Month: May 2019

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 11^th 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 1^st can’t come around fast enough!

By Brian de Lore
Published 24 May 2019

The burning question of who is running racing in New Zealand five weeks before RITA replaces NZRB may leave you scratching your head.

If you go strictly by the Racing Act 2003, then NZRB is in charge, and as CEO John Allen has been telling his staff, it’s BAU (Business As Usual). Is this why he and his highly paid executives are touring the country with seven venues listed for yet another round of ‘Industry Conversations’ with a footnote on the NZRB webpage that says further venues may be added.

Is this a serious attempt to rally industry support, or an attempt to find out if Hokitika and Riverton actually exist, or can it be construed as ‘gardening leave’ as the end of Allen’s tenure as CEO nears? Perhaps it’s a farewell tour but as The Optimist pointed out last week, these conversations which may more appropriately be called  ‘Nonsense to the Nonagenarian’ speeches cost in the vicinity of $8,000 to $9,000 a time – diligent use of industry finances you might not say.

Whatever’s analysed and said about NZRB’s use of industry funds, from an industry stakeholder viewpoint, it can’t be complimentary. And the verdict on the rhetoric NZRB has been spinning the industry for the past four years; it will not it be complimentary either.

The Racing Act of 2003, as mentioned above, may have been a good idea in theory, but in practice, the Act has received only cursory respect from NZRB. No organisation was in place to mediate it or ensure it be followed as a non-contestable piece of legislated law. Over the years, the three codes have failed to stand-up strongly enough for the rights of the stakeholders.  

Take clause 9 (1) under Functions of the NZRB Board, as an example. It says:(a) to develop policies that are conducive to the overall economic development of the racing industry, and the economic well-being of people who, and organisations which, derive their livelihoods from racing.

Also, under Functions of the Board Clause 9 (h), it says: to use its resources, including financial, technical, physical, and human resources, for purposes that, in the opinion of the Board, will directly or indirectly benefit New Zealand racing:

Very poorly written legislation with the use of the word ‘opinion’ and can any stakeholder in racing honestly raise their hand and say ‘yes,’ they have received benefits? Or can any of the organisations it refers to – the owners, the trainers, and the breeders raise their hands and say ‘yes’ that has happened? No. they cannot; none of that has happened to any extent and protestation by all these organisations to the treatment handed down by NZRB has been only soft.

Not enough fight in the dog – Poodles when they needed to be Rottweilers. The passing into law of new legislation in the weeks ahead will, therefore, only be as good as the people appointed to enforce it and perhaps the addition of an ombudsman for its enforcement – the latter might be wishful thinking.

Participants at the coalface of racing only want a fair go. They need a reason to remain in the game because the anecdotal evidence suggests its tougher for owners, trainers, and breeders in 2019 than it’s ever been in the history of thoroughbred horses in New Zealand  

Racing Minister Winston Peters didn’t announce the full make-up of RITA (Racing Industry Transitional Authority) at last week’s May Sale at Karaka, but he did after making his speech confirm that the existing five people that make up MAC (Ministerial Advisory Committee) are the five that will transition into RITA with the addition of two new members for a board of seven. Who these two appointments are will be is crucial to code fortunes over the next 12 months.

And that brings us back to the original question of ‘who is currently in charge of racing? It’s not MAC until it becomes RITA on July 1^st. Officially its NZRB but they will be too busy cleaning out their desks. In reality, it’s the Minister, but he’s too busy doing Foreign Affairs and other things and so has delegated the responsibility to his office – does that make sense.

The DIA is involved which means bureaucratically compliant appointments, i.e., the two additions to RITA come under State Services Commission guidelines – the important issue for racing is, are they to be racing people? Will they have an understanding of the industry and drag this business away from a succession of failed Institute of Directors’ appointments that have dogged racing for so long.

