curious

Same. Will be all in trees in another 12 months. One small paddock left (just in case I change my mind!). Tie-ups converted to a workshop a couple of months ago. Incredibly sad. 40+ years with a thoroughbred in sight 24/7 and my retirement dream was 2 or 3 in work. Went out the window 5 years ago.

Maths test. Anyone work out how $17m p.a. can be guesstimated (note the spelling error too..is this bloke a journalist?) to total $130m over 10 years?

The introduction of FOB was a long time ago TC. 1996? from memory. That probably underlies some of the problems currently faced but it's an awfully long time ago to blame trainers then for not intervening effectively as an excuse for today's situation.

More evidence to help you assess the question in the header. Open letter to Minister Winston Peters The Optimist www.theoptimistco.nz the optimistnz@gmail.com Rt Hon Winston Peters Deputy Prime Minister Minister of Racing Minister of Foreign Affairs Minister for Disarmament and Arms Control Minister of State-Owned Enterprises 3rd October 2019 Dear Winston Re: Your letter 2019/20 Ministerial Expectations of the Racing Industry Transition Agency I decided to write to you personally in response to the publication of your Letter of Expectation to RITA Chair Dean McKenzie which inexplicably appeared on the RITA website last week for reasons unknown despite the fact the letter was two months old. Yes, it was receipt stamped 25 July, but no date appears on the actual letter – very strange!. Being a suspicious type which was conditioned into me through reading so many NZRB Annual Reports, I decided to ask you personally if you could clear this mystery up, and in the interests of transparency for the racing industry, I further decided to make it an open letter. So, did you tell RITA to post that letter on their website? I’m presuming the answer will be yes because RITA would not have suddenly posted it two months after the event of their own volition, given that the contents of the letter was in-reality putting the RITA board on notice; giving them a bit of a euphemistic smack around the ear to incite some action – that’s the way I read it – how could it be anything else? A couple of readers of my blog independently of each other, both involved full-time in the industry, claimed you were throwing the RITA board under a Wellington bus (one that was running late) and wiping your hands of the industry, and saying ‘I’ve done all I can and you’ve let me down.’ But I reject that accusation. I didn’t see it that way at all. On the blog I posted two weeks ago, I highlighted four or five promises listed in the NZ First pre-election racing manifesto that had not come to fruition. Not for a moment would I presume or suggest the release of your letter had anything to do with that, but I find it interesting, and I’m sure that most stakeholders in the racing industry also find it so, that you thought RITA needed a stern reminder of the reasons for their existence. And the reason for RITA’s existence, which formerly was MAC, is clearly stated in the MAC Terms of Reference released in January and confirmed in the MAC Interim Report which your office released in April. And that is to operationalise the Messara Report which at this point in time, in this writer’s view, is clearly not happening. Why it’s not happening is very much a mystery, but in the end it probably comes back to leadership; it comes back to decision making or the complete inability to make a decision. It comes back to getting the job done, transparency, and accountability which RITA said they would have but haven’t delivered. We still have none of those attributes, so the question is, Winston, do we have another ‘wolf in sheep’s clothing?’ In a TV interview last Sunday, RITA CEO Dean McKenzie made it very clear that RITA has no appetite for a partnership outsourcing of the TAB. When questioned about the future of the FOB he said, “The betting platform is there, so the industry has invested a significant amount of money in it – the decision has been made – so we have all got to get on and make the best we can of it .” Without outsourcing, Winston, this industry has a very bleak future and not to outsource flies in the face of the priority recommendation of the Messara Report and would deny racing its most significant revenue income stream for increased stakes money. What we currently have is the same NZRB/RITA leadership team lead by CEO John Allen who apparently hasn’t gone on gardening leave after all, and RITA which is a board that’s met four times and therefore not involved in the day to day running of the industry. And who can RITA be listening to and gleaning advice from on the direction they take going forward – certainly not the codes. No, they can only be collaborating with the