TAB NZ Cash Profit vs NZ Racing Poor Stakes !

[Baz (NZ) 1,722]

TAB cash-in on COVID but stakes money remains static

by Brian de Lore
Published 25th February 2021
http://www.theoptimist.site/

The woes of the racing industry in New Zealand can only be fixed by one thing – stakes money!

Stakes money is what drives the racing business and determines its state of health. But New Zealand racing isn’t driving anywhere, and if presented for a warrant of fitness today, it would get a FAIL with defect notices citing a blown head gasket, spark plugs that don’t spark, bald tyres, and a gearbox that doesn’t get out of first.

TAB NZ, as it’s now called (formerly RITA, and before that NZRB – the Racing Board), on February 19^th, posted on its website a self-congratulatory update on its improved trading performance through COVID and especially in January in which it reported the month’s profit before distributions of $17.1 million.

And it’s quite true that our TAB, like every other betting agency worldwide, has benefitted from increased betting in a COVID lifestyle, resulting in greater profits. Turnover in NSW is up 39 percent and in Victoria, where harsher lockdowns were in force, the turnover at one point was running at 76 percent higher than normal.

Increased TAB profits will not go into stakes

But the problem for all of us, the participants of racing, is in the TAB’s wording which says “a reported profit before distributions of $17.1 million.” The keywords are “before distributions” because very little of that profit will come back to the codes, and indeed, none of it will flow into stakes money.

The $151 million will be achieved this year will only maintain the current prizemoney level which goes back to 2017.

If you examine the table below, the Year-To-Date Actual shows an excess of $13.1 million, which should be distributed back to the codes according to the legislation. But it’s not going to be because the TAB is in administration, and it’s the DIA that’s pulling the strings, and the pot of cash for prizemoney distributions is last in line to get a cut.

Prizemoney is a ginormous issue for racing. Recovery isn’t possible without a substantial increase. But you need a plan to seriously address the prizemoney issue (the Messara Review was a plan), and currently, no plan has come out of TAB New Zealand, and that’s why the appointment of the new TAB board is so crucial to the viability of racing’s future.

This coming July will mark three years since the Minister of Racing received the Messara Review. The introductory letter stated, “…the thoroughbred racing industry in New Zealand is in a serious state of malaise.”

Everyone except the board and executive of NZRB acknowledged the truth of that line. Well, it’s more valid today than it’s ever been because the costs of training horses have further risen in the ensuing three years, and the prospect of stakes going up remains dormant.

Take last Saturday’s Gr.2 Avondale Cup as an example. The race won by Robusto was worth $54,000 to the winner. When Bob Skelton rode Bellota to win the race in 1976, it was worth $21,000 to the winner, which when converted on the Reserve Bank’s CPI calculator has a buying power today of $197,000. In round figures, it was worth four times the value of today.

When the ill-fated Tony Williams rode Lucozade to victory 37-years-ago in 1984, the winner’s cheque was $66,000 or $12,000 more than Saturday. The $66,000 buying power today is equivalent to $225,000.

Then take into account the cost of training in 1976. Ray Verner at Takanini was charging $6/day, which converted to today’s buying power is $54. And Ray Verner’s accounts did not include the multitude of extras listed on today’s invoices where the owner pays a premium in addition to the daily base fee of over $90 at either Cambridge or Matamata.

You could safely assume that in 1976 your horse was racing for four times the prizemoney for half the costs. No wonder Murray Baker and Andrew Forsman during COVID have lost 17 horses which have crossed the Tasman to Australian trainers. Winning the Hobartville Stakes at Rosehill on Saturday with Aegon is yet another great advertisement for our breeding industry, but it does nothing to help the viability of racing horses in New Zealand.

A typical screen of live sports betting when you open the TAB NZ website which álways priorities sport over racing. The Super Bowl in the USA earlier this month offered 300 different betting options, some of which attracted no bets with others holding total bets of only $1 or $2. The tote betting for win and place and exotics on horse racing wasn’t part of the new Fixed Odds Betting Platform but it was racing that paid for the entire cost of $50 million, plus all the ongoing commitments to Paddy Power and Openbet for the next five and ten years respectively.

And the TAB announcement on Friday was very self-congratulatory, but rest assured it does nothing to contribute to the dilemma of low prizemoney, which faces everyone who races a horse in a worsening scenario season by season.

As long as costs are rising, and they are every season, and stakes money has no apparent avenue open to it to increase at any stage in the foreseeable future, the chances of a return on an investment in a thoroughbred racehorse diminishes every year.

A multitude of people promoting racing will not admit to these facts. They loathe what I am saying, and denialism is rife. Why, because they are trying to sell something, so it’s against their interests to hear the truth spoken, and this racing industry is endemic with self-interest.

