Chief Stipe

Yep I've regularly posted the turnover data from the TAB and pointed out what was happening. No reserves now and where the hell the next handout comes from is anyone's guess. Come in @JJ Flash!

CEO Tod begins investigating partnering TAB NZ as profits decline by Brian de Lore Published 11th October 2022 Two sets of figures recently released by TAB NZ can only leave you thinking that its diminishing turnover/profit trend is not sustainable for New Zealand Racing as we currently know it. Examining the numbers leaves one in no doubt racing is financially contracting at an alarming rate. Few in the industry seem even aware or bothered about it except for Mike Tod, who has outlined plans in a memo to staff and how he will combat the strengthening headwinds at the TAB. TAB NZ posted its July and end-of-year result three weeks before a memo from CEO Mike Tod came to staff talking of significant future changes. July revealed a betting profit of only $7.3 million, a massive $4.9 million below budget. A year earlier, the betting profit for July came in at $13.4 million, so this year’s July downturn is substantial. The July year-on-year downturn calculated out at a contraction of 45.2%. Even when the figure is adjusted for an extra Saturday in July 2021, it still falls by 32%. $28.9 million downturn off bottom line from previous year For the full year ended July 31st, 2022, the profit came in at $23.5 million below the previous year. But operating expenses blew out to $119.0 million or $5.4 million above the previous year. The bottom line differential between year-end 2021 and year-end 2022 resulted in a shortfall of $28.9 million. Last week TAB NZ posted its August profit which brought in $8.6 million, a 28% contraction in two years from the $11.9 million 2020 result. Rising interest rates, mortgage payment hikes, and a recent sharp rise in the cost of living at the supermarket and other places must affect TAB turnover in the immediate future. The Optimist has highlighted this industry’s woes ad nauseam for years, and I have always believed that the reluctance of the majority of New Zealand racing administrators to partner/outsource TAB NZ with a global betting operator would one day result in having to do by necessity rather than choice. That day has apparently arrived. Memo informs staff of an investigation into TAB partnering In the memo to TAB staff on September 22nd, written by the relatively new CEO, Mike Tod (who started in March), the first two paragraphs read as follows: “A key pillar in our TAB Gameplan growth strategy is leveraging global capabilities to build a world-class betting experience for our customers, and cementing a strategic partnership with a wagering operator at the cutting edge of the industry could be a key factor in us achieving that target. “With that in mind, we have commenced discussions with a small number of international operators to understand how they may help us rapidly enhance our products, services and customer experience while building on the more than $200 million that was passed on to New Zealand racing, sport and communities in the 2021/22 financial year.” Mike Tod’s claim that they passed on $200 million (true figure $140m) is both mischievous and misleading. He’s including the Betting Information User Charges (BIUC) ($23M), Gaming ($14m), and the reduction in the betting levy ($13m), which had nothing to do with what TAB NZ collected. What a shock! The Tod statement contradicts everything NZRB, RITA, and TAB NZ (all the same mob) have previously said for years about the future direction of the TAB. John Allen only thought about building a FOB platform to justify his $680,000pa, and Dean McKenzie had a jealous-driven romantic affair with the TAB and had no intention of letting the Aussies near it. Messara: …partnering will provide significantly increased prizemoney The Messara Review highlighted it as its most vital recommendation of the 17 put forward, and John Messara AM openly stated that without the partnering of the TAB, the door would not open for the opportunity of doubling prizemoney to revive New Zealand racing. CEO Mike Tod has breathed half a breath of fresh air into racing with his memo that a serious, proactive, and positive approach to investigating the partnering of the TAB is happening. Whether or not the reason comes back to simple financial commonsense or the TAB has no option as it faces stiff headwinds is uncertain. Here’s a list of bullet points in the memo to TAB staff that provides testimony to Tod’s thinking on the matter: Tod recognises the benefits of partnering “The objectives of a strategic partnership would be to: “Achieve a customer experience that is on par with leading Australian and global operators.“Partner with an innovative operator that will help TAB NZ extract the biggest benefits and opportunities from its unique assets (in-play, gaming, retail and broadcast).“Balance benefiting from a global product roadmap and having the ability to develop bespoke products that cater to the New Zealand environment.“Have a partner who understands the importance of strong relationships with Government, racing and sport and is prepared to act in the interests of these stakeholders.