On Page 11 of the 12-page Cabinet Paper 2 for Transitional Governance, it says:

“Governance of RITA

7. agree that the governance provisions for RITA be:

7.1 a Board of up to 7 members;

7.2 that Board members have a strong primary duty to act in the best    interest of the Board and the achievement of its goals;

7.3 the Board members are to be appointed by the Minister for Racing for the duration of the transitional period, but subject to reappointment for a finite period if required to manage any residual matters;

7.4 that candidates for appointment to the RITA Board will be required to collectively meet specific skills and experience criteria, including governance and:

7.4.1 industry expertise to effectively manage racing functions; 7.4.2 knowledge and experience of sport at a national level; 7.4.3 commercial and/or legal expertise to manage devolution of  assets, functions and responsibilities; and

7.4.4 change management expertise to oversee the transition process;

8. note that Bill No.1 will provide that the terms of serving NZRB Board members end when RITA is created;

9. note that appointments to the RITA Board will be made consistent with the State Services Commission’s Board Appointment and Induction Guidelines;

10. note that the Minister for Racing will consult the Minister for Sport and Recreation to ensure that the board of RITA includes a national level sport perspective;

11. note that the Minister for Racing will submit a paper to the Cabinet Appointments and Honours Committee on the proposed membership of RITA in time to enable governance arrangements to be in place for the intended establishment date of 1 July 2019;

“The RITA Board should be closely accountable to the Minister for Racing.”

A few weeks ago the codes were asked for nominations for the two positions. The Optimist is aware of who the two people NZTR put up for selection, both of which go to the races, have full industry knowledge, are currently in administrative roles in racing. Best not name them here in case they do not make the cut.

The alternative is that the State Services Commission criteria will dredge up relics from the past such as a retired judge or a long-standing public servant with a faultless record in everything but racing. It’s all been tried before, and it has always failed. And under SSC rules all committees or boards are gender equal which requires the two new appointees be either both female or one male and one female.

That makes it tough when the best single appointment the Minister could make would be to bring Messara himself into the fold. That doesn’t appear to be on the cards and nor does the appointment of either of his offsiders who were integrally involved in the revitalisation of Racing NSW including the person who wrote the legislation and made it happen.

Experience in wagering is what’s blatantly lacking in the current five, and a Messara could fill that gap. The legislation should be finished by now if we are to see the Racing Act of 2019 Part One passed by 30 June, and with no time for three readings, it may need to go through parliament under urgency. Should that not happen, then RITA cannot come into existence.

RITA is not the permanent board, though, as its lifetime is expected to be around a year. Once the approved Cabinet papers are transcribed into legislation, and the new ship is up and sailing, RITA’s role is over. With or without new personnel, RITA effectively then becomes Racing NZ.

RITA was created by the Minister to prioritise the Messara Report, and its 123-page Interim Report is testimony to the amount of work this committee has done since late December. That work continues unabated, and as we fast close-in on the end of May and move into June, more of the positives contained in the report will unfold.

One of the focuses of the Report in the Executive summary is the clear and warming statement, “Racing stakeholders must benefit from a new industry model – the industry has been living beyond its means, and for too long.”

It goes on to say in the very next paragraph, “The committee also wants to reverse the historical model where the stakeholders of the business get what’s left after the administrators have taken what they believed they needed to run the industry. The stakeholders can no longer be left at the end of the food train.”

If that statement is not verification of NZRB’s outlandish administration and wastage of industry funds, then what is? – it’s a Muhammad Ali-like combination of knock-out blows all in a few words.

The clue as to what will happen after July 1^st when RITA takes control is contained on page 123, the very last page of the Interim Report. It states under the heading of Establishing RITA: “Change will happen quickly…we are looking at a period of months, not years, to shift from the current structures and way of operating to the form and functions outlined in the Messara Report…”

At the top of a RITA four-point bullet-point list under that statement, the first line reads, “supports the Change Management Program.” which may be seen as a vital clue that RITA will make early moves to reduce the overheads with early management changes.’

In a brief statement to The Optimist this week, MAC Chairperson Dean McKenzie said: “MAC is on track to have the final report to the Minister by the due date, being the end of June. Until that point it is a work in progress, extending and updating the work plan and overall direction contained in the interim report.”

RITA will fast become polar-opposites with NZRB which is currently offering 15 new career positions on its website and recently employed a new General Manager of Technology at an estimated salary of $350,000 to $400,000 – the new appointee supposedly scheduled to be relocated from Australia with his family in July.

That’s what NZRB see as BAU (Business As Usual). On the other hand, it could be further evidence of an epidemic of that infectious disease known as Denialism which appears to be rife in the suburb of Petone.

Footnote:

The formation of a steering committee was undertaken at Karaka last week for the express purpose of establishing a publication for racing to fill the void left by the now defunct The Informant. That committee was to have travelled to Wellington for talks with NZRB about the integration of the new weekly with Best Bets. The meeting, for obvious reasons, has now been deferred until July when RITA takes the reins.

