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Racing: Breeders need assistance

By Mike Dillon

5:00 AM Wednesday Feb 4, 2015
 
Concerned by NZ’s diminishing broodmare band David Ellis asks Government to weigh in
5b3aedb939f2ca870c19236dbfbf91c4b24cbbddTe Akau principal David Ellis has led the buyers' bench at Karaka for the past 10 years. Picture / Dean Purcell

Te Akau Racing's David Ellis said Government help is critical to arrest the falling numbers of New Zealand broodmares being bred from.

There was evidence at last week's Karaka sales series that some lower-end broodmares probably would not be bred from again this year.

"That cannot be allowed to continue and we urgently need government's help," said New Zealand's biggest and most successful thoroughbred buyer.

Ellis was the biggest Karaka buyer for the 10th consecutive year, but that level of concentration did not prevent him from being deep in discussion in the buying arena with Racing Minister Nathan Guy, while spending $4 million on 35 yearlings.

"Everyone appreciates how important this issue is to the racing industry and how important the racing and breeding industry is to New Zealand.

'There are so many fabulously talented people employed in the industry that are not skilled in other employment. It would not be easy to find those people other jobs and that is an issue that is important to this country."

 

Ellis said he had a very frank discussion with the Racing Minister.

"He is doing his best to stop the leakage of betting turnover to offshore agencies," something other countries have struggled to achieve.

"But he needs to go further than that. The Minister For Sport got something like $35 million for the America's Cup and the special Minister for the Rugby World Cup has managed to get $80 million from Government.

"I'm not saying those things are not worthy of that level of support, but a precedence has been set.

"In Australia, the New South Wales Government came up with A$180 million for the new Randwick grandstand and the Queensland Government has pledged A$10 million to the special Magic Millions meeting at the Gold Coast next year. The Victorian Government throws a lot of money at Melbourne's big carnivals.

"The NSW Government is reducing the percentage tax on betting [already lower than New Zealand's] and the minimum [saturday] stake in Sydney is going to A$100,000.

"The point I'm making is it makes it impossible to compete with Australia when their government bodies are so supportive.

"We have a serious issue with the broodmare numbers. It's currently between 4000 and heading more towards 3000. Below 3000 it is difficult to sustain an industry. If the Government feels this country needs a viable breeding industry it must act and act quickly.

"Good work has already been done between government and Inland Revenue regarding bloodstock depreciation rates. We are around the size of Ireland and in Ireland the Government is a huge supporter of the breeding industry.

"On Karaka Million night at Ellerslie there were a lot of Australians attending and they go to restaurants, fly Air NZ here, stay in hotels and they shop. That means a lot of money to this country."

Ellis points out to replace horses like three recently departed stallions such as Zabeel, O'Reilly and Thorn Park would require trying out something like 40 stallion prospects.

"A lot of our breeders are sending mares to Australia which, in turn, makes Australia stronger and us weaker."

Tap on the shoulder
• New Zealand's biggest thoroughbred buyer says the industry needs
Government help.
• Te Akau's David Ellis points out the lavish assistance horse racing receives from various Australian state governments.
• Ellis says the industry cannot afford the dropping broodmare numbers.

NZ Herald

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"That cannot be allowed to continue and we urgently need government's help," said New Zealand's biggest and most successful thoroughbred buyer.

 

 

What is the basis for this hyperbole - or is it just sloppy journalism?

 

Biggest ... well .... maybe not too much room for argument there ...

 

Most successful? - how has that been established?

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Ellis said he had a very frank discussion with the Racing Minister.

"He is doing his best to stop the leakage of betting turnover to offshore agencies," something other countries have struggled to achieve.

 

Two things with this little portion - so Nathan Guy is "doing his best" ? - and what is his best, precisely?  I haven't seen a great deal of evidence Guy is doing very much at all.