“Leverage the resources of a well-respected, global operator. “For clarity, the process that has commenced is not about a sale of all or part of TAB NZ. It is about trying to identify a world-class strategic long-term partner.” Tod stresses that it’s not a sale of the TAB but a long-term strategic partnership; what John Messara said should happen in his review four and a half years ago. Substandard options and odds offered by TAB NZ In the above five bullet points, the first suggests an admission that TAB NZ offers its customers substandard options and odds compared to other betting agencies – and punters already know that. The second point mentions broadcast, which might put ‘the wind up’ everyone at Trackside as one of the benefits of partnering is the chance to substantially reduce TAB NZ’s costs which currently amount to a staggering $119 million annually. The fourth bullet point mentions the strong relationship with the Government, which is another way of saying the Government has assumed ownership/control because Winton Peters bailed the TAB out of receivership with a $50 million gift in the 2020 May budget. Bullet point four also describes ‘sport’ as a stakeholder, which is entirely incorrect. Sport supplies the TAB with a product on which to bet, for which they receive a fair fee and fair commission on the profit derived. Sport is simply a supplier. When the NZ Racing Conference and NZ Trotting Conference sought a legal opinion on the ownership of the TAB in 1995, George Barton QC prepared a 24-page report stating that NZ racing clubs “have an irrefutable claim as beneficial owners of the TAB.” Excerpt from the original document called “Off-Course Betting Scheme” approved by the Minister of Internal Affairs and dated 20 September 1950 The racing and trotting clubs had to put up £50,000 in September 1950 to start the TAB in 1951. Sport has contributed nothing in either set-up and running costs over the past 71 years and suddenly can’t claim to be stakeholders, but the clubs of New Zealand have proven themselves very weak in defending their rightful position of ownership of the TAB. The fifth bullet point talks about leveraging the resources of a well-respected global operator. Well, is that comment present because the TAB has bankrupted its own resources? About five years ago, RWWA (Racing and Wagering Western Australia) plugged into Tabcorp’s betting platform for an annual fee of $7 million. Our TAB built its own platform for $50 million, with $17 million annually committed in ongoing costs to Openbet and Paddy Power. NZRB, in their day, seemed to have a mindset of doing a ‘number eight wire fix’ on the TAB to keep intact its misguided nationalistic safeguarding of a betting business it knew zero about – crazy! $150 million upfront for partnering turned down 5 years ago Our FOB platform is already out of date. Some global betting agencies spend as much as $120 million annually on IT development. How did Glenda Hughes, John Allen, and company ever think we could keep the pace up? Five years ago, they concealed a partnering offer from a big corporate betting agency with the upfront payment now acknowledged by insiders as $150 million. On scale, the TAB in NZ never rated a chance to exist alone in a global market, let alone compete with the product. No one with authority at the TAB through all those years and name changes seems to have ever grasped that fact, and most have walked away without an ounce of accountability. In post-World War II New Zealand, we saw four decades of growth and prosperity because the people that administered racing all had skin in the game; they had acquired knowledge through experience, had common visions and a passion for horses, and gave their time at no cost to the industry. They were successful. Then the first minister of racing arrived in 1991, and the retardation began and 14 ministers later, we are still retarding. Most of our administrators today lack horse knowledge and a feel for the industry but, nevertheless, turn up to collect their massive salaries or directors’ fees for attending once a month. Members’ Council has failed The so-called Members Council that selects directors for NZTR has an appalling record – proven by the inability of their appointments to make a meaningful contribution. When the system fails, why continue with it? The faceless TAB board gained their appointments politically through the previous racing Minister Grant Robertson, who also appointed the Chair and CEO of the Racing Integrity Board (RIB) – a retired judge and a retired deputy chief of police. The cost to racing for the RIB now works out at $40,000 a day – every single day of the year. How’s that for value? Cronyism, nepotism, partisanship, self-interest, jobs for the boys, call it what you like, but don’t say that any of these people landed their positions through a fair and democratic process to serve the best interests of racing. Racing’s crooked all right – no doubt about it. But it’s not the people at the coalface. Government interference is killing the racing goose, which bears no resemblance to its once golden colour. It’s gone a dull grey. Hire a QC and contest ownership of the TAB So, why don’t the clubs reunite, employ a fresh QC to do a new appraisal of the ownership of the TAB, and afterwards offer the Government its $50 million back, and reclaim the TAB under the same arrangement as when formed? Under the directive of the DIA, TAB NZ has instructions to hold a reserve fund of $100 million in case it goes insolvent again. My information says they already have $60 million on deposit right now, but what good is that to the codes and participants? Even if Mike Tod succeeds with his partnering plan, it will take one to two years to finalise a deal. In the meantime, racing needs the Government out of its life, and if an agreement fails, the clubs should take them to court based on a favourable review completed by the QC. The marriage is incompatible and the sooner we see an annulment, the better. Doing nothing remains the worst option