Paradox and planning in the story of star fillies

by Dennis Ryan
Written 4^th April 2019

In thoroughbred racing and breeding it’s never hard to find examples of the paradox that makes both pursuits so intriguing and unpredictable.

The latest telling example came in the Gr. 1 Vinery Stud Stakes at Rosehill last week when NZ-bred Verry Elleegant led home Frankly Awesome, a filly conceived in the United Kingdom and born in Australia. The origins of both are not the only stark contrast; the other is that Verry Elleegant was sired by Zed, a stallion who at the time stood at a fee of just $500, whereas Frankely Awesome resulted from a service fee at the other end of the global scale – £125,000 for the privilege of a mating with champion galloper Frankel.

On Saturday the talented pair will again go head-to-head in pursuit of the premier prize for staying fillies in this part of the world, the A$1 million Australian Oaks. In the same field will be another filly, Imelda Mary, who exemplifies the bargain basement theory.

That Ferlax filly cost trainer Wayne Hillis and fellow owners just $3,500 as yearling in the 2017 Karaka Festival Sale catalogue. Her domestic season ended by sharing the New Zealand Bloodstock Filly of the Year title with Queen Of Diamonds, a daughter of champion stallion Savabeel who changed hands when the China Horse Club’s Michael Wallace bid $640,000 for her at the same National Yearling Sale that produced Imelda Mary.

The back story to Verry Elleegant is one of putting faith in your own judgement and backing it all the way to the ultimate result. The key player is Auckland octogenarian Don Goodwin, who bred Verry Elleegant, formed a syndicate that placed her with South Auckland trainer Nick Bishara and has since seen her scale the heights to Group One glory.

Anyone privileged to reach 80 years of age has more than one or two interesting aspects to their lives, and Goodwin is no exception. He was born in the South Waikato farming district of Okoroire but grew up in west Auckland, in a state housing area of Waterview and on the same street as the Carter family.

“John Carter senior and I have been mates since we were kids – we were in the same Suburbs midgets’ rugby team in 1948,” Carter reflected in the days after Verry Elleegant’s Vinery Stud Stakes win. “As we grew up we were both keen on racing and John and I had the odd horse together, so it’s all gone from there.”

The name Carter was to become a household name in New Zealand rugby, via John Carter’s sons Mark and John junior. Both represented Auckland at senior level and Mark gained fame as a hard-hitting All Black open-side flanker in the 1990s.

Later that decade the Carter brothers joined forces with their sister Rachael to form Jomara Bloodstock and made a life-changing investment when they bought the well-bred young racemare Emerald Dream. By Danehill from the Cotehele House branch of the famous Eight Carat line, Emerald Dream hit the jackpot for her new owners by winning the Gr. 1 Whakanui Stud International Stakes at Te Rapa in 2002.

The trio subsequently invested heavily in Emerald Dream at stud, producing Zed and Zabene to her initial matings with Zabeel. Zabene went on to win at stakes level as well as finishing second in the New Zealand Cup, while even greater heights beckoned for Zed when he showed real promise at three.

Unfortunately an injury suffered in a transporter undermined those plans and he retired at four years with a single win from just four starts. Thankfully Zed was still a colt and the story of his unlikely start at stud has been well documented – a fee of just $500 at Little Avondale Stud until, after five years when his books began at 130 mores and dipped to 30, he was “exiled” to cover Clydesdale mares in the South Island.

That lasted only a year, as back on the racetrack Zed’s progeny were really standing up, resulting in a return north to Wanganui’s Grangewilliam Stud in 2013, when he covered no less than 168 mares at a fee of $4,000.

Don Goodwin was part of the Zed story from the start, taking an interest in the racehorse that was unable to realise his ability on the track before making it at stud.

“I went through the whole thing with the Carters and when he retired to Little Avondale I first sent an old Vice Regal mare I had, then I went looking for a younger mare with the bloodlines to match Zed’s.

“That’s why I bought Opulence – mating her with Zed would be double-up to Danehill as well as to Eight Carat through her daughter Cotehele House.”

Opulence, by Danehill’s son Danroad and tracing directly to Hall of Fame broodmare Eight Carat, cost Goodwin $14,000 when South Auckland trainer Nicholas Bishara offered her at the 2011 Karaka Autumn Mixed Sale. The winner of two races, she was carrying a service to Little Avondale stallion Towkay and returned to the Wairarapa stud for her date with Zed.