 

And instead of fretting/fixating about betting leakage - look to our local agency - the TAB - which needs to change in two fundamental ways:

 

1. The structure needs to change so TAB no longer acts as an omnipotent ruler over the whole industry - TAB has its own interests at heart - not those of the greater industry, breeders, trainers, owners etc 

 

2. Make the TAB the betting agency of choice so NZ punters don't want to bet off-shore.

 

But you know what?  The government is so short-sighted they just see what they make out of the TAB and want to protect its income from that source (which by the way, is what?  Be interesting to know).

 

These politicians seem to lack the insight to consider the bigger picture of all the people employed within the industry - all the WINZ benefits they might end up paying out as the industry slowly dissolves ...  the social cost ....

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Now this silly old prick thinks leakage is the problem.....I will state it again old timer......

 

IF GOVERNMENT TRY TO STOP NZ PUNTERS BETTING OFFSHORE.....

THEY WILL NEED TO STOP OVERSEAS PUNTERS BETTING HERE WITH THE TAB.....

AS WE KNOW OVERSEAS PUNTERS BET MORE WITH THE NZ TAB.....

THAN NZ PUNTERS BET OVERSEAS......

 

SO THAT WILL MEAN LESS MONEY THE NZ TAB TAKE ON BETTING???????

 

What stupid pricks........That is the reason nothing has changed, they know it will hurt them in the back pocket.

Ellis should concentrate on brushing his teaser......and leave it at that.

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What stupid pricks........

 

I think we already know Mr Guy couldn't give a toss about racing (in keeping with the tradition of past National Govt racing ministers) - and as for any thoughts or hopes that he or his henchmen would bring any real intelligence to the table  ...... :wacko:

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Portfolio, I find your comment interesting. Can you point me to some data to support your assertion about more being bet by offshore punters on the NZ TAB than is bet by Kiwis offshore through corporate bookies and foreign TABs. It's a genuine question. I'm no expert in these matters but I would have thought the opposite was a given. Are you including SuperTAB investments ?

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Interesting responses here most of which IMO miss the point.

 

The point being that Ellis (or anyone else who gets the chance) should certainly get in the Govt's ear and make sure that they are aware of what is happening. We should be applauding him therefore for doing this. Not point scoring.

 

Drawing a parallel with the Australian experience and the support it gives is certainly a reasonable thing to do.

 

Now the fact that Ellis acts partly in self interest (who doesn't ) does not for me invalidate what he is trying to do. Note that sometimes what someone says is worthless because of their bias etc (eg Real estate industry spokespersons to give one example). But not this time. I should also point out that I am in no way an apologist for David Ellis - in fact a bit the opposite.

 

Jess I think the criticism of Dillon on that point is a bit petty really. You could make the argument bearing in mind success in this context could be measured in a number of ways. You other comments on Guy - yep I agree.

 

Crusty me old mate - money into the industry is what he wants and it is needed. The distribution of any funds needs to be carefully thought through - I suspect if we are talking about the bottom end of breeders with mares it needs to be used in an attempt to close the economic disaster that racing a horse which does'ntwin 6 or 7 can be. That is stake money at maiden/R65 etc level. Cheaper racing costs in terms of noms and associated fees. That sort of thing???

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Jess I think the criticism of Dillon on that point is a bit petty really. You could make the argument bearing in mind success in this context could be measured in a number of ways. You other comments on Guy - yep I agree.

 

 

Chelsea - I just get sick of ill-founded claims being trotted out with no qualification - sometimes it feels likeif people repeat something oft enough - it becomes regarded as a truism.

 

Reminds me a little of articles quoting "high profile lawyer" so-and-so - as if getting your faceon tv all the time or your name in the paper every week denotes success.  Well it doesn't in my books. 

 

Ellis probably spends the most money - and gets (buys) the most pyblicity -  but this in itself does not make him the most successful buyer.

 

I'm just looking for a bit more substance and accuracy ....

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Ellis spent $4 million on 35 yearlings at Karaka according to Dillon. 

 

No doubt a few of the 35 will pay their way on the racetrack, or make hay in the breeding barn.  Ellis's success with these will be trumpeted.