same executives who all remain employed – the same team that has cost racing $200 million in the past five years. In your letter to McKenzie you say, “The Government remains committed to resolving key long-term challenges facing the country including sustainable economic development, increased exports, decent jobs paying higher wages, a healthy environment and a fair society and good government.” That may be so – your commitment, that is. But the next bit you wrote is entirely wrong. You say: “The racing industry is well positioned to contribute to addressing these challenges.” The racing industry is not well-positioned at all. Just the opposite, in fact; it’s bleeding, badly hurt and dying a slow death. Everyone knows, Winston, that you are busy with Foreign Affairs, and all that other stuff, and have only two hours per week to devote to racing – and fair enough. But in the last month I have been visiting racing people in the Waikato, Hawkes Bay, Otago, Southland, and Canterbury, and I can tell you that many are distressed or penurious or as some Aussies might say – flyblown! One breeder in Southland said, “unless we get some good news from Winston in the next few weeks, my eight mares will not be bred this breeding season.” Also in Southland, a prominent trainer categorically stated he would retire if stakes did not increase in the near future. Your letter also makes some excellent points to RITA including what Cabinet agreed to on April 15: “agreed to the overall intent of the Messara Report as providing the best approach to delivering a New Zealand Racing Industry that is financially sustainable, internationally recognised and competitive.” The letter also goes on to say: It is expected that RITA will: Change leadership • lead a programme of change to return the industry to a well-managed and sustainable growth path • deliver on the Government’s intentions by taking decisions in the commercial interests of the industry – considering the long-term vision for a revitalised and sustainable industry, where participants are valued and able to prosper and the industry contributes to its full potential for the benefit of the NZ economy. • make best use of the $3.5m Crown contribution to the cost of industry change – ensuring that this funding ‘buys change’ rather than underwrite business as usual activities. The $3.5 million mentioned above was part of the last budget, and it clearly states it’s for the cost of industry change. So, why isn’t it being used? What is RITA waiting for? RITA was MAC and between the two they have had nine months to plan and execute substantial changes – the industry doesn’t buy into the excuse currently used about RITA’s ‘newness.’ Winston, the RITA comment on cost reduction: “We expect the costs to be less,” which was conveyed last Sunday on Weight-In, is the same vernacular we heard from NZRB. What are the real cost reductions? When can we expect to see a budget for the current season? We are now into the third month of the season and no Statement of Intent. The commitment made by RITA in the Interim Report was to be inclusive and transparent with the participants of racing – it hasn’t happened. Last week I made an error when I stated NZRB/RITA were $25 million in debt to the bank, but since then, digging around I’ve discovered the figure is $10 million higher at $35 million. Chairperson McKenzie said that RITA was not borrowing any more money from the bank, but what he didn’t say was the nothing was paid off the debt when due at the end of July. If RITA has rolled over the debt into the new season isn’t that effectively reborrowing it. I also slipped up by saying the Paddy Power commitment was for ten years, and Openbet was for five years. On checking up, I found it was the other way around, but it doesn’t alter the commitment to pay $17 million annually which is guestimated to total $130 million over the ten years. Overall, your Letter of Expectation was confirmation of what should be happening, but nothing tangible has so far come out of it for the stakeholders – and you sent it well over two months ago. As one observer remarked privately during the week: “We have seen a lot of hui but not much do-ey.” More importantly, the finances don’t stack up – anyone who reads January’s Half-Year Report from the NZRB, studies the TAB figures, and has access to a calculator will soon be able to work out we are diving head-first into a large bin of wet horse manure. In the meantime, before that occurs, on behalf of the industry we all hope you are now fully recovered from your old rugby injury procedure? Please note that on your list of Ministries at the top of this letter I have elevated Racing into first place from fourth above Foreign Affairs – more in hope more than in expectation. Yours sincerely The Optimist