Her first foal by Zed was premature and died, and it wasn’t until 2014 that she produced a viable foal, the colt that became known as Verry Flash. That’s where Bishara re-entered the picture, having trained the Towkay filly from Opulence that Goodwin sold as a weanling and, as Black Lace, has to date won three times.

“When Nick ended up with the first foal from the mare I had bought off him, I figured he was still keen on the breed,” Goodwin explained. “This guy seemed interested so it made sense to me to give him Verry Flash to train, and then as it turned out the filly that followed.”

With Verry Flash already in work under the ownership of Goodwin and Bishara, Goodwin attempted to lease the younger sister but came up blank and ended up retaining a 50 per cent interest, with the balance taken up by a group that included Bishara and Black Lace’s part-owner Matt Duffy.

While Verry Flash was putting together a decent enough record, the filly known as Verry Elleegant proved an almost instant hit. As a late two-year-old she finished second on debut to the talented Cyber Attack and won her two spring starts – both NZB Insurance Pearl Series races – before the intensity of interest resulted in a change to her ownership group.

“Offers were coming from everywhere but we couldn’t quite crack it,” says Goodwin. “Then Mark Carter came up with a proposal that meant we could stay in her. Half an hour after her second win at Matamata in September – I was in the Winner’s Circle accepting the bottle of wine – and the phone went.

“It was easy in the end, the deal was done and look where we are now!”

The Jomara Bloodstock trio had the earlier experience of reconfiguring the ownership around their talented galloper Humidor, transferring him to then champion Victorian trainer Darren Weir and still being able to enjoy highs such as victory in the Gr. 1 Australian Cup and a tantalisingly close second to Winx in the third of the great mare’s four Cox Plates.

Verry Elleegant followed a similar route to Weir’s Ballarat stable, finishing third in her first start before winning the Gr. 3 Ethereal Stakes at Caulfield. When Weir was disqualified Verry Elleegant was transferred to Chris Waller and in three starts from those quarters she has won twice and finished second in the other.

Every step taken by the big brown has been positive, not only in actual form but also in the ringcraft she has acquired, culminating in a Vinery Stud Stakes win that stamped her credentials for Saturday’s Australian Oaks.

“The Vinery Stakes was great and now to be lining up as favourite in the Australian Oaks on the same day as Winx’s final race – we couldn’t have timed it better,” says Goodwin.

“We were at Rosehill with bells on and it will be the same again. If she wins that would be fantastic and all credit to everyone involved, but most of all Chris Waller.

“The way he’s pulled it all together just shows what a genius the guy is.”

Verry Elleegant inbred 4 x 4 to former Ra Ora mare Cotehele House

by Brian de Lore
Written 4^th April 2019

The pedigree of last Saturday’s Gr.1 Vinery Stud Stakes winner Verry Elleegant is fascinating for several reasons.

Firstly, she is inbred 4 x 4 on the tail-female line of both her sire and dam to the former Ra Ora Stud mare Cotehele House which was one of several mares purchased for the stud when Ra Ora became the first stud farm in the world to list on a stock exchange. Other studs afterwards listed in quick succession.

Inaugural General Manager of Ra Ora Stud Ltd Glyn Jenkins attended a sale in Adelaide and bought Eight Carat’s daughter Cotehele House relatively cheaply following Ra Ora’s public listing in 1983. The mare was by My Swanee, a son of the Eclipse Stakes and Champion Stakes winner Pieces of Eight who, in turn, was by Relic.

Cotehele House was bred to the well-performed home-based stallion Imposing in 1984 and produced a bay filly in 1985 which was subsequently named Chalet Girl. In those days Imposing stood at Ra Ora for a fee of $20,000, restricted to a book of just 65 mares, and was highly commercial and fully booked. But he didn’t always throw the best-legged horses.

He was a big chestnut, true to his name, very wide at the sternum but brushed his front feet at the walk and he threw that V-shaped front leg head-on appearance type regularly in his progeny. As a consequence, some of his progeny developed knee issues and had their fair share of bone chips.

For whatever reason, Chalet Girl did not get to the races but as the young broodmare was bred in Australia to the Sadlers Wells stallion King’s Theatre at Glenlogan Park Stud. The resultant progeny was Mulan Magic foaled in 1999. She won only one of her 17 starts but in 2005 produced Opulence from a mating with Danroad.