 

Most will prove to be financially disappointing or catastrophic buys, for those to whom Ellis offloads shares.

  

Imagine the tears when returns are as miniscule as from King's Rock, for which Ellis paid $1.75 million at Karaka in 2012.  At the time he last raced in October 2014, King's Rock had been gelded, and had been a success to the tune of $10 thousand in stake money.  King's Rock was going quite well in R65 company, and Ellis was saying he had a feeling the horse would win a really good race like the Waikato Cup, the Counties Cup or the Auckland Cup if he stayed sound.  

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Chelseacol

 

Top of the class.

We have a real tall poppy syndrome here in NZ. David Ellis has kept a lot of horses in NZ that would have otherwise gone overseas.

 

He is trying to help the industry here,(he could sit back and do nothing) and he cops criticism.

Here is someone who is trying to get what the industry needs and people feel the need to have a crack at him.Thats disappointing. I hope its just people with an uneducated view.

 

I have never met the man and don't want to sound like im licking his boots,just stating that I agree the criticism is very harsh/uncalled for, in this case.

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Comparing the America's Cup and Rugby World Cup with the NZ racing industry ... lol.

 

The Australian comparisons are ridiculous if you also compare what those industries contribute to government there, and are the result of successful strategies not the foundation of them or what amounts to a bail out.

 

The industry estimates of leakage have already been ripped to shreds by the DIA, so I doubt this government will be too concerned with that. They already donate the NZRB earnings from not only domestic racing but imported racing and sports betting to racing, as well as 10mil of pokie earnings. Perhaps that should go to more deserving social uses, or reducing taxes for everyone else.

 

And, I don't know whether it's Dillon or Ellis, but it's "precedent", not "precedence"

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... maybe he/they had that good Zabeel horse on the brain ... ;)

Maybe, or maybe they had something else on the brain. What they are advocating is certainly precedence, but I doubt they have much of a case to support that.

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Portfolio, I find your comment interesting. Can you point me to some data to support your assertion about more being bet by offshore punters on the NZ TAB than is bet by Kiwis offshore through corporate bookies and foreign TABs. It's a genuine question. I'm no expert in these matters but I would have thought the opposite was a given. Are you including SuperTAB investments ?

 

Pete.....

Well, the TAB has stated in the past that overseas punters bet more on nz racing than those residing here, betting with the TAB.

 

We don't have a huge amount of big punters in nz, the tab have constantly told us that they target large overseas punters. I know of one guy....lives overseas...only bets on sports and places thousands on each bet...TAB love him, he does bet everywhere thou.

 

Sports betting is the big thing for them......apart from the upcoming cricket world cup, nz have very little top betting sports.

Even the nines last week....betfair only had about $10k matched in most games. Sometimes in major sports events....$10m, $20m or $40m is bet on betfair...just on the head to head.

 

Sure, overseas punters would be betting on aus racing with the nz tab.......but maybe with all the leakage shit....it will all stop!

 

To be fair.....NZers could only bet with the TAB.....but no one outside of NZ could bet with them??? Ooouch......how much would that hurt the industry.

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In all fairness , He said the Australian Govt. bodies are more supportive of the

racing industry, We are rock bottom at the moment as far as racing a horse goes,

prizemoney wise and having a broodmare and the beauty of having a foal,

year in, year out, is not as attractive as it may have been, in the past.

Therefore Having a stallion,and running a stud,may not be as easy and

appealing as it all seems. 

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God this is not a new problem people! Michael Martin has been saying this for longer than I care to remember (certainly before 2004) to those at the top and all those in-between in the industry but none of the "Big wigs" as it were, have given it airtime till now. 

 

Given the numbers problem and the fact that it's 3 years before we get a horse near a track, I'd say the horse has bolted in fixing this problem Mr Ellis and the industry is in the brown smelly stuff for sure! Within the next five years we will have races with 3-4 horses in them which won't be sustainable for anybody will it??

