people expect to take their horses five or more hours to the West Coast when there’s no local participation whatsoever.

“There are way bigger issues that need to be actioned urgently than the venue revenue which all the clubs are going to have an opportunity to put in a submission. We need all the grass tracks in the interim to keep racing going and then once the all-weather tracks are in and we can have racing on them through June, July and August and September and have all the trials on them – then the 20 tracks will be surplus to what we need.

“To hear these Presidents of the clubs go on the way they are going on about their own little patch, and not take into account the overall good of the industry, when there’s no local participation in terms of ownership and training, etc., is not going to help the industry progress to where we need to save it.

“Looking at it from Winston’s party viewpoint, he needs to get this up and running in the next six months so that every racing person can say that this NZ First Party has delivered on its promises; has actioned it and we will vote for them at the coming election.”

by Brian de Lore
Published 7 September 2018

Almost a week on from the release of the Messara Report, its author John Messara took time out from his temporary base in New York to answer some Brian de Lore questions about the Report’s compilation, aspects of its contents and its future effect upon the NZ racing industry:

Q. It was a big surprise to most people that you even agreed to do this Review let-alone do it free of charge including paying all your own expenses. Can you say what the motivation was behind accepting to do this project?

A. I had been watching the plight of the NZ Racing Industry intensify over the last few years. When I retired as chair of Racing NSW, I was often asked by Kiwi friends what could be done to turn NZ around. Kiwis have a history of being fierce competitors, and I felt that if the framework was right racing would rise again to a globally competitive level there. Who can forget NZ’s dominance in the years when I was entering the Industry in the 1970s? The quality of NZ horsemanship and your ability to breed and train a good horse is well known. So when I received an approach from the Deputy Prime Minister I gave it serious consideration. I felt confident that Winston Peters would make the reforms necessary to achieve a result and after all, I was being asked to help part of the racing family. In any event, I regarded it as a privilege to be asked to assist such a historically significant industry.

Q. You have completed a comprehensive 82-page Review of NZ racing in around three and a half months during which you made numerous visits to NZ. That must have involved long hours and taken quite a toll on you?

A. Undertaking the Review was more demanding than I had expected because while Minister Peters had asked for a “high level “ review there was no point delivering a document which did not provide a fairly detailed road map. Also, as I launched into it the importance of presenting a sound report weighed heavily on me, given its possible impact on the lives of thousands of people. After an initial three weeks period of reading and reconnaissance, I determined a structure for the Review and targeted three people to assist me, Darrell Loewenthal (governance and legislation) John Rouse (clubs, racecourses ) and Craig Nugent (wagering & the TAB). These three men were well known to me from my period of racing administration in Australia, and I regard them as diligent, reliable and competent in their individual fields. The research, site visits, and interviews continued for about ten weeks, and then the writing began. I delivered the Review to Winston Peters by the due date of 31 July, and I have to admit that it took its toll on me. There were others within my own staff that assisted with editing, layout, etc. I am grateful to all the team.

Q. In doing this review you must have noted the differences in the psyche between European Kiwis and Aussies, the former being the descendants mainly of Scottish and English Presbyterians, while the latter descend mainly from Irish Catholics. Do you think this accounts for the difference in the betting statistics you have graphed in your review which shows over 18-year-olds bet NZ$225 per head in Australia compared to just NZ$92 in NZ?

A. I think that’s certainly part of the reason for the disparity in wagering habits between our two countries. Arguably, a more streamlined and attractive package of racing and betting options is bound to narrow the difference. However, I see the export of NZ racing to other countries as a serious growth path for the industry, once tracks, prizemoney, operating practices, etc have been improved as proposed by the Review.

Q. If the Minister adopted your review 100 percent and we carried out all the requirements to the letter, how would you envisage the state of the New Zealand Racing Industry in five years time?

A. I am very confident that in less than five years NZ racing would re-enter the global racing scene. Sustainable prizemoney will drive investment in higher quality bloodstock and breeding, grow race field sizes and local & overseas wagering on the NZ product, which gets the whole cycle going again. Naturally, you’ll need to keep your eye on the ball, but a smaller number of well appointed and maintained tracks, a sound industry structure, good leadership and accountability and a modern and competitive wagering operation certainly creates the framework to remain competitive. The NZ spirit will do the rest.

Q. You have suggested that we need to adopt your recommendations in their entirety and not cherry-pick this review. Can you say what the perils of cherry-picking it would be?

A. The recommendations are intended to work in tandem to generate the revenue for the doubling of prizemoney and provide the framework required to go forward securely to industry sustainability. They are therefore interdependent on each other, and each recommendation has been included for a good reason. Pursuing some, but not all of the recommendations will undermine the success of the whole reform programme.

Q. You have said in your summary that the NZ Industry is now at risk of suffering irreparable damage, and you have also said we need urgent action on this. How close to the edge of the cliff are we and why do you think we have allowed ourselves to get into this state?