Meanwhile, back in New Zealand Cotehele House was obliviously procreating the reputation of the Eight Carat family. Two years after producing Chalet Girl she foaled a filly in 1987 by Sackford named Theme Song which would eventually become the grandam of the one-win Zabeel left-field sire phenomenon, Zed.

Theme Song without creating attention won two races in Sydney up to 1600 metres before embarking on her broodmare career. Mated to the incomparable Danehill, she produced the high-class mare Emerald Green in 1996 – the winner of seven races on this side of the Tasman including the Gr.1 Waikato RC International Stakes, the Gr.3 BOP Thames Valley Stakes and at Ellerslie the Listed Great Northern Challenge Stakes.

Theme Song has bred on strongly, not just as the dam of the stakes performed Special Bond and Mancini, but also as the dam of the unraced Military Plume mare Announce, grandam of the two highly acclaimed Northern Meteor sire prospects in Shooting To Win and Deep Field.

Here is the Eight Carat family in all its glory – and ironically now showing on the tail-female lines of both the sire and dam of our newest Australian Group One conquerer in Verry Elleegant. The strength of the family continues to shine through at periodic intervals

Consider Eight Carat’s success. Diamond Lover, Kaapstad, Octagonal, Mouawad, Marquise, and Cotehele House which produced five times Group One winner Danewin as well as leading sire Commands.

In addition to exceptional ability, the family invariably throws strongly coloured horses – in Eight Carat’s case most are black or dark browns. According to The Informant’s foremost breeding authority, John Richardson, this dominance is a trait inherited from that great sire of the past in Relic which is passed down through Eight Carat’s sire, Pieces of Eight.

Cotehele House was a dark brown or black with white socks and stripe down her face and was typical of the family. But her residence at Ra Ora lasted only until 1990 when Arrowfield Stud decided to dissolve its 20 percent stake in the public company by departing with the stud’s 33 best mares which also included Rolls – she had the mother of Encosta de Lago at foot and subsequently foaled Golden Slipper winner Flying Spur at Arrowfield.

Ra Ora had been performing in the top three stud farms in New Zealand for many years, but the loss of all the good mares effectively brought to an end its position as a commercial thoroughbred breeding operation. Nine years later it was dispersed and the land sold.

The Eight Carat family is now legendary but undergoing yet another revival through Verry Elleegant. So many great horses have come from it such as the multiple Group One winner Habibti.

Blood tells in the end – six dams back from Eight Carat along the tail-female line appears the name of Mumtaz Mahal, the Aga Khan III’s flying filly which became his foundation mare for a dynasty of great horses and one of the prepotent influences in thoroughbred breeding history.

by Brian de Lore
Published 17^th May 2019

Racing Minister Winston Peters delivered another piece of the racing industry jigsaw puzzle solution this morning at Karaka when he announced his government was repealing the betting levy for racing as part of Budget 2019.

In his speech to an attentive group of industry participants, he said: “As Messara pointed out, the New Zealand Racing industry could and should be performing at a comparative level to other jurisdictions – for example, as in Australia. 

“For this reason, the Government will repeal the current betting levy that is taken from racing and sporting gambling profits. By repealing the levy, this money will no longer flow to the Crown – it will instead be retained by the racing industry for the development of the racing industry.

“The funds will be distributed to the racing and sporting sectors, with part of the funds to be set aside to support a reduction in gambling harm initiatives. This is not small change,” emphasised Peters. “This levy represents four percent of betting profits, and in 2018, it amounted to approximately $13.9 million.

“The levy will be progressively reduced over three years until it is phased out entirely,” he said, but surprisingly his speech made no mention of either a synthetic or all-weather track for Cambridge or the personnel make-up of RITA which replaces NZRB on July 1^st. Those announcements are still pending.

Some racing pundits will be disappointed about the three-year phasing out time, instead of it coming back 100 percent immediately, but remember that all these concessions the Minister gains for racing require negotiation with Treasury with whom Peters has been seemingly fighting the 100-year war.

When Messara lobbied the NSW government for tax parity, it took him forever to get it, and even then, the tax concessions were phased out slowly over five years. But it was a landmark win for Racing NSW, and for his perseverance and guile, it was the part of the reason Messara received his Heroic Award, Member of the Order of Australia, and more recently Longines IFHA International Award of Merit. They are three of six big awards he has received – all for racing.

In New Zealand, we haven’t had the luxury of a Messara or a CEO of the calibre of Peter V’landys. But when examining the long-list of racing ministers, it can be safely said that Peters is the only one to have delivered significant tangible benefits, and he has done it in both his terms as Minister of Racing.