16 years ago. Around and around we go.

They won't last long with that model. Still need to make a profit.

Actually where is Mackenzie now?

Where's @JJ Flash when you need him! August Operational Performance Reported Profit for the month was $10.4m, which was $1.4m below Budget. Operating Expenses were $10.5m for the month, which was $0.3m above Budget.

TAB NZ Trading Performance Update - August 2022 www.tabnz.org TAB New Zealand (TAB NZ) provides the first monthly trading update for the 2022/2023 financial year, with the results and highlights for August 2022. The TAB continued to operate through its online and retail channels throughout August. While the Omicron outbreak continued to be a presence and factor, New Zealand remained at the Orange setting in the Covid-19 Protection Framework with retail and hospitality operating through the month. Turnover was down against budget in August, as was gross betting revenue (GBR) and gross betting margin (GBM). A combination of ongoing factors have contributed to August’s result, including the continuing soft economic conditions that impact our customers’ discretionary spend, mask restrictions in retail venues through the month deterring a section of customers from visiting, and race meetings being abandoned due to weather. August once again saw a drop in starters across all three racing codes, maintaining a trend that began in April. Operating expenses were slightly up on budget in August due to restructuring costs, and investments in customer retention and acquisition. The Board will continue to factor in potential developments in New Zealand’s response to Covid-19, the current domestic and global financial climate, and the potential impact of any further ongoing trend of a drop in starter numbers as it assesses future distributions in the 2022-23 financial year. Wagering Performance Summary In August, the first month of the 2022/23 financial year, key performance results for TAB NZ were slightly down on the overall positive trends of the previous financial year. Turnover of $197.9m was 5.8% ($12.3m) below budget. GBR of $31.5m was down on budget by 6.0% ($2.0m) and GBM of 15.9% was 0.1 percentage points below budget. Racing Average NZ thoroughbred starters per race in August was 10.3, slightly below the FY22 average of 10.6, while the peak turnover for a domestic meeting was $2.4m on 27 August for the Waikato Stud Foxbridge Plate Raceday at Te Rapa. The average starters per harness race in July was 9.1, below the FY22 average of 10.2, while the peak meeting turnover of $0.95m was on 12 August at Addington. For greyhound racing, the average starters per race in August was 7.4, slightly below the YTD average of 7.6, while the peak turnover for a domestic meeting was $423k on 18 August at Addington. Sport The top 3 sporting events by turnover for August were the All Blacks test against Argentina ($0.98m) followed by the two All Blacks tests against South Africa ($0.7m and $0.8m). Tennis was the leading in-play sporting code accounting for 22% of in-play turnover while Rugby League was the top pre-match singles sporting code accounting for 32% of pre-match turnover. August Operational PerformanceReported Profit for the month was $10.4m, which was $1.4m below Budget.Operating Expenses were $10.5m for the month, which was $0.3m above Budget. August Distributions Racing