A. Your Industry is close to the brink. Owners and trainers cannot keep operating so poorly. I take the view that people are the critical factor to success. If there is not a clear path forward supported by the industry very soon, there will be a veritable exodus of the remaining key investors and participants from the NZ Industry to more profitable jurisdictions.

Q. My perception of your review is that it will involve short-term pain in both venue and NZRB job losses, but the thrust of it is about long-term sustainability and growth and long-term security for most of our full and part-time grassroots employees. What’s your view on that?

A. I think you will be surprised what a rise in confidence will do for employment. I don’t see any overall increase in unemployment arising from the recommendations in the Review, even in the short term. However, I have recommended a Performance and Efficiency Audit of the Racing Board with particular emphasis on operating costs. This will give us a baseline on how the TAB is tracking, which is an important factor to have in hand before any negotiations begin with wagering operators regarding the outsourcing option. As for track closures, I don’t believe this will generate unemployment as the racing program will be distributed to other venues, which may require more staff, as their operations will have expanded.

Q. If our Minister of Racing did act upon it urgently from this point forward, how much progress could we make before the end of the year?

A. The Review is now the property of the Minister, and it’s entirely his prerogative to act at whatever pace on whatever part of the Review he chooses. However, most of the recommendations can be actioned quickly. On the other hand, as you’ll read in the Review, the track closures are a five-year project to minimise program & Club disruption.

Q. Changing the structure of racing will require changes in legislation, so from your experience with Racing NSW how long, at a guess, is it going to take to get the legislation we need for a sustainable future?

A. The legislation can be written quite quickly using NSW as something of a template.

Q. In achieving all you achieved for Racing NSW you spent a lot of time lobbying the state government. Do you forsee any issues going forward with the prospect of getting NZ politicians from all parties onside to get this legislation passed?

A. I think all sides of the chamber recognise the plight of the New Zealand industry. I found in my meetings with the relevant Opposition members that they are open to reform.

Q. In the second part of the Review under Wagering and the TAB, the first thing you point out is New Zealand’s lack of scale prevents us from being competitive against international wagering operators. That being the case, was it foolhardy for the TAB here to set out to build our own Fixed-Odds-Betting (FOB) in the first place?

A. I have made it my aim in this Review to look forward and not back; however, I want to stress that outsourcing some of the TAB’s commercial activities does not mean selling the TAB. In fact, I have specifically rejected the idea of selling the TAB.

Q. You also call for full operational outsourcing of all domestic wagering, broadcast and gaming operations to a third-party wagering and media operator of international scale. Does that mean you are suggesting the FOB should be scrapped now before completion to stop the hemorrhaging of the ongoing costs estimated to be $3 to $4 million per month?

A. I do not have sufficient information to comment on this one.

Q. The outsourcing proposal on page 40 of your review would clearly put all wagering responsibilities in the hands of a third party outsource operator. Using the existing infrastructure of a third-party operator would save NZ tens of millions of dollars in administrative costs but would the NZ punter, or our industry be disadvantaged in any way?

A. I can only see advantages for the NZ punter in the recommended new arrangements.

Q. Predictably, the most opposition to your Review is being voiced from racing people from the locations where you have recommended the 20 venue closures. Do you have a message for the people who will be affected?

A. I fully appreciate the disappointment being felt by the hard-working boards, members and supporters of the tracks proposed for closure. We have put forward a model of the type necessary to achieve the objectives, but this model can be altered “at the margin”  if the code leadership so determines. The model we propose is based on the demographics and the financial and operating metrics of the relevant tracks. My message to those affected is that the time has come for everyone in the industry to contribute to the reform required if success is to be achieved and opportunities for all participants are to open up. Owners can no longer subsidise the operation of 48 tracks by sustaining huge losses on their investment, and the track upgrade program, essential for improving the overall product offered to punters and racegoers, cannot be implemented without reducing track number

 Q. In your resurrection of Racing NSW which you did with CEO Peter V’landys, you didn’t close down one racecourse, so how do you sum up the difference between NSW and NZ?

 A. NSW was awash with cash, and we had both windfall funds from racefields legislation for the capital expenditure necessary to upgrade country clubs, as well as a powerful stream of recurring revenue for prizemoney, recently augmented by parity legislation. In those circumstances, there was no need for action on tracks.

Q. Is NZ Racing with all its venues and small population the product of a bygone racing era and have we been caught in a time-warp?

A. I am afraid so.

Q. Given that you are not accustomed to failure when one evaluates previous John Messara projects, if the Racing Minister was to ask you for an ongoing involvement to oversee the initiation of your recommendations and get it up and running, would you be prepared to accept such an invitation to ensure things are tracking in the right direction?

A. That is a hypothetical question.

Q. How would you sum up this whole NZ experience in terms of the people, the structure and the prospects of our racing industry going forward?

A. I have met many decent and passionate participants and administrators during my travels in NZ. With the benefit of an outsider’s independent eye and supported by my experience & involvement in another jurisdiction,  I am sure that the Review, if fully actioned, will bring about the recovery that NZ deserves for its racing industry.