by Brian de Lore
Published 6 September 2019
The month of September is the first anniversary of the Racing Minister’s Claudeland’s release of the Messara report where Peters, in his speech, said, “I know a dead horse when I see one,” in obvious reference to the NZRB.
But everyone in racing knows the horse isn’t dead; far from it! The despised steed is in a paddock of clover and still regularly has its snout in a trough full of nutrient-rich Dunstan’s Pasture Plus.
On the night of that speech from the Minister, NZRB Chair Glenda Hughes remonstrated with Peters immediately after the meeting’s conclusion, but here we are one year later and Hughes is still in the Jackson Street, Petone building as CEO of Greyhounds NZ.
CEO John Allen and his band of merry henchmen also remain in the building and will have new business cards in their ever-fattening wallets with the metamorphising of NZRB into RITA the only discernable change. Have a close look at the table below and comprehend that these are the very people that have guided this industry into a shortfall of around $27 million required for code funding in this current season.
In a public company environment the shareholders would be demanding blood. The CEO and Chief Financial Officer would both be down the road in quick time – remember that this result is all about poor governance and lack of foresight and consultation with the industry on a substantive scale.
The profit against budget looks to be down in the vicinity of 19 percent. Gaming is the only figure that’s risen, but overall the actual against budget are poles apart. That’s how misguided the building of the FOB has been with its $17 million in running costs payments to Paddy Power and Openbet. All advice against doing it including a Deloitte Report which stated it was the path to penury fell on deaf ears.
Interestingly, the budget for 2019-20 would typically be out in July/August along with a Statement of Intent, but to date no sign of it. Surprisingly, though, RITA announced that current stake levels would be maintained which by the above calculation would require a racing profit of $151 million – not $124 million.
The total profit, including the growth in gaming of $140 million somewhat camouflages what will be a lamentable result for racing. McKenzie has already said that maintaining the stakes level will be a challenge – climbing Everest in bare feet could also be described as a challenge.
The Allen appointment was a monumental mistake in the first place, and he has cost the industry tens of millions. But we are keeping him – go figure that one out. Last year’s outgoing NZRB board who were due for retirement in July, but stayed on for another year at the Minister’s behest, apparently renewed his contract for a further three years and it will cost $2 million to sack him.
Why would an outgoing board go and do that? Where is the accountability for a board that has clearly failed in both employee appointments, the industry’s strategic plan and its failure to comprehend, consult, and alter the direction of an ailing industry?
The slash and burn transition the industry needed is not happening. Change is slow and cumbersome and is ignoring Messara’s advice in his review on ‘urgency’ and is at odds with his introduction to Part One of the Review when referring to the challenges by saying, “…which protects and enhances the financial welfare and livelihoods of the many thousands of persons involved with the racing industry.”
The softly, softly approach is not endearing to the thousands of participants who are falling further behind with every passing month. The collective returns to owners the Messara Report calculated to be 22.9 percent in the 2016-17 season, compared to NSW at 48.1 percent, have fallen further behind. With rising costs, would it be a surprise to discover they are now around 20 percent?
The Minister always said, through his electioneering and post-election, the owners are the most important people in racing and need much higher stakes money. Two years ago he said it was urgent, but instead of maintaining the off-the-bit full gallop momentum of the Messara Report he has eased his charge down to barely a trot.
NZ First Chief of Staff and political scientist Jon Johansson told me a few months ago the Minister spends two hours a week only, on racing, and that if the portfolio requires more time, then something must be going wrong. I interpret that to mean that Johansson is the one conducting the orchestra and there has to be a triangular degree of cooperation between he, RITA and the DIA for this thing to move forward at any pace.
The result is a bureaucratic process that has no feel for racing’s plight. RITA will understand but is between the rock of Johansson, and the hard place of the DIA and has constraints in the terms of reference which clearly states the Minister is in charge of every decision made, i.e., Johansson.
It’s the antithesis of what occurred in NSW when after years of continuous lobbying the state government, the powers that be, gave John Messara the mandate to go and fix the problem. He as Chairman and Peter V’landys as CEO went and did just that which resulted NSW becoming the most successful racing jurisdiction in the world. They didn’t conduct reviews and form investigative sub-committees; like Nike, they just did it.
On September 3rd, RITA Chair Dean McKenzie issued an update on the progress which sounded more like a justification for the bureaucratic pace of change more than anything else. It talked about only having existed for 60 days, the complicated process it faced, a more sustainable structure, the JCA, the RIU, harm minimisation, responsible gambling, the betting levy, off-shore charges from 2020 and industry discussions.
The update did not talk about the most critical issue contained in the Messara Report which is the outsourcing or progress of partnering the outsourcing of the TAB which could save the industry $50 million to $70 million in costs. It did not talk about the goal of doubling the stakes money but only a more sustainable structure. It reeked of DIA influence and would not have left stakeholders doing a jig after reading it.
The critical thing about this process is the involvement of the DIA. Because that body is the designated authority, it is taking forever to get the agreements in place with overseas betting operators and collect the Racing Information Use Charges (racefields) and Point of Consumption (POC) levies. They were asleep at the wheel for six months and should have had everything in place when the legislation went through on July 1st.
The rates have still yet to be set or at least announced. The only collection of levies has been the voluntary contributors who are known to be Tabcorp and Sportsbet.
DIA’s level of inactivity is costing the codes hundreds of thousands of dollars monthly. Why the Minister appointed DIA and not the codes is a mystery – the money belongs to codes, and they should have been allowed to set it up and manage it instead of this government interference.
Racing in New Zealand has also suffered significantly through the lack of a publication since the demise of The Informant six months ago. Sorely missed is the loss of both a decent form guide along with the information-flow through the editorials, and this impairment must have effected betting turnover.
NZRB was in part responsible for the loss of The Informant by denying the use of the form which added another $100,00/year to The Informants costs, and now, under RITA, they are proving to be the stumbling block again in a plan to overhaul Best Bets and make it into something worthwhile.
It’s hard to understand why unless no news is better than getting the truth out, exposing the incompetents and the freedom of expression. Could the reason be that cynical – surely not?
