DIA takes racing admin to new levels of incompetence

by Brian de Lore
Published 24th March 2021

Events of the past couple of weeks and particularly the conduct of Internal Affairs (DIA) has blatantly reemphasised the Government’s lack of administrative competence and complete absence of know-how to act in racing’s best interests.

The DIA’s handling of the appointment process for the board of TAB NZ makes Fawlty Towers look like a hotel with a seriously good management plan.  Last week they undertook to send out four emails to the 42 applicants – two with gross errors and the other two to recall those emails.

On March 18^th, two months and three days after applications closed and four months after the specifications for the appointments were written, the DIA’s Senior Policy Analyst Glenys Robinson wrote to the 42 board applicants outlining new criteria of knowledge and skills and also requiring short answers to a series of questions.

But the first stuff-up was the email was sent out in only draft form with corrections and redactions showing. After recalling the emails, the next email sent to the applicants was supposedly blind copied – but they weren’t. The names of all 42 on receipt of the email were immediately made known to each other.

The surprise is the inclusion of Liz Dawson on the list of 42. She’s on the RITA board as well Chair of the board selection panel for the new TAB board – an overt conflict of interests if she, indeed, is in a position to recommend herself to the Minister.

…the DIA having already leaked the names…

With Glenys Robinson and the DIA having already leaked the names, The Optimist was tempted to reprint all 42 here, but out of respect to the half dozen or so applicants in racing known to the writer, that temptation has been resisted.

The gender break-up of applicants is 32 men and ten women. And gender and ethnicity are sure to factor in this appointment process as all Government boards and committees in the now PC world of parliament and the civil service departments demand a minimum gender representation of 30 percent.  

A significant percentage have come through the Institute of Directors and seemingly are mercenary non-racing people looking to enhance their income. At the same time, another large group is made up of sportspeople, perhaps looking to strengthen the presence of sport inside the TAB.

Since this appointment process commenced, the DIA, in its usual manner, has demonstrated its predictable inability to add value to anything they do on the racing front. This sorry band of over-paid civil servants continues to bumble their way through an enforced takeover of racing through the ‘virtual administration’ of the TAB, which Racing Minister Grant Robertson confirmed in a statement he made to Racing News, published on March 17^th.

Robertson said: “The process to date has yielded some good candidates, but the selection panel has recommended that I broaden the search, and I agree. This is a significant decision for the future of racing in this country and I am determined to get it right…this does mean there will be a delay.”

…the DIA still rejigging the criteria to appoint the TAB board

No one in racing would disagree with Robertson’s sentiment to get it right, but does he need a reminder it’s almost nine months since the legislation became law? It’s also three years since the Messara Review was written, which stressed ‘urgency,’ and here we have the DIA still rejigging the criteria to appoint the TAB board.

The three things universally known about the DIA are (1) they have zero racing and wagering knowledge, (2) don’t care about racing or its current state of decline, and (3) work only at glacial movement pace in anything they ever do. Now we can add (4) – the inability to perform the simple task of sending an email without franking a ‘recall’ notice on it – twice in a couple of days.

The fact that it’s taken more than two months since applications closed to realise the 42 as a group doesn’t cut the mustard is an admission the process established to put this board together was flawed from the start.

Instead of consulting the best racing brains in Australasia on how to go about this task and commence shoulder-tapping and hand-selecting the correct people, the DIA has instead done its usual thing, floundering in its own ignorance and coming up short again.

In the Racing News story, Robertson said: “I expect each member of the board to have the expertise, including fiduciary and commercial experience, to enable a bright future for the racing and sports sectors.

“Candidates need not come from within the industry, as has generally happened in the past, and I’m asking the racing codes to nominate candidates with the skills and experience to ensure best governance practices.

“This is particularly important given the $72.5 million Racing Industry Support package” – Racing Minister Robertson

“This is particularly important given the $72.5 million Racing Industry Support package,” continued Robertson, “put forward by the former Minister for Racing, which is a considerable investment by the Government.”

The Robertson quote indicates racing is about to experience ‘groundhog day’ and get more of what we’ve had in our under-performing administrative past. No mention in this story of candidates requiring a deep racing knowledge with experience in wagering, which is what was blatantly lacking in the last half dozen years of NZRB governance.

The Robertson quote also reminds the industry of the enormity of the Government bail-out of the TAB last May, which in the Government’s view, places the TAB firmly in its grip (virtual administration), and which somewhat neutralises the devolvement of power to the codes that came with last June’s new legislation.                                                                                   

As was the case with Peters, Robertson’s problem is he’s time-poor for racing and will rely on faceless advisors to steer racing policy. It didn’t work with Peters and won’t work with Robertson.

Administratively speaking, we are as badly off now as we have ever been and potentially worse off by the time August arrives, and the DIA at its full-speed-ahead snail’s pace, announces this new board.