True. And another board, another CEO on megabucks. All managing what is most likely to be a diminishing revenue stream. That's maybe what Messara meant by "economies of scale"?

Wasn't racing great when we had proper handicaps?

The P&E audit is 5 yearly. I understood eljay to be asking about annual audits.

No annual audit of anything else I'm aware of.

Presumably the annual accounts?

An auditor?

Oh dear. Where has he been? I'm beginning to see why the likes of the Informant have gone overboard if they were employing the likes of BdL to write editorial content. Pretty sure I read that letter two months ago when it was first posted on the DIA site. Now he writes about it as though it's news. Post says 25 July. https://www.dia.govt.nz/Racing-review Hopeless.

I agree "Let do this" sometimes works.

Maybe "best practice" should be redefined as "getting the job done"?

Perhaps it was that those editorials spruiking ridiculous uninformed strategies and forecasts became a bit old and folk stopped buying subscriptions?

Of course the Informant loss is entirely responsible for $1m a week decline in turnover this year? Bitter and twisted?

Probably a piece that doesn't deserve the light of day but just for the craic, here it is. Down in the mouth and critical of the same person and outfit that produced the figures which a matter of weeks ago he was blindly (what causes that again?) inciting everyone to believe. No time for celebrations; only lamenting the BBA by Brian de Lore Published 19 September 2019 The object of The Optimist as a weekly blog is to try and keep the truth flowing and the participants in the thoroughbred world informed on various important aspects of racing and breeding. It gets harder when some administrators close ranks and won’t talk, but funnily enough, it then becomes more intriguing. Over the past few years, I have developed a network of informers and supporters who are reliable and more than willing to help for one reason only – they love the game and want desperately to see it recover and achieve sustainability. They are racing people who possess passion; they know and live racing. Had it not been for them, I may long ago have curtailed this campaign of disseminating facts from the fiction and calling for justice on behalf of people at the coal-face of racing. They encourage me weekly and that’s what drives the blog. I merely write it but rest assured, it’s a collaborative effort which is mostly driven by a few die-hards who also refuse to allow racing to go down without a fight. Communication is everything, and almost everyone I speak to sorely misses The Informant. So many people relied upon it, and I don’t believe NZRB had any understanding of how valuable its form guide has been for TAB turnover. Directly from a TAB outlet this past week I’m told the retail side of the TAB is $1 million a week down on last year’s figures which were also down on the previous year’s numbers. It makes you wonder why the TAB denied The Informant free access to the form which necessitated the form’s purchase from Australia at an annual cost of $100,000. That was the main reason The Informant fell over, and the day it did, a spy communicated that TAB employees were high-fiving in the halls of the NZRB at Petone. That’s how sick these people are – all in the misguided belief the TAB’s money-losing publication known as Best Bets had scored a victory and would benefit with increased sales – perhaps my continual justified criticism of NZRB may also have been a factor. The circulation of Best Bets declined considerably under NZRB’s management; the unconfirmed talk is that it went from 3,500 down to 1,500 after NZRB reputedly purchased it for $250,000 when it was losing money and was effectively worth nothing. It continued to lose money and is yet another example of their fiscal irresponsibility. So, I’ve written seven paragraphs and haven’t mentioned the name of John Allen (until now). By this time everyone will know Allen resigned on Monday morning and officially will depart in December. However, it will not be surprising if gardening duty becomes his main activity between now and Christmas – perhaps only punctuated by questions from RITA arising from his decision making over the past four and a half years. It is no coincidence Allen’s resignation comes soon after RITA’s receipt of the Performance and Efficiency Audit from Grant-Thornton and the financial year 2018-19 audit by Price Waterhouse Cooper. They will be telling documents that will eventually become industry knowledge as we near the RITA AGM before the end of the year. Much of the content in Allen’s resignation statement to the media can be disregarded. The quotes were typical of an agreement between two parties when someone is getting the shove. They always say beautiful things when the letter writer is ushered through the door. And while I’m doing acronyms, it’s worth mentioning BBA which is a well-known one in the thoroughbred world – British Bloodstock Agency which has been a big player in the sale and purchase of horses worldwide for more than 100 years. But BBA in New Zealand could be construed as Brown, Bayliss, and Allen. They are the all-in-a-row last three CEO’s of NZRB. History will record them as a trifecta of characters who have left the horse industry with a legacy of unmitigated disasters – I can confirm that will be recorded in history because I’m currently in the process of writing the book. What can’t be allowed to happen is that the powers-that-be go for the First4. The cycle must be broken, and the criteria for the next appointment changed. The BBA common denominator of high academic qualifications, no skin in the racing game and no previous knowledge of the racing industry is a losing combo. V’landys type people are rare commodities, but if RITA could come up with someone half as good it would be a vast improvement on the BBA. Allen’s departure is a positive move forward, and while it will open the door for further inroads into cost-saving, it is only the first of a thousand steps. Below is a welcome letter of support received this week from NZ Trainers’ Association: Hi Brian, The Trainers’ Association wishes to record its support for the recent articles dated 5th and 13th September, you wrote and included on the blog, The Optimist. The Executive share your concerns regarding the perceived lack of progress in regards to the reforms as outlined in the John Messara Report. It is understood that the legislation has proceeded as planned with a focus on new revenue streams. However, there does not appear to be any urgency in the actual collection of this revenue, nor addressing the reduction of overhead costs at RITA. Dean McKenzie and Anna Stove attended the National AGM of the Trainers’ Association in August. The notes from the meeting follow this email for your information. Many of the concerns raised echo the views expressed in your blogs. The Trainers Association is very aware of the need for urgent action as the situation is so dire. There are many trainers very close to being unable to continue as their livelihoods are at risk due to the current state of the industry. Regards, Wendy Cooper Executive Officer NZ Trainers’ Association Inc

Worse than turnover ... profit. Down $37m on wagering as I understand it.

Sorry, I missed that one. Classic!

Interesting way to assess the validity of something though. Probably many of the best, well thought out and well-argued posts I've read on these sites were made by anonymous posters. Do you have any other criteria for assessing the value of posts PJ? Gender, skin colour, type of employment, wealth etc.?

Wait PJ. Are you suggesting that the posts and opinions of identified posters are somehow more valuable than those of anonymous ones?

That's the trouble with free speech. Just because something's free doesn't necessarily mean it is of any value.