If racing could only look itself in the mirror, fess-up, and say, ‘we’ve got this wrong, we’re doing it wrong, and we have to change it.’ But they won’t because many are too ‘out of touch’ to know what to do anyway while others are only political about decision-making, and the rest are non-racing people with self-interest who have spent the money on self-expansion – money which belonged to the pot for increased stakes that never arrived.

TAB tell you only what they want you to know

Look at the TAB – it has been an endemically dishonest and incompetent organisation for years. They tell you only what they want you to know – a half-year result this year but none last year. Why? Because last year was a disaster, but they can live with this year and pat themselves on the back for the arrival of COVID.

Now they have an advertisement on Trackside TV asking you as a customer to remain loyal to them to curb leakage to the Australian corporates. But as they plead to you using sports stars such as All Black Stephen Donald and the under-performing CEO Dean McKenzie, they continue to shaft their customers by offering lower odds on a disappointing FOB platform, and banning or limiting any punters who show an ability to win consistently.

Ex-TAB non-performers such as Glenda Hughes, Gary Woodham, Shaun Brooks, and Stephen Henry who all failed so miserably for five years or longer as NZRB have all been regurgitated by Harness Racing NZ and Greyhound Racing NZ. Two have been put forward for selection to the yet-to-be-announced TAB NZ board – how stupid do the boards of Harness and Greyhounds have to be?

Do they really think people in racing, especially the thoroughbred code, will put up with that lunacy? What are they thinking? Don’t they remember that those failures mentioned above, along with John Allen and Glen Saville, made up the team of incompetents who cost this industry around $200 million of losses? Glen Saville was sent to Ireland, where he signed-up the New Zealand industry with Paddy Power and Openbet for those massive debts to accompany the FOB platform, and now he’s left NZ and gone to the USA to work for a division of Openbet – what does that tell you? He came from Australia, where he’d had three years as a junior project manager with Tom Waterhouse Bookmaking – he should never have been employed at NZRB in the first place.

The Investing For The Future table was lifted from the NZRB’s Statement of Intent for 2018-2020. It shows just how much John Allen and team missed the budget by. Note the $200.6 million prediction for the year ending 2020 in the bottom right-hand box for 30th July last year. The actual figure was only $120 million which was $10 million more than The Optimist’s prediction of $110 million – the difference accounted for in the upturn of betting through the period of COVID lockdown.

But I digress, back to the issue of no money for NZTR to increase stakes. The ‘racefields’ or Betting Information User Charges (BIUC), as RITA decided to call it, was ratified in the new legislation, but instead of NZTR gaining the appointment of the ‘designated authority’ to collect the money, the then Racing Minister Winston Peters with his lack of foresight appointed the DIA (Internal Affairs).

The appointment was a mistake, but NZTR led by Bernard Saundry, has been poor in appealing the decision and demanding NZTR be the ‘designated authority.’ If it had done so and been successful, the money collected could have come directly to the codes for increased stakes. That’s what was supposed to happen.

Let’s face it, NZTR has been a weak organisation for years. It didn’t show any metal in standing up to the poor decision-making at NZRB/RITA/TAB NZ, and they have let down the owners, trainers, employees, and volunteers and everyone integrally involved in thoroughbred racing. And I say thoroughbred racing because after the way Greyhounds and Harness have behaved they should be cut loose to drift.

Cameron George the absentee chairperson

The new board at NZTR this week released a statement on the Love Racing website. It said; “The New Zealand Thoroughbred Racing (NZTR) Board has agreed that Cameron George will remain as chairman until the 2021 AGM.

“George was initially appointed as interim chair following the 2019-20 Annual General Meeting in November.

“The NZTR Board decided at its February Board meeting that not only would George retain the chairmanship but that two Deputy Chairs would be appointed. These positions have been taken up by Darryll Park and Bruce Sharrock.

“The appointment of two deputy chairs enables our Board leadership to have a greater geographical spread across the industry. This structure also provides broader support to NZTR management and shares responsibilities across the board,” George said. 

That’s horse manure and a big pile of it. Has any board anywhere in the world ever had an absentee Chairman with two deputies who essentially have no power. That’s the way George has set it up.  

George further said: “Our Board is focused on continuing to develop a strong and transparent connection with all stakeholders, and we are united to achieve the best possible outcomes for the industry.”

But that statement is lip service only. So far, the 4-month old board has communicated nothing, and George shouldn’t be Chair of NZTR for the mere fact he is resident in Australia because he’s CEO of the Warriors. How can he do full justice to a code in strife when you’re out of the country. You can’t, which shows how this business is not capable of running itself.

