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 29th 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 1st 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 30th is a Sunday, so our target date is June 28th 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.”