Codes were paid $12.4m in distributions and other payments for August, versus $12.3m budgeted. This consisted of TAB NZ Betting Profit (listed as Fixed Distribution in the table below), offshore bookmaker commission fees, which are based on actual turnover (termed Betting Information Use Charges (BIUC) in the table below), and Betting Duty/Levy repeal. Top 10 Racing events by turnover Date Venue Race No. Race description Turnover 27-Aug Te Rapa R6 Waikato Stud Foxbridge Plate (G2) $500K 6-Aug Riccarton Park R8 Winning Edge Presentations 125th Winter Cup (G3) $436K 27-Aug Te Rapa R5 Savabeel 1400 $394K 13-Aug Riccarton Park R10 Christchurch Casino 27th Annual SI Awards 16/09 $309K 20-Aug Ruakaka R7 Noel Reed Memorial $300K 20-Aug Randwick R8 Winx Stakes (G1) $295K 27-Aug Te Rapa R8 Super Seth Mile $295K 27-Aug Caulfield R8 Magic Millions Memsie Stakes (G1) $291K 20-Aug Ruakaka R1 10 September Harcourts for Hospice Maiden $289K 20-Aug Ruakaka R8 Fireco $284K Top 10 Sporting events by turnover Date Code Event Turnover 27-Aug Rugby Union New Zealand v Argentina $978K 14-Aug Rugby Union South Africa v New Zealand $818K 7-Aug Rugby Union South Africa v New Zealand $716K 21-Aug Rugby League Newcastle Knights v Canberra Raiders $494K 12-Aug Rugby League New Zealand Warriors v Canterbury Bulldogs $476K 26-Aug Rugby League Penrith Panthers v New Zealand Warriors $474K 19-Aug Rugby League North Queensland Cowboys v New Zealand Warriors $472K 18-Aug Rugby League South Sydney Rabbitohs v Penrith Panthers $436K 20-Aug Rugby League Sydney Roosters v Wests Tigers $431K 26-Aug Rugby League Melbourne Storm v Sydney Roosters $414K

Explain? Easy to have a big stable and a high attrition rate and survive.

FFS you can run a fast time on concrete - ONCE! A fast time does not equate to longevity for a horse.

They're all fighting for their self interest. None of them are thinking strategically be it TA, Pike or Pitman.

Keep working on it Galah. By the time you are finished there will be no one in the game. May as well have Gypsy pony races with a sneaky bookie on the side.

I can. Can also remember harness races with two divisons in one race with 24 horses running in each division.

BTW resting Riccarton by using the AWT and cancelling winter turf racing isn't going to fix the supposedly premier South Island turf track. Ambivalence and meek acceptance by stakeholders has bought the chickens home.

It's all interconnected. Crap tracks throughout the country limit opportunities. I guess Ellerslie being renovated will help. I haven't seen a decent surface at Riccarton for years.

The Guineas grading has a lot to do with the track. Was Hawke’s Bay canned because the track was going to be too heavy to allow a class horse to win? The best horses don't actually race that well on too hard or too heavier a track. The latter often results in a roughie winning like a Roc de Cambes mudder that doesn't go on to win much else let alone compete in OZ. Given the parlous state of out tracks and the downgrade warnings on our group races will we see more decisions like last weekend?

Remind you of anyone?

One less reason to run them there if the track is fucked. If the leading trainer doesn't give a stuff about the condition of their local track who else is going to? Chickens and roosts.

WTF has that got to do with the Guineas being run at Riccarton?