In his first stint, 2005 to 2008, he repealed a racing tax which had immediate benefits of $33 million annually and today continues to benefit the industry to the tune of $65 million annually. The tragedy of that gain is that most of the money has been used to mushroom the NZRB gravy-train rather than filter through to needy industry stakeholders.

Having read the Cabinet papers several times since their release over a month ago, it’s was easy to convince yourself racing would be getting more in this announcement than subsequently received. But that assertion was based on the number of budget-sensitive redactions over the three Cabinet papers which numbered 31, and then an overly optimistic reviewer.

Two years ago, Winston talked about the battles he had with Treasury over various issues for racing, and it appears to have been no different this time. In Cabinet Paper No 1 it seems evident that Treasury has little regard for the racing industry. Treasury was just one of many government bureaucracies consulted to complete the suite of Cabinet Papers which also included the State Sector Commission, Inland Revenue Department, Ministry of Foreign Affairs and Trade, Ministry of Health, Te Puni Kokiri, Ministry of Justice, Sport New Zealand and Ministry of Primary Industries.

Treasury came up with all sorts of hurdles and was negative. It talked about, “significant regulatory and financial implications for the Crown; the risks relating to greater gambling harms as a result of the proposals, including any wider impacts on wellbeing; the impacts on New Zealand consumers (gamblers), including whether they will face higher or lower costs; and the impact on the financial position of the New Zealand Racing Board.”

The last one is a beauty – indicating empathy between those two organisations. If you are worried about the financial impact on NZRB but are oblivious about the plight of the racing stakeholders then, “Houston, we have a problem.”

Politicians do deals to get things rubber-stamped and although no evidence has been put forth to suggest the Minister had to concede ground on getting the betting levy eliminated, the fact that it has to be phased out over three years suggests it was hardly likely to be in the Minister’s plan.

Quite the opposite. In the Executive Summary of Cabinet Paper 1, it talks about “the immediate need for supplementary revenue; an urgent need for reform; financial viability from a commercial perspective; and a requirement for bold and deliberate decision-making.”

The Minister understands the urgency for racing’s plight but knows, at the same time, the legislation to right the ship long-term is attainable only through cumbersome and slow bureaucratic processes. We are getting closer though – only six weeks away from the of Bill No. 1 coming before Parliament if MAC and DIA collectively keep to their tight schedule.

Consider the impact of the two Bills. With the collection of racefields and Point Of Consumption (POC) levy, $30 million a year will come back to racing – revenue not previously collected. Australia started mustering this tax in 2008, and that’s one reason we have been left behind – all having resulted from the work of people like V’landys and Messara.

Add to that the savings derived from outsourcing the TAB and its subsidiaries such as broadcasting – a further $70 million a year. Total $100 million back to the codes above what they were getting and the feasibility of Messara’s claim of doubling stakes becomes a reality.

That doesn’t take into account the massive up-front, lump sum fee at outsourcing negotiation time, which is money that could go back into badly needed infrastructure upgrading of facilities at racecourses.

To manage it correctly requires a fundamental change of thinking at an administrative level; a more business-like approach which has been AWOL at NZRB.

Whatever happened to the plain, simple logic of good, sensible business practice? The two components of income and expenses. If your income exceeds your expenses, then you make a profit. If the income reduces for whatever reason, the most controllable component in business is the expenses, and so you cut your cloth accordingly.

That basic rule-of-thumb is unknown at NZRB. The decline in profit has coincided with increased expenses, and it’s been going on for a long, long time. It’s called ‘denialism’ which is a psychological condition of human behavior.

Denialism is when a person or group of people avoid reality as a way to avoid a psychologically uncomfortable truth. It occurs when a seemingly intelligent and sane adult vehemently denies truths despite a body of irrefutable data. That’s what’s been happening at NZRB.

It’s either denialism or when you have no skin in the game you just don’t care. Take the recent round of NZRB Industry Conversations, as they have been calling them, as an example. Last week it was Hastings, and next week it will be Riccarton.  The salaries of the three executives involved probably totals $1.2 million or around $5,000 a day. Auxiliary expenses such as airfares, transfers, lunches, dinners, accommodation if required, and anything else, could easily bring it up to $8,000 or $9,000 per day.

