Betting levy repealedRacing
Opening of Karaka May Sales
Betting Levy Announcement
“Progress to revitalise the racing industry”
Good morning everyone.
It is a pleasure to be with you all here today to open the 2019 Karaka May Sale.
The 240-lot catalogue being offered is a further showcase of New Zealand’s premier thoroughbreds.
My advice for the buyers at this auction is to bid hard and high.
In front of you is an excellent selection and without doubt future stake winners will emerge from these sales.
Progress has been made to revitalise the racing industry
The sales also coincide with the Government taking steps to help New Zealand’s racing industry achieve its full potential.
For this reason we are taking the opportunity to make a pre-Budget funding announcement.
As you will know, many of the recommendations in the report written by John Messara were formulated to address the racing industry’s immediate need to boost revenue to ensure its long-term financial sustainability.
Without a significant boost in revenue, the racing industry will at best remain static. This cannot be allowed to happen.
As John 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 reduction in gambling harm initiatives.
This is not small change. This levy represents 4% of betting profits and in 2018, amounted to approximately $13.9 million.
The levy will be progressively reduced over three years until it is phased out entirely.
Making this money available will provide some much-needed financial relief and immediately increase revenue for the racing industry.
Repealing the betting levy, and changing the bloodstock tax rules in last year’s budget, are important measures to generate revitalisation.
But they are only preliminary steps. There is still more work to be done to herald structural change and address other financial streams.
Other funding streams and structural change
As a consequence of the Messara report, and work undertaken by the Ministerial Advisory Committee, the Government recently announced two pieces of legislation to transform the industry.
Due to become law by 1 July 2019, the first Bill proposes to transform the New Zealand Racing Board (NZRB) into the Racing Industry Transitional Authority (RITA) to drive the necessary changes to the industry.
RITA will continue to exercise the business-as-usual functions and powers of the NZRB, while also overseeing the change management process.
This Bill will also deliver some further financial relief to the racing industry.
In 2015, the Offshore Racing and Sports Betting Working Group estimated that around $58 million of gross betting profit was being lost offshore every year.
The money that is lost offshore – New Zealanders’ money – does not contribute to our industry, our people, or our country.
To confront this loss, the Bill will make amendments to strengthen the financial position of the racing industry by requiring offshore betting operators to contribute to domestic racing and sports sectors from the bets they take from New Zealanders.
This will keep more of New Zealanders’ money in New Zealand and contributing to the both the industry and the economy.
It is the Government’s hope that you – as the people at the heart of this industry – will view these developments as a sure sign that our promises to help this industry reach its full potential are not merely aspirational; but deliverable.
There are many positive developments yet to come, and we look forward to announcing these in due course.
The second bill is still under consideration and is expected to proceed later in the year. It will cover issues that will implement the remaining reforms and deal with post-transition governance.
In conclusion, as Racing Minister the goal is to change this industry for the better and already we are making real progress.
The repeal of the betting levy is one important step in the drive to revitalise the industry and help it to achieve its potential.
We must now look to the future, and the opportunities that await us.
Thank you to industry stakeholders for your support for the reform programme so far.
The passion and innovation that you bring to this significant New Zealand industry is vital.
To those seeking to buy today, we hope you find your next great racing success.
To all vendors, we wish you the very best of luck.
With that, it gives me great pleasure to declare the Karaka May Sale open.