NZTR chairman outlines key issues
New Zealand Thoroughbred Racing (NZTR) has identified six key points to discuss with the new Government.
In his address to the NZTR Annual General Meeting on Thursday, Board chairman Dr Alan Jackson outlined the major racing issues which needed to be addressed over the next three years. NZTR will ask that the Government:
- Finalise and enact the Racefields legislation in a manner which ensures NZTR can charge commercially competitive fees, to encourage overseas operators to offer betting on New Zealand racing.
- Support NZTR to modernise key racetrack infrastructure, to deliver a sustainable programme for thoroughbred racing.
- Consider reinvesting totalisator and gaming duty into transformational projects such as infrastructure and racing showcases.
- Ensure that the operations and costs of the NZ Racing Board (NZRB), and its business model, are at scale and internationally competitive in a global wagering world.
- Provide financial and regulatory support for a key racing showcase between November and February that creates tourism through a racing carnival that will focus on increasing participation in wagering and customer activity from Australia and Asia.
- Review and update the structure of the Racing Act, to clarify the accountability, roles and responsibilities and performance expectations between the New Zealand Racing Board and the codes.
“We are looking forward to meeting with the new Minister for Racing, the Rt Hon Winston Peters, who has proved very supportive of the industry in the past, to discuss the thoroughbred code’s needs,” Jackson said.
NZTR had welcomed the introduction of the Racefields legislation, which had passed the first reading, but considered that adjustments were needed. “The proposals need further work to deliver a package that allows the thoroughbred code to establish a competitive and appropriate fee in Australia,” Jackson said.
Discussions with Australian racing authorities and corporate bookmakers had indicated that there was little leakage from New Zealand punters but that there were significant opportunities to raise the level of Australian betting on the NZ product.
“The original proposals are not competitive, given point of consumption tax expectations in Australia and New Zealand and the fact that the corporates now pay GST on digital transactions to New Zealand.”
However, there was an acceptance by the corporate bookmakers of the need to pay when the legislation was in place and NZTR was in discussions with publishers and racing websites to increase direct exposure for the NZ thoroughbred product in Australia, in anticipation of the Racefields legislation being passed.
NZTR, the other racing codes and the NZRB maintained the aim of achieving income flows from the Racefields legislation in the current racing year and were working together to achieve this outcome.
Jackson also referred in his address to NZTR’s reservations over the direction of the current NZRB business plan and its focus on “optimising New Zealand.”
“NZTR has regularly promoted to the NZRB the need to secure cost efficiencies and links with a global wagering operator rather than try to optimise New Zealand.”
Multiple pieces of work, which NZTR had been involved with or undertaken, had shown that an outsourcing arrangement would provide significant financial gains. “We are not promoting a sale, but a commercial outsourcing arrangement to achieve these goals,” Jackson said.
A Deloitte report, which had analysed margins, wagering growth, totalisator loss sensitivities and the value of potential synergies from outsourcing, had indicated that there were substantial potential gains for the NZ industry.
The report estimated that several hundred million dollars of additional revenue could be returned to the total industry, over the next four years, by following an outsourcing approach versus insourcing and developing the fixed odds platform. These figures were also consistent with previous estimates by external parties.
“The difference in our views versus NZRB is fundamentally in these areas,” Jackson said. “NZRB and NZTR disagree on the level of the outcomes likely to be achieved and the risks involved. However, NZTR can consult but we cannot decide and the NZRB is pursuing the strategic initiatives outlined in the SOI.”
But there had been recent changes in the wagering landscape and, as a result of Australian gaming legislation, the NZRB was no longer permitted to take bets from Australia. “This has the potential to have a significant impact on the accessible market for New Zealand and limit exposure to the $30bn Australian wagering market,” Jackson said.
“NZTR therefore is continuing to push hard on the need to urgently initiate discussions with possible Australian wagering partners, focusing upon parimutuel opportunities as a minimum.
“But no matter what strategy is pursued, a modern and competitive totalisator will be essential and provides a safety net to the industry.”