They are preaching for little over an hour to a mainly elderly group of around 30 people, half of whom have come for a cup of tea and sausage roll FOC. The other half are mainly retirees with a genuine racing interest – few trainers or working participants can get along in the middle of the day.

The question is, what quantifiable return is racing to get for this expenditure – the algorithm to measure it doesn’t exist – this industry needs a ‘nonsense to nonagenarian’ meter – it would have gone off the scale!  As well, no apparent concern about the wastage of industry money is in evidence from either the protagonists or the dozing nonagenarians.

The culture will be changing, though. RITA will get the Messara Report done and dusted inside a year, and when that happens, the industry will have a spring in its step that’s been missing for years.

Racing’s livewires ‘Boys Get Paid’ will be out in force making their presence felt and redefining the standards for the enjoyment of racing – Luke has posted his debut blog here on this site today and will regularly contribute as we wait and hope for the emergence of a new racing weekly. Onwards and upwards.

by Brian de Lore

New Zealand Racing Board CEO John Allen appeared to be in denial of the impending derailing of his ever-fattening gravy-train when the evangelistic pied-piper of racing-spin pulled into the Hastings platform this week for another round of preaching to racing’s unconverted.

But from all reports, few if any of the 30 or so Hawkes Bay participants that turned up to witness Allen’s arm-waving dissertation at Hastings Racecourse went away convinced. Why would they be after being told ‘the racing industry needs to tell its stories better to gain wider support.’

Irony, indeed, when you consider the very vehicle that was conveying all the stories, The Informant, folded as a direct result of Allen and his mean-minded executives denying the ‘racing-form’ to the weekly paper which resulted in the form coming from Australia at considerable cost. In a marginal business, it made all the difference.

All in the cause of promoting the money-burning Best Bets which has reputedly seen its circulation decrease from around 3,500 to 1,500 in the ownership of the NZRB. A very peculiar set of circumstances when one considers The Informant’s ‘form guide’ could only have been enhancing TAB turnover well before lessening the sales of Best Bets.

“Best Bets can be purchased in only two outlets in Hastings,” well-known breeder and racing identity Lucy Scoular told The Optimist the day after Allen and his highly paid coal-stoking executives had shunted out of town. “The two places are a dairy on the outskirts of town and the TAB – that’s for a population of 60,000 people,” added Scoular.

Like so many other towns in rural New Zealand, the lack of an easy to purchase printed form guide is hardly the formula for successfully retaining yet another diminishing swathe of older generation punters; many of whom have dropped out since the demise of The Informant – racing may never get them back.

But Allen is oblivious to such things and deflects the blame squarely back onto racing; after all, racing people should have told their stories better to get wider support. Also, over-the-head of Allen would have been trainer John Bary’s question to him.

He asked: “What were you doing on Christmas Day.? My family and I had to muck-out 30 boxes twice on Christmas Day because I couldn’t afford to pay staff time and a half.”

“During the two-hour meeting,” continued Lucy Scoular, John Allen told us the new board wouldn’t be any better than what they have now. “We all went along wanting answers – owners, trainers, and breeders – but we didn’t get any answers.”

Anyone who has ever read Ernest Hemingway’s novel, The Sun Also Rises, may recognise a quote that could be attributed to Allen’s travelling from town to town with his road show. It goes: “you can’t get away from yourself by moving from one place to another.” 

Allen was employed by the NZRB about four years ago, but all that must come to an end in seven weeks when the NZRB ceases to be an entity and is replaced by the Racing Industry Transition Authority (RITA). Hallelujah!  Not long to wait now. It means that Allen will cease to be responsible to the people who employed him, not that he ever seemed to be, and he should tender his resignation now, and disappear by the time RITA arrives. It would be his finest decision.

NZRB has employed a succession of disastrous CEO’s, and without knowing which has been the worst, it’s fair to say that Allen is right up with the best of the worst. Why am I attacking him again? Because until this industry we know as racing and breeding looks itself in the mirror and takes responsibility for its actions, admits its mistakes, gets some balls, and promises never to be so stupid again, it will continue to repeat these disasters.

Good riddance to the old board; RITA will be the new board, albeit a temporary one, and despite all the new legislation and the ‘blank sheet of paper new beginning’ that John Messara foresaw the industry needed, the future success or failure of racing in New Zealand will be in the hands a just a few people. Messara has always said, personnel is everything; one person can change the world.”

