Speech to the New Zealand Racing Board AGM 2013

Good morning and thank you for the invitation to address your annual conference. It is great to be here with so many of the people who make racing in New Zealand happen.

Having had this portfolio for nearly two years now, I’m impressed by the passion and commitment of the people involved at every level.

Over the last few months I’ve been attending the code conferences to talk about some of the recent issues and challenges facing the industry.

As Minister of Racing my goal is to see racing flourish. Racing is part of our history and heritage. It makes a major contribution to our economy. It is dynamic and exciting to be part of.

Today I want to discuss my role, and also the Government’s role, in helping racing to reach its potential.

Annual Report 2012/13

Under the Racing Act 2003, the Minister has no direct jurisdiction over the thoroughbred, harness or greyhound codes. I am responsible for the regulatory framework racing operates under, and my main relationship in this role is with the New Zealand Racing Board.

Earlier this year I appointed Glenda Hughes as the new Chair of the Board. Glenda has a wide range of skills and experience from her 25 years in business, including strategic management, social and public change programmes and marketing.

In July last year, I also appointed four new Board members. This was around the same time Chris Bayliss came onboard as the new Chief Executive. This has delivered some fresh new leadership and ideas for the racing industry.

As you know, the Board’s objectives are to promote the racing industry, to facilitate racing and sports betting, and to maximise profits for the long-term benefit of New Zealand racing.

The Board’s Annual Report for 2012/13 and Statement of Intent for 2013 -16 have been submitted to me. I was pleased to see record results for betting turnover and a net profit for the year of $1.9 billion.

This resulted in a record distribution of $142 million to the racing industry, an increase of $6.5 million from the previous year.

This is an excellent result, given increasing competition for the racing dollar and the many race meeting abandonments due to extreme weather conditions.

It is also good to see that a number of key initiatives to bring about the Board’s strategic vision for the racing industry are outlined in your Statement of Intent. I am pleased with what I see in the SOI; it is aspirational, and so it should be.

You will be hearing more about the targets set out by the Board shortly, but I will just run through the headlines:

• a targeted surplus of $160 - $180 million to be available for distribution to the industry by 2018;
• a target of an additional $40 million in stake monies by 2018;
• growing returns to owners by 50 per cent;
• increasing returns from new products and services by 30 per cent;
• making the industry more attractive domestically and internationally;
• and reducing operational costs.   

To meet these targets, you have also identified five key elements known as the five Cs (culture, capabilities, customer, community and convergence) as your foundation for change.

At the Thoroughbred Racing conference I noted that investment in facilities and marketing is important. People are less likely to go to the races if the racetracks do not offer as good or better facilities than other entertainment venues.

They won’t know about the races if the excitement of seeing and being part of the live action on the track isn’t marketed to them. They won’t want to race, buy or breed horses if they have no idea of the magic of this sport. So it is good to see that concrete objectives and actions are being taken to address these fundamental issues.

Importantly your Statement of Intent is consistent with the three racing code bodies’ Statements of Intent and Business Plans. It’s great to see the three codesmoving in the right direction together. I believe your industry is at the point of finding a way forward that will increase participation and profitability, for the benefit of everyone.

Australasian Racing Ministers’ Conference 2013

In April this year, I attended the Australasian Racing Ministers’ Conference in Sydney. It was a great opportunity to talk to my counterparts across the Tasman about common issues facing the racing industry.

The conference looked at racing integrity, quarantine arrangements, and race fields legislation. The last of these dealt with fees for wagering operators, and the issue of offshore wagering operators not making a contribution.

As the racing industry relies on wagering to fund its activities, it is understandable that there are concerns with the impact of offshore gambling on the industry in Australia, as well as in New Zealand. I’m told that the Board has estimated around $300 million are bet offshore by New Zealanders every year.

The Australian Ministers have requested legislation blocking access to websites that offer offshore gambling. However, we will continue to keep a close eye on developments in this area in Australia. It is important that the racing industry continues to look at practical, workable solutions to deal with this issue.

I also took the opportunity to invite the Australian Ministers to the next conference to be held in Wellington on 28 February next year, and I am very pleased they agreed. I will be expecting the three racing codes to report at the conference on current issues, goals and challenges in the New Zealand racing industry.

This will be a great opportunity to network with Australian Ministers and their racing representatives.

Gambling (Gambling Harm Reduction) Amendment Act 2013

Another big issue for the industry this year has been Te Ururoa Flavell’s Gambling (Gambling Harm Reduction) Bill, which Parliament has debated and passed.

This Bill had the potential to majorly impact on the racing industry through changes to the distribution and application of class 4 gambling proceeds.

As we know, gambling is central to racing. It helps build public interest, and generates excitement for patrons to keep them coming back. It’s also a necessity in terms of providing funding to the codes. Without it, the codes would not be able to maintain facilities and support themselves.

However, due to the harm problem gambling can cause for some people in society, it will always be contentious and have its share of detractors.

The New Zealand Racing Board made a submission against the proposal in the Bill that would have seen racing removed as an authorised purpose, for which the proceeds of non-casino gaming machines can be used. 

As you know, the Government supported the Select Committee’s recommendation to delete the provision to exclude racing as an authorised purpose. This means class 4 gambling funds will still be able to be used to support racing clubs.

I was heavily involved throughout this process, and fought in your corner. I was able to convince my colleagues to see the wider picture of how the racing industry and its facilities positively impact wider communities.

Animal welfare

Another important public issue this year has been animal welfare, particularly for Greyhound racing which has carried out an Independent Welfare Review.

I’m pleased to see this proactive approach. By commissioning the report and agreeing to bring in a range of new measures, they have shown a real desire to improve greyhound welfare standards. 

The report notes that, overall, greyhounds appear to be very well cared for during their racing lives.  However, it does identify the need for:

• greater transparency,
• better ways to reduce the number of unwanted animals
• improved industry standards and rules, and better awareness and enforcement of them;
• and improved track safety standards.

In my roles as the Minister for Racing and for Primary Industries, I take animal welfare issues very seriously and I fully support the report’s recommendations.

Sixty eight per cent of New Zealand households have a pet. New Zealanders are passionate about animal welfare, and they care deeply about how animals are treated.

I know that many of you here today own and care deeply about horses and dogs. It is important to show the public that you take these issues seriously.

Racing Safety Development Fund

Finally, last week I announced the appointment of Penny Mudford as Chair of the New Zealand Racing Safety Development Fund.

Penny has over 10 years’ experience in a range of governance roles both in the public and private sectors which will stand her in good stead in this role.

This fund provides around $1 million per annum, matching dollar-for-dollar contributions from racing clubs. The aim is to support projects that improve safety in the racing industry by upgrading facilities for jockeys, harness riders, the racing animals and patrons.

Since the fund was created six years ago it has provided $6.64 million to projects to improve safety and upgrade facilities in the racing industry.

Improving the health and safety of the racing animals, riders, spectators and officials is an important priority for the industry. This fund is there to support these efforts.

Conclusion       

Once again, thank you for the invitation to speak to you today and I look forward to supporting you in your efforts to build a much stronger, sustainable racing industry. It has been a successful year for the racing industry and I wish the New Zealand Racing Board well for the year ahead. Thank you.