DIA: Appointments to the Board are expected to be made by August 2021

Why are they taking so long? In the addendum to the Candidate Information Sheet, which went out to the 42 applicants, it states: “Appointments to the Board are expected to be made by August 2021 (to be confirmed).”

It also mentions wagering and gaming governance in the addendum, but not as an absolute requirement in its 12-bullet point requirement set out under ‘Skills and attributes sought.’

The ‘to be confirmed’ proviso is ridiculous. Even without a further delay beyond August, the late announcement will determine the unlikelihood of seeing a cohesive TAB board operating before Christmas, given the time it will take for seven people to familiarise themselves with each other and develop a strategy going into 2022.

Reliable sources have whispered the selection panel requested both the Greyhound and Harness codes each submit new nominations in place of the unacceptable Stephen Henry (Greyhounds) and Shaun Brookes (Harness). Both codes have reacted in the most negative way possible.

The two codes arrogantly resubmitted both Henry and Brooks in an unbelievable display of defiance and disrespect towards the panel, the process, and the Racing Act of 2020.

…money that belonged to heartland racing people, which went down the drain

Most will be aware that Greyhounds CEO Glenda Hughes, and new Harness CEO Gary Woodham, along with Henry and Brooks, were all part of the NZRB team that built the FOB platform. They were all party to approving the ongoing commitments to Paddy Power and Openbet, which has cost the racing industry an estimated $200 million – money that belonged to heartland racing people, which went down the drain.

All four names were belatedly given ‘the shove’ for very good reason, and genuine supporters of those two codes along with the thoroughbred code should be appalled that these people haven’t been warned off all racing involvement –  instead, they are like a bad smell that won’t go away, and are now trying to bully their way back into TAB governance.

Remember, we are only two years down the track from switching on the FOB platform. As Chair and part of the executive team, these four condoned the ongoing $17 million/year commitment to Paddy Power (5 years) and Openbet (10 years), which are binding contracts.

From all accounts, the only way to get out of the contract with the software providers, Openbet, is to write them a cheque – a huge cheque. And this will most likely happen because there is an inevitability about partnering the TAB, which is the only path available for increasing the income and reducing outgoings for a sustainable racing future.

Henry and Brooks won’t survive this arrogant second attempt because the Act says: “The Minister may veto a nomination made by the racing codes under subsection (1) but, if the Minister does so, the codes may make 1 or more further nominations until the Minister and the codes agree on the nominee.”

…NZTR now control the thoroughbred racing IP…

NZTR, as usual, has remained relatively quiet, but something is in the pipeline, and information suggests an announcement will occur in May with stakes money connotations. The trump-card held by NZTR is they now control the thoroughbred racing IP (Intellectual Property), and there’s nothing to stop NZTR from negotiating with an international wagering operator.

The codes getting back control of their IP was the biggest win of the Racing Act 2020. At the February/March 2020 Select Committee hearings at which almost 100 people delivered oral submissions, RITA Exec-Chair Dean McKenzie in delivering his submission, was alone in his stance against the IP returning to the codes.

Fortunately, he failed. NZTR now has the facility to make headway in the foremost requirement to increase prizemoney. In the last couple of weeks, field sizes have started to decrease, which is symptomatic of fewer horses in training. When field sizes reduce, so does betting

The annual income received from racefields or Business Information Use Charge (BIUC) is currently running at around $10 million, but it has the potential to reach $20 to $30 million pa, and if NZTR can sell a good deal on the IP, an increase in stakes money is not out of the question.

The previous blog published here highlighted the continued decline of the ratio of available stakes against the rising costs of racing horses in New Zealand. The monetary stats demonstrated the viability of racehorse ownership had decreased annually and would further decrease without drastic changes.

Increased TAB profits generated in the COVID year have been retained with no extra money returning to owners and stakeholders. NZTR argued retention was necessary due to the need to avoid last year’s situation when stakes money was received in arrears and owners were late paid.

“Every time we talk about how well turnovers are doing, it seems to generate an immediate cry for the need to increase stakes across the board.” – Bernard Saundry

In ‘Note from Bernard Saundry’ which appeared about three weeks ago in an edition of Raceform, Bernard wrote: “Every time we talk about how well turnovers are doing, it seems to generate an immediate cry for the need to increase stakes across the board.”

It’s as though NZTR is reluctant to confront the only issue that foremostly matters for the future sustainability of racing, or alternatively, the relative prosperity of the industry we jealously view in Australia, where they race for far greater stakes money.  

Racing needs not only a good TAB NZ board but also the current NZTR board to step up and make a splash in the interests of the poverty-stricken participants they represent.

The drawback at NZTR is having a chair residing in Australia and a CEO who has one foot in the departure lounge at Wellington airport – Bernard Saundry’s contract finishes mid-2022.

How do you get dynamic performance from that situation?

The Racehorse Owners’ Association has now written to NZTR officially requesting that Cameron George resign his Chair position.