The Optimist wasn’t an attendee at Hastings Racecourse, but it’s safe to say Allen would not have been apologising to the industry for introducing a failing Fixed Odds Betting Platform amid industry protestations at the cost of $50 plus million. He would not have been apologising for collecting an annual salary which has risen to $680,000 despite having zero industry knowledge when appointed four years ago – basic commonsense ignored but, nevertheless, a recurring lesson to be learned.

He would not have been telling the group that $60 to $70 million was available in annual savings by outsourcing the TAB to Tabcorp – a figure largely agreed upon by Deloitte, Investec and Messara; or that the FOB to work requires 245 never to be made changes; or that NZRB will miss its 2018-19 budget by about $25 million; or that despite the tangible capitalisation of the FOB, it might be worth nothing overnight.

Neither would he have talked about the declining horse population which even if stabilised wouldn’t be a great outcome; or that they lost the game two years ago when Australia legislated against its resident population betting on the NZ TAB, and 800 accounts went west; or that we don’t co-mingle the trifecta pools with Australia because some VIP customers get rebates as high as 21% in an effort to keep turnover up; or that 400 to 500 people will have to be let go at NZRB to keep racing’s 60,000 full-time, part-time and volunteer participants in the game.

But wait, there’s more!: NZRB has initiated the Audit and Efficiency Report which is required this year under the Racing Act of 2003. But because the NZRB is still in place, and officially steering the ship, it will be a soft report.  Half of the Australian fields are missing from the Best Bets. VIP and Elite customers have deserted the ship and getting them back will be difficult.

Minister Winston Peters new legislation will be the industry’s saving grace, but its effectiveness is still limited to the quality of the people appointed to operationalise it. Revenue will flow from new streams such as racefields which MAC has redefined in its 123-page Interim Report as a ‘Betting Information Use Charge,’ and a Point of Consumption tax for overseas operators.

In this month’s budget which the Minister will address with some pre-budget day announcements at next Friday’s Karaka Mixed Bloodstock Sale, a repeal of the betting levy worth around $13 million annually is almost a certainty.

But in the three Cabinet papers written and approved last month, totalling 45 pages, the number of redactions earmarked ‘budget sensitive’ is more than 30 – suggesting racing may be getting more than just the betting levy back, although it has been said that some may relate to comment from Treasury.

Last week Peters said: “Due to the comprehensive and detailed nature of budgets which has been the case for decades now, there will be budgetary announcements made before the 29^th of May.” – he needed a venue for those announcements and has decided on Karaka.

MAC Chairman and likely candidate for RITA chairman Dean McKenzie told The Optimist this week: “The progress of the bill is on track, and MAC had a meeting this past Tuesday, and from that, we have updated work plans to the end of June. Everything is going along as planned, but that doesn’t mean everything will be finished by the end of June.

“Several work streams will go past June. Outsourcing is the obvious one – it’s one of the lengthiest –  as it should be because it’s also one of the most important, but we have already stated that previously.

“A lot of work has to be done before July 1^st because when RITA takes the seat, it will have a work-plan from MAC – what has to be changed to advance, and the change aspects of Messara’s recommendations. RITA will have a BAU (business as usual) agenda and then the Change Management plan, the reform plan that MAC has been working on based on the Messara Report recommendations – updated to a work plan that shows where it is, and what still needs to be done.

“June 30^th is a Sunday, so our target date is June 28^th for MAC’s final report to the Minister.”

With maximising revenue for racing a pre-requisite in the Messara Report, and the potential for outsourcing to provide a windfall for racing upfront, McKenzie said, “The sub-committee for outsourcing (RIOEC) is progressing along the lines stated in the interim report. We are trying to get the process right because you can’t get to the end of the process and be worried about the result.

“Because if the process is right, then whatever the result – whether you do or don’t outsource – you are confident all the boxes have been ticked along the way, and whatever the decision is,  it’s the best one.

“Betting Information Use Charge – better terminology for racefields,” continued McKenzie. “MAC prefers that terminology – it describes it better. It’s the information used for betting – and you charge for it. It’s in all our documentation.”

On the question of Section 14 of the current Act and the future distribution of funds to the codes, McKenzie said,  “What MAC has focused on for the industry is making sure we have got revenue for the industry, as soon as we can, and only then are we progressing  – given the tight time-frames within which we are working.

“Only then can we move on to how we distribute it – the simple logic is that if you haven’t got money then no need to worry about how you distribute it. Grant-Thornton has been engaged to do some work for MAC.”