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Select Committee

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Apparently the  select committee on the Race Fields legislation has made approximately 30 recommended  changes to the legislation.

Does anyone know if that includes the funding formula for the codes,  i.e. whether it will remain as is or change from being based on the domestic share of turnover of each code to the total turnover including overseas product.

It would be good if someone from HRNZ could enlighten us.

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The report and recommendations can be found here;

Racing Industry Bill final report.

There are changes and the provision in the recommendations only kicks in if there is no agreement within the commercial arrangements made by the codes (or Racing NZ on behalf of the codes) with TAB NZ. There are 3 references to distribution including one for the season 2019/2020, a separate one for transition year 2020/2021 and then one for the future. 

However, regulations made under subsection (1)(a) must not result in an amount to be distributed that exceeds,— (a) for the period beginning on 1 July 2020 and ending on 30 June 2021, 2.67% of TAB NZ’s betting profits: (b) for any period on or after 1 July 2021, 4% of TAB NZ’s betting profits.

In this section, betting profits means profits for totalisator racing betting, sports betting, and fixed-odds racing betting or other betting (if any) conducted by TAB NZ calculated in accordance with the following formula: p = a – b – c where— 20 p is betting profits a is the total of all amounts received by TAB NZ or its agents (including the net return from bets laid off) for— (i) totalisator racing betting (other than equalisator betting conducted under section 67): 25 (ii) sports betting: (iii) fixed-odds racing betting b is the amount of refunds paid c is the amount of all winning dividends paid out in respect of amounts described above.

Later

Distribution from TAB NZ’s betting profits for period ending on 30 June 20 2020 (1) For the purposes of making a distribution of the Agency’s betting profits to each of the racing codes and Sport and Recreation New Zealand for the period beginning on 1 July 2019 and ending on 30 June 2020, section 63(1) applies as if the following paragraph were inserted above paragraph (a): 25 “(aa) for the period beginning on 1 July 2019 and ending on 30 June 2020, 1.33% of the Agency’s betting profits:” (2) To avoid doubt, a distribution made in accordance with subclause (1) may have retrospective effect.

Not sure about the three different levels moving from 1.33% based on this year moving to 2.67% then finally up to 4.0% (wishful thinking?). Makes me wonder if those figures are more about the TAB's current financial position and the need to re-capitalize.

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