by Brian de Lore
Published 28 June 2019
Counting down to the cusp by definition means something is nearing a point of transition between two different states.
That’s where racing is today; on the cusp and nearing the point of transition from NZRB to RITA. Monday is the day, July 1st when the industry undertakes a paradigm shift in every aspect of its being.
And that means administration, income streams, repeal of taxes, implementation of a change management plan, initiate TAB outsourcing negotiations, governance structure planning, establish Racing NZ, establish Wagering NZ and most of all in the broader sense of the meaning, run racing for the stakeholders and not the administrators.
The above more-or-less summarises what John Messara foresaw in his review for the future of New Zealand Racing and what Minister Peters has planned in acting upon that review. The Review was Messara’s baby, and RITA is the Minister’s.
Messara knew what to do, and Peters knew how to execute it. For most stakeholders, the changes have seemed very slow in coming for the simple reason that the industry has been ailing for so long. Racing has been losing ground forever without anything being done to curb it – all that changes on Monday.
Two years ago before the last general election, Winston told this writer: “The racing industry can expect that nothing is going to change unless they themselves change.
“They can’t go on expecting a serious change in the policy unless they are prepared to work for it and vote for it. You need to ask the racing industry ‘do they or don’t they want a change?’
“The idea that they are going to get something without doing anything in return,” continued Peters, “does not work in modern day politics. In short, all I’m asking them to do is get out amongst their membership, professionals, vets, trainers, jockeys and the whole hundred yards and heavens-sake organise themselves and ensure they vote the right way.”
That lecture apparently worked because racing did vote for Winston Peters and NZ- First – 30,000 racing votes that were instrumental in NZ-First getting over the line and to the Coalition negotiating table to which Peters kept his word by taking the racing portfolio with him. So many traditional National voters in racing abandoned that Party after nine years of nothing for racing and jumped onto the Winston bandwagon.
Two years later the Racing Reform Bill No.1 is about to become a reality, and the industry would gladly have a midwinter celebration if it only had enough money left for a round of drinks.
In a chat with Simon Bridges during the week, the Leader of the Opposition admitted that National had largely neglected racing during his party’s nine-year term in government between 2008 – 2017. He conceded that between John Key and Bill English, little or no consideration was accorded racing and that Bill English was anti-racing.
When suggested to Bridges that although racing was now less than one percent of GDP, National had underestimated the racing-vote swing against his party and only a week after the election he had acknowledged that underappreciation when he with other MP’s paid visits to studs in the Waikato, he once again agreed.
National’s attitude towards racing was evident less than 12 hours before the commencement of voting in the 2017 election when they only then produced their first ever Racing Policy. As well, it was a flimsy last-minute document that said nothing – little wonder the racing vote went against National.
The Labour-NZ First-Greens Coalition gave racing its only hopes of survival. The alternative under a fourth term of National was a further degeneration to the extent seen in both Germany and Italy. These once proud racing nations are down the drain compared to Ireland and Australia which have strengthened but only after government support.
Federico Tesio, the genius of Dormello and great Italian breeder of such world-class phenomenons as Nearco and Ribot – two undefeated champions on the racecourse that had a world-wide impact on thoroughbred breeding – epitomised Italian racing and breeding.
Tesio died in 1954 aged 85. He left a great thoroughbred legacy for the world but gradual decline over many years in Italy has finally resulted in the European Pattern Committee this year stripping the boot of its last remaining Group One race which was run in November 2018.
The Lydia Tesio for three-year-old fillies over 2000 metres in 2018 was won, ironically, by former Italian trainer Luca Cumani – his final Group One success before retirement. The race was the last of nine Italian Group One races that had lost their status in the previous 12 years.
In an article written by Italian journalist Carl Di Lorio that appeared in Racing Post and on Racing.com earlier this year, he said ‘Italian racing has lurched into further crises.’
