"The way ahead"
Opening Remarks at the Thoroughbred Racing Club Conference and Annual General Meeting
[CHECK AGAINST DELIVERY]
Good morning ladies and gentlemen.
Thank you for your invitation to be part of your conference and Annual General Meeting, and to deliver the opening address. This is an opportunity to reflect on an eventful year and to look to the future
As you will know, the New Zealand Racing Board Annual Report was recently published. While the report indicated that profits are up there are those who remain concerned about the financial health of the racing industry, and about the ability of the Racing Board to ensure the financial future of the industry. The increase in money made available to the three racing codes to just over $148 million is welcome. It might help, but the Racing Board can still do a great deal more to support the three racing codes. This government will ensure that this happens. Returns have been too low for too long.
The Annual Report also records a significant decrease in equity. This is down from last year by 22.9 per cent. The Annual Report explains that this reduction results from the cost of planned investments and the increased distributions. While that may be so, it still heightens concern about the financial health of the industry.
Concerns remain about the Racing Boards Fixed Odds Betting platform. This initiative is yet to be introduced and it is late. The launch date has repeatedly shifted and there is chance now this may not take place until next year. There are indications that this project, which was forecast to be $38 million, has cost overruns. Again this is very concerning.
Another concern is that the abandonment or postponement of races due to weather conditions happens too often in New Zealand.
Last year 36 races were abandoned in New Zealand due to poor track conditions. 27 of these were on thoroughbred tracks. While 13 of the 27 races were rescheduled, there was a direct economic impact on owners and trainers, and indirect economic impact on the wider region. These abandoned races resulted in approximately $2 million of potential net profit lost to the industry.
A recent visit to Ireland highlighted the importance of better tracks and facilities, including all-weather synthetic tracks. We spent some time with people who are experts in their field, and the cautionary tale they told us about the need to get the right tracks is so important.
We have found the money for three but we want sound, fail-safe, alternatives when we talk about new tracks. They will all be different around New Zealand.
All-weather synthetic race tracks reduce the number of race cancellations.
These are some of the concerns, but there is still much to be positive about. This year has been extremely important for New Zealand racing. The delivery of the Messara Report means it is a different year to any other. We are on the cusp of real change and a positive future.
You know what the Report says in particular with the 17 key recommendations including six of importance to thoroughbreds:
- increased prizemoney;
- increased returns to owners;
- incentives to invest in horses (buy ins and breeding);
- increased race fields;
- increased wagering; and
- increased industry revenues.
The thrust of the Report’s recommendations line up with the New Zealand Thoroughbred Racing’s views. We welcomed your support as we move into the most challenging phase – beginning real change on the ground.
Submissions on the report
At the time of releasing the Report we called for the industry and public to make their views known and they did - with almost 1,700 submissions.
As one would expect, the New Zealand Racing Board and each of the Code bodies provided submissions. In addition, 50 submissions were received from Racing Clubs and 17 were received from organisations within the racing industry. 112 submissions were received from organisations and groups not directly related to the racing industry and the remaining submissions came from individuals.
Since that time all these have each been reviewed individually.
Of the 1,700 submissions, 1,182 were on a single issue – which was opposing the Report’s specific sub-recommendation that proposes allowing the Racing Board to acquire Class 4 pokie venues. These were largely form-style submissions with the vast majority coming via an online form.
However outside of this single issue campaign, the majority of the remaining submissions were generally supportive of the Report’s overall direction.
272 submissions indicated support for the overall intent of the Report and the remaining negative comments were largely directed towards specific recommendations.
The recommendations that received the most support from the submitters who commented on them were:
- Introducing robust processes to establish traceability from birth and the re-homing of the entire Thoroughbred herd;
- Initiating a special review of the structure and efficacy of the Racing Integrity Unit by an independent qualified person;
- Changing the composition and qualifications for directors of regulatory bodies;
- Seeking approval for a suite of new wagering products to increase funding for the industry; and
- Introducing a Race Field and Point of Consumption Tax.
There was also, as you would expect, some areas that have less agreement. Outside of the issue around pokie venues just mentioned, there were concerns raised around issues such the closures of specific racecourses.
One can agree with consolidation of racecourses being a challenge, but it is hard to disagree that 48 venues is too many.
Another consistent theme in the submissions was how sports, sporting organisations and sports betting fit into any future change. So there is a lot of work still to be done.
Cabinet has recently agreed, upon recommendation, to establish a Ministerial Advisory Committee to drive and inform government decisions on the Report’s recommendations. The committee will be charged with setting a sense of direction for the intended racing reforms. It will also report on opportunities and roadblocks to returning the racing industry to a well-managed and sustainable economic growth path.
The submissions on the Report will help both inform the work of the Ministerial Advisory Committee and ultimately be an important input into the government’s final decision on the review.
It is the intent of the Government to stay faithful to the Messara Report. We didn’t get him over here to give his expert advice and experience - independent, neutral and unbiased – to then ignore it. We are going to go for broke as much as it possibly can be done.
He will admit, like others, that there are one or two things that we can’t do or we have to tweak or change. We’re going to make sure we keep in close consultation with him and others who helped at the time to ensure we remain faithful to the report.
We expect to announce the membership of the committee before the end of the year. The committee will provide an interim report in the first quarter of next year and we anticipate having Cabinet decision on the future of racing soon thereafter. There is an expectation for this to include the introduction of legislative changes to work towards modernising the industry.
We can all see that the conditions are there to make this the thriving industry it once was.
The goals are lofty, including:
- a substantial increase in the collective returns to New Zealand owners; and
- a substantial increase in the industry’s overall economic contribution.
For this to be achievable, an immediate and collective effort will be needed for the industry to turn itself around. And it won’t be easy.
The New Zealand racing industry can have the brighter future it deserves, but real change and brave leadership will be required from us all.
Thank you for your continuing support as we move to decide exactly what changes will be made. But we know that speed, unction and immediacy is required here. We don’t want to be waiting around for months and years. We are now on the road to real change and a better future.
We have the chance to turn the industry’s future around together and to take our place as we once were, back in the elite of world racing. We have to make that investment.
All the best for your conference.