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Thanks Porty, although I am still not convinced there are that many overseas punters betting with the TAB despite what they claim.

 

Sports Betting is certainly the growth area.

 

Back to the Breeders issue. I think the point Ellis is making is that if breeding numbers drop much more the industry would no longer be sustainable or it would devolve to a "cottage" level. This would inevitably reduce exports especially if NZ "fell out" of part 1 of the Blue book - a sure indication for Asian markets that the product was being downgraded. Tax relief for breeders has usually resulted in a subsequent increase in stock numbers. Studs find it difficult to stand stallions at reduced fees because they are buying on the same market as those in Australia where the industry is relatively healthy. They don't come cheap. I am always amused by the way broodmare owners think studs just make up a price for the fee based on what the breeders can stand. In many cases studs are still trying to pay off the borrowings for these horses many years down the track.

 

Certainly we have major issues with how the TAB is run and marketed overlayed by the overall negative perception of racing to the public. The TAB does nothing to alleviate this. Secondly, the presentation of Racing on television is still substandard. I watch basically every race run in NZ from afar and genuinely cringe at times if anyone else is watching such is the amateur standard of some presenters (not all). Thirdly, the biggest problem is the administration of racing and the distribution of prizemoney. Harness racing and the hounds have got fat on the back of Section 16 and only a complete revision of distributions unique to the codes would be both fair and enable thoroughbred racing to have a chance of recovery. 

 

Clubs need to have prizemoney distributed on a per capita basis, based on their turnovers. If they can't survive then they should fall. It wouldn't necessarily be the small clubs which would go. In fact some of the biggest would be under threat given the level of unfair subsidization they have enjoyed over the years. Any attempt to self-rationalize the industry at club level will always be opposed by the clubs themselves out of fear. Either the Minister and/or his board need to legislate to make major change or simply base it on rewarding those clubs who can perform.

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Guest 2Admin2

 

The biggest problem is the administration of racing and the distribution of prizemoney. Harness racing and the hounds have got fat on the back of Section 16 and only a complete revision of distributions unique to the codes would be both fair and enable thoroughbred racing to have a chance of recovery. 

 

 

 

How have the other codes "got fat"?  Are you suggesting that Thoroughbred racing should get more than a share equal to their contribution?  If so how do you justify that?

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Re: the problem of "leakage". Who the fuck are the government to tell us punters who we can bet with?? They were the ones who made the myopic decision to give the NZ TAB a monopoly on fixed odds betting in this country. If they had opened it up to two or three different operators both they (the government) and the industry would be 10x better off. Instead they are trying to fix one mistake by making an even bigger one (leakage legislation). Mindless cretins.

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Super post Phantom - sums it up perfectly

 

Don't worry, the "Brains Trust" haven't worked out how easy it is in this modern age to circumvent any shyte they throw at us - as they continue to deal with the results (deck chairs Titanic spring to mind)  rather than the cause, the outcome of a results "deal" will be very easy to over-come.

 

Clowns in comedy hour

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How have the other codes "got fat"?  Are you suggesting that Thoroughbred racing should get more than a share equal to their contribution?  If so how do you justify that?

Admin, I am referring to Section 16 which for a decade or so enabled the dogs and trots to benefit from the betting on offshore thoroughbred races. THAT was not fair and it was a weak and fatal moment when the TB folk agreed to it. The greyhound stakes rocketed after this implementation while harness stakes rose considerably. In the same period thoroughbred stakes stood still or regressed.

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Guest 2Admin2

Admin, I am referring to Section 16 which for a decade or so enabled the dogs and trots to benefit from the betting on offshore thoroughbred races. THAT was not fair and it was a weak and fatal moment when the TB folk agreed to it. The greyhound stakes rocketed after this implementation while harness stakes rose considerably. In the same period thoroughbred stakes stood still or regressed.

Well now it is harness and dogs that are saving the day. That seems to be where the increase in turnover is coming from.

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