…ineffective Members Council

It all comes back to an ineffective Members Council. They have failed to appoint a board capable of fixing this business for as long as the system has been in place, but they seem happy about their poor record of success. The Members Council should be abolished – perhaps some are too familiar with the people they’ve appointed?

Why, for example, are four of the seven on the board from Auckland and another from Hamilton. They also are all too familiar with each other and have already earned the sobriquet of ‘the cartel’ and are suspected of planning to take the Guineas races away from Riccarton to Ellerslie.

Everywhere south of Hamilton is underrepresented, with only two members. This unlevel playing field is an unhealthy aspect of the industry – resulted only from the existence of the Members’ Council.

Murmurings in the industry reveal that Cameron George was an unpopular appointment in the first place, and now he’s the Chair. He was a stipe who developed an unsavoury reputation both on and off the course.

If this industry can’t develop some integrity, it has nothing and will never go anywhere. Integrity, honesty, transparency, and accountability – in 2021, we have yet to see any of it.

Below: The Grant-Thornton Performance and Efficiency Report released in October 2019 shows a lack of performance and no efficiency. Note the debt level to the bank was $35 million in 2017 which under RITA rose to $45 million and is now back at $35 million.

Grant-Thornton’s Performance and Efficiency Report table released in October 2019. When the NZRB released their budget for 2019 they predicted a Net Profit of $165 million because they were deluded about the coming success of the FOB. The Optimist in January 2019 predicted a profit of $140 million and the final result was only $137 million. It also shows bank debt of $35 million at the end of 2019 and a five-year decline in equity from plus $70.8 million to -$47.4 million




http://www.theoptimist.site/

[We're Doomed 4,855]

Thank you for putting that up Baz. I keep forgetting to check out the Optimist. Brain does a good job, albeit rather thankless. It must be very frustrating for him. Most of what he says is totally sensible and obvious for all to see, but for some reason a lot of people refuse to accept it, or just don't understand how the industry really works. We really have had the most appalling leadership for many years now and show no signs at all of learning from previous mistakes.

[gubellini 3,996]

The good news is that due to Covid 19 NZTR senior staffers will not be able to enjoy overseas soirees until the next Asian Racing Conference in Melbourne next February 15-18. The bad news is that none of those savings will be ploughed back into stakes.

[We're Doomed 4,855]

1 hour ago, gubellini said:

The good news is that due to Covid 19 NZTR senior staffers will not be able to enjoy overseas soirees until the next Asian Racing Conference in Melbourne next February 15-18. The bad news is that none of those savings will be ploughed back into stakes.

I always think that any of those people who go off to conferences to learn how racing should be run must come back totally confused. They must always think "wow, that's nothing like the way we do it."

Is the Conference ever held in NZ? It would be a good opportunity for us to show the world the way we do things here.

[Bimbo 734]

12 hours ago, gubellini said:

The good news is that due to Covid 19 NZTR senior staffers will not be able to enjoy overseas soirees until the next Asian Racing Conference in Melbourne next February 15-18. The bad news is that none of those savings will be ploughed back into stakes.

Those savings were quickly used up by last months pay increases.  Balances the books nicely.  Stakes increases will have to wait.

[tasman man 742]

The Optimist writes good articles about the fragile state of NZ Racing .

This article largely regurgitates his articles of  early 2020 when it became apparent NZ Racing was technically insolvent, had paid the codes more than what it had earned and its equity was all but eroded and a bank loan had been drawn down to pay for the dud betting platform.

It took a Govt handout to pay its Creditors and enable it to continue trading.

This latest article suggests that post -Covid the new Board etc should have been miracle workers and with the resultant improved trading conditions somehow paid dramatically higher Stakes to our resillient owners who have had diminishing returns with higher costs for several years.

Without going over the past betting figures , Sport has contributed the only increases with Harness in particular dropping alarmingly.

The codes are trying to rebuild some reserves.....the TAB no doubt trying to repay some of the recently required debt as well.

Dunno what the Optimist expects ,or how he figures stake figures can increase dramatically.

For the last 50 years folk have been saying NZ has too many tracks and probably too many horses expecting to race....everybody wants change until they realise it could be their track and their horses which will be culled !

The new Board are not magicians....C.George was a temporary Chair , his quarantine status in Australia is a very easy target but what well qualified Kiwi/person would want that job currently.....its a hiding to nothing ! 

Interestingly there hasn't been much response to this article cos most realise its the same ole , same ole !

Comparing NZ  Racing with Australia etc a bit tiresome ! 

NZ culture has changed dramatically and NZ racing needs to change dramatically too.......C.George is planning to oversee some , even if it is by zoom meetings !