He also quoted winning and retiring trainer Luca Cumani as saying, ‘There doesn’t seem any chance of light at the end of the tunnel until the administration of Italian racing is changed and placed in the hands of racing people, as opposed to bureaucrats.’
New Zealand racing stakeholders which number in the 55,000 to 60,000 estimate when full-time, part-time and volunteers are all taken into account, should have little difficulty relating to the Cumani statement as NZRB has been overloaded with non-racing bureaucrats for many years.
The Minister devised a plan to fix racing’s woes, and he must take the credit for getting it to this stage because his methodology didn’t escape plenty of industry criticism. In that pre-election interview, he gave a clue in suggesting he would be doing it his way and not taking industry advice.
He said: “I’ve talked to a lot of people in the racing industry, and some of them think they know the business of politics, but they don’t. I probably don’t know as much about horses as I could know, but I seriously know a whole lot more about politics than they know.”
The know-how the Minister speaks of is now bearing fruit in the form of the Racing Reform Bill No.1 which kicks off a 12-month plan under RITA’s management with Bill No.2 to be in place by year’s end and the full metamorphosis of racing to be completed, less venue closures, by around this time next year.
Ignoring the more contentious issues in the Messara Report – the all-weather tracks, the reduction of venues and the divestiture of race club property and assets to the codes for the benefit of the industry overall – the immediate benefits from July 1st should be gained mostly from income from racefields and the POC (Point of Consumption levy).
The legislation in Bill No.1 with racefields requires overseas betting operators to have obtained permission from the designated authority (DIA) or their delegate before they can publish race fields from New Zealand after July 1st. In theory, they will have entered into a contract to pay a percentage (around two percent) commission on turnover back to DIA for distribution to the codes.
RITA has renamed racefields as Betting Information Use Charge (BIUC). The POC is a levy on bets placed by New Zealand-based punters on overseas betting agencies. The rate set by the Minister could be around 10 percent, all of which will come back to benefit racing and sports in New Zealand.
No one knows how exactly how much income it will yield, but estimates by some industry accountants are saying between $1 million and $2 million per month.
In New Zealand, we are getting a much better deal on the POC levy than any state of Australia. Every dollar collected will come back to racing and sports compared to NSW which returns to racing only 30 percent of monies collected with the government pocketing the rest. Worse still is South Australia which set the levy high at 20 percent with all monies retained by the government.
The deal for New Zealand is excellent, and along with a negotiated up-front fee for outsourcing and savings of $50 million to $70 million annually in costs, once an outsourcing arrangement is in place, the industry is well on the way to doubling prizemoney as specified in the Messara Report. With everything in place and self-determination devolved to the codes, transparency of operation should follow automatically.
Lack of transparency and accountability to the stakeholders has been one of the bugbears of the industry since 2003. Not only does the flow of information require vast improvement, but the accuracy of it also needs serious attention.
Consider the following which CEO John Allen posted on the NZRB website this week: “ The outgoing Board are leaving the organisation on a strong footing, equipped to be able to deliver increased returns to the industry on the back of a competitive betting platform, solid technology and world leading presentation of racing content.”
It got more Alice in Wonderland-like in the very next paragraph when he continued: “Finally, we are currently working through our Statement of Intent, which outlines the strategic direction for the organization over a three-year period and includes a discussion of the outcomes being sought by the main priorities for the three years ahead.
But wait, there’s more: “We will be working with the new Board and Codes to finalise this over the coming month or so. Once this is complete, I will embark on another series of industry conversation and look forward to seeing as many of you as possible around the country.”
Having been fed volumes of such NZRB fiction over many years, RITA now has an opportunity to treat the stakeholders with the respect they deserve and initiate a policy of full transparency and accountability that should continue through to Racing NZ and Wagering NZ.
Today (Friday, July 28th) is the day the MAC’s final report is due to be delivered to the Minister. Its adoption should be a fait accompli and from Monday racing can commence a journey down the path of greater prosperity.