So the local trainers have just accepted the crap track for the last 30 years? Why?

Um the track?

I told you about 10 days ago you were wrong about the blood spinning.

I agree. A nice big essay from the new COO position but something doesn't quite add up. The track being heavy doesn't mean it is unsafe. As they said they galloped two horses before scratching time and they "went well into it". So obviously no slipping therefore the only safety reason must have been surface water surely? Did key trainers indicate they would scratch if the track was heavy? Has remedial work been done recently and it is still vulnerable to damage? Are they saving it for later in the season? Were they unduly influenced by the trainers of the elite 3yr olds?

Group feature races from Hastings now to be run at Matamata Share on Facebook Share on Twitter NZTR 2 October 2022 The continued wet weather in Hawke's Bay unfortunately resulted in the abandonment of Saturday's Arrowfield Stud Plate (G1) Raceday. While this was a very difficult decision, a waterlogged track and continual forecast rain meant racing would not have been able to be safely held. The Hastings track has had continual rain over the past couple of months but had come back well over the past week although the Moisture meter remained high, indicating the level of moisture under the surface. The track had only had 3ml of rain by 6pm on Friday evening, which was much lower than had been previously forecast. However, with 17ml of rain falling over Friday night, a Track Inspection was carried out at 6.30am Saturday by John Oatham (RIB), Brady Jones (RIB), Darin Balcombe (NZTR) and Richard Fenwick (HBRI Track Manager) along with other HBRI Club Officials. Two horses galloped with senior riders aboard, which were getting well into the track. During the inspection, it continued to rain and the forecast was for this rain to continue throughout the morning. A further 8ml was recorded by 10am. The decision to abandon the raceday was made prior to the scratching deadline to avoid as many horses as possible travelling. Prior to the raceday, contingencies had been discussed, including postponing a meeting to Tuesday should either of the Central Districts racedays be abandoned over the weekend due to the inclement forecast in the region. Postponing Saturday's Hastings meeting to Tuesday was quickly discounted due to the forecast through to the early part of next week. Consideration was also given to transferring the meeting to another Central Districts venue but due to travel of horses, race distances, other options and indifferent weather forecast across the Central Districts, this was not preferred. After consulting with the Pattern Committee and considering submissions made by Hawke’s Bay Racing to move the AHD Hawke's Bay Guineas to Saturday 15 October, the decision was made this morning to transfer the Arrowfield Stud Plate to Matamata this coming Saturday, to avoid the bulk of horses having to travel two weeks in a row. In our view, this would provide the best chance for horses not only in the Arrowfield Stud Plate but also those looking to back up into the Livamol Classic on October 15 at Hastings. The AHD Hawke’s Bay Guineas will also be run at Matamata on this day to give the 3yos the opportunity to head to Te Rapa for the Sarten Memorial on October 22 to continue their path towards the Al Basti Equiworld Dubai 50th NZ 2000 Guineas at Riccarton in early November. The current pressure on the pattern ratings of our 3 three year old races was a key consideration in this decision. The option of splitting the Matamata and Egmont meetings over next weekend along with running both feature races at Hawera, were also considered but were discounted due to logistics and travel. The advertised programs for Egmont & Matamata will remain unchanged with the addition of the Arrowfield Stud Plate and the AHD Hawke’s Bay Guineas at Matamata. Nominations for both races will be reopened with preference given to those horses originally accepted for both the Arrowfield Stud Plate & AHD Hawkes Bay Guineas. There will be an additional $50,000 of stakesmoney added to the undercards of both the Matamata and Egmont meetings, with a $30,000 MAAT 1200m race also to be added to the Waverley program on Thursday, to reflect the lost opportunities for participants as a result of the abandonment of the Hastings meeting. Whilst with any decision there will be differing views as to whether the correct course of action was taken, priority was given to keeping the status of the respective feature races and keeping pathways open for future targets. Darin Balcombe Chief Operating Officer NZTR