 

 

 

[Disillusioned 389]

17 hours ago, We're Doomed said:

Is the Conference ever held in NZ? It would be a good opportunity for us to show the world the way we do things here.

I Googled/Wikipediaed.

This sequence stops at 2018, dunno why, but it shows New Zealand has three times hosted the bunfight in question:

History of the Asian Racing Federation

The first Asian Racing Conference was held in 1960 in Tokyo on the initiative of Count Todamasa Sakai, President of the Japan Racing Association and Mr U Chit Khine of the Rangoon Turf Club.

This first convocation was attended by 69 delegates drawn from Burma, Hong Kong, Japan, Malaya, Philippines, Singapore and Thailand. India intended to send a delegation but logistical problems prevented this from occurring.

From those early days the Asian Racing Conferences expanded rapidly, both in the number of delegates attending and in the size of the geographical area covered.

At the 2nd Conference in 1961, Australia, India, New Zealand and Sarawak became official members; at the 9th Conference (1970) Korea and Turkey joined; at the 11th (1973) Indonesia and Pakistan; at the 16th (1982) Bahrain; at the 22nd (1991) Macau; at the 23rd (1993) South Africa; at the 24th (1995) the United Arab Emirates; at the 25th Conference (1997) Mauritius; and at the 26th Conference (1999) Saudi Arabia; and at the 27th Conference (2000) Oman; and at the 28th Conference (2001) Qatar.

At the 28th conference, it was decided to establish a permanent organization, the Asian Racing Federation. The objectives of the Federation have remained similar to those drawn up by Count Sakai and Mr Khine. The objectives of the ARF are:

1. To meet and foster goodwill and mutual understanding through the medium of periodic conferences and other racing events in the member countries.
2. To promote horseracing and breeding and the integrity and prestige thereof by any means that the Federation shall consider appropriate and which are in compliance with all existing laws, rules and regulations.
3. To encourage and develop mutually beneficial objectives and strategies between racing organisations without discrimination to aid the development of horseracing.
4. To exchange ideas and information on matters connected with horseracing.
5. To encourage, promote and support international competition for jockeys and horses when conditions permit.

Plenary assemblies of all the Federation’s members and associate members, termed Management Meetings, are held at each Asian Racing Conference. Between conferences the ARF is governed by an Executive Council. Up until 2010 the Executive Council consisted of nominees from Japan, Hong Kong, Australia, India and New Zealand. In 2010 the Management Committee approved amendments to the ARF Charter to expand the Executive Council, on a provisional basis, to include Singapore, South Africa and the United Arab Emirates. The Executive Council meets approximately four times a year.

The ARF is formally linked with the International Federation of Horseracing Authorities. Australia, Hong Kong and Japan have permanent seats representing the ARF on the Executive Committee of the International Federation of Horse Racing Authorities, and the ARF also nominates one of two rotational positions on the IFHA Executive Council. The ARF Secretary-General also acts as the Executive Director at meetings of the IFHA Executive Council.

Sequence of Conferences Of The Asian Racing Federation

Conference	Month	Year	Host Country
1st Conference	May	1960	Japan
2nd Conference	September	1961	Singapore
3rd Conference	April	1963	Australia
4th Conference	November	1964	Philippines
5th Conference	January	1966	India
6th Conference	January	1967	Thailand
7th Conference	January	1968	New Zealand
8th Conference	March	1969	Japan
9th Conference	September	1970	Malaysia/Singapore
10th Conference	March	1972	Australia
11th Conference	May	1973	Turkey
12th Conference	November	1974	Philippines
13th Conference	December	1976	India
14th Conference	December	1978	Hong Kong
15th Conference	September	1980	Korea
16th Conference	January	1982	Thailand
17th Conference	January	1984	New Zealand
18th Conference	October	1985	Japan
19th Conference	March	1987	Malaysia/Singapore
20th Conference	September	1988	Australia
21st Conference	July	1990	Turkey
22nd Conference	December	1991	Hong Kong
23rd Conference	February	1993	Philippines
24th Conference	January	1995	India
25th Conference	January	1997	South Africa
26th Conference	January	1999	Macau
27th Conference	March	2000	Malaysia/Singapore
28th Conference	November	2001	Thailand
29th Conference	March	2003	New Zealand
30th Conference	May	2005	Korea
31st Conference	January	2007	UAE
32nd Conference	November	2008	Japan
33rd Conference	April	2010	Australia
34th Conference	July	2012	Turkey
35th Conference	May	2014	Hong Kong
36th Conference	January	2016	India
37th Conference	May	2018	Korea

[winx21 70]

The truth is a painful read..

Anyone know why David Ellis one of the bigger personalities of nz racing never seems to speak out against

anyone running the industry?

and how on earth did Cameron George get the job of chairman??