I note in that now year old summary that I did suggest that some ideas in there might be worth further work and/or the development of a clear business case. That said, a year on and there doesn't yet seem that any such things have emerged although it is possible some advances might be included in the MAC final report but as far as I can see that has still not been publicly released. You have to remember that Messara is a big breeder and the report reads more like a collection of ideas from the local big breeders than a robust analysis of what might optimise wagering revenue in NZ and grow the industry. The government has bought it though so we'll have to live with the implementation and outcomes. I'm not very hopeful about those and I think that the supposed savior of racing (Peters) and the Messiah may go down in history as managing to preside over the final demise of NZ racing as we know it, all in one brief political term.

curious Posted September 25, 2018 (edited) Here's a brief crack at that Hesi. Recommendations 1. Change the governance structure, so the NZRB becomes Wagering NZ with racing responsibilities devolving to the individual Codes. This will sharpen the commercial focus of TAB operations and improve the decision-making and accountability of the Codes. Something along these lines possibly a good idea. Worth more detailed development. 2. Establish Racing NZ as a consultative forum for the three Codes to agree on issues such as entering into commercial agreements with Wagering NZ, approving betting rules and budgets for the integrity bodies, equine health & research, etc. Same as 1. 3. Change the composition and qualifications for directors of regulatory bodies. Yes, definitely needs sorting. Again, the devil is in the detail. 4. Request that a Performance and Efficiency Audit of the NZRB be initiated under section 14 of the Racing Act 2003, with particular emphasis on the operating costs of the NZRB. Absolutely. Required under current legislation anyway and overdue. The right reviewer and terms of reference to address some of the matters in this report is critical. 5. Amend the Section 16 distribution formula of the Racing Act 2003 to a more equitable basis for fixed 10-year terms. Don’t think the report makes a sensible case for this. Should remain proportionally based on domestic revenue generated. 6. Initiate a special review of the structure and efficacy of the RIU and allied integrity bodies, to be conducted by an independent qualified person. Yep. Probably should be devolved back to the codes. Has been a disaster as currently structured. Critical ingredient for increasing wagering revenue that integrity system is much more robust and reliable and seen to be so by punters. 7. Begin negotiations for the outsourcing of the TAB’s commercial activities to an international wagering operator, to gain the significant advantages of scale. Worth considering but detailed business case needs to be made alongside alternatives. In particular, retaining the tote business and making it globally competitive and licensing fixed odds operators in NZ (with a restriction on tote derivative products) should be considered. 8. Seek approval for a suite of new wagering products to increase funding for the industry. OK. But not likely to improve revenue. Adds to costs and unlikely to increase overall punter spend. 9. Confirm the assignment of Intellectual Property (IP) by the Clubs to the Codes. Don’t see the point in this. Clubs may be better to retain and control this themselves. Needs work and a better case made. Can club and community assets be co-opted legislatively or lawfully? 10. Introduce Race Field and Point Of Consumption Tax legislation expeditiously. These two measures will bring New Zealand’s racing industry into line with its Australian counterparts and provide much needed additional revenue. Race fields, yes of course. But legislation not required for arrangements with corporate bookmakers to be put in place as already demonstrated. RB estimates wildly out of kilter with the reliable research. DIA estimates more robust. I’d say might get to $3-5m net across all codes. PoC tax, nope. See DIA estimates that administrative costs may exceed revenue. Providers already paying a consumption tax in the form of GST. If implemented any net revenue should go to taxpayer not racing anyway. 11. Repeal the existing betting levy of approximately $13 million per annum paid by the NZRB, given that the thoroughbred Code is a loss maker overall, with the net owners’ losses outweighing the NZRB’s net profit. Nice if you can get it. Note that some $50m of duty relief previously granted has been wasted on stakes and operating costs. Industry didn’t do what they said they would with that so why should the taxpayer gift more to a declining industry, or any industry for that matter. Also, an equity matter with casinos betting duty. Probably politically unpalatable. 12. Clarify legislation to vest Race Club property and assets to the Code regulatory bodies for the benefit of the industry as a whole. Big NO. Can’t legislate to colonise community and club assets. Needs to occur voluntarily at the discretion of club members where clubs will no longer have raceday licences. They should decide whether assets are put to other uses in the community. Any reinvestment in racing will also mostly have to be in the same region. 13. Reduce the number of thoroughbred race tracks from 48 to 28 tracks under a scheduled program. This does not require the closure of any Club Yep. No brainer but the redevelopment of remaining tracks needs to occur first in order to have an infrastructure in place that can cope with the racing required. 14. Upgrade the facilities and tracks of the remaining racecourses with funds generated from the sale of surplus property resulting from track closures to provide a streamlined, modern and competitive thoroughbred racing sector capable of marketing itself globally. Yep to the upgrades but the business case for that needs to be funded from current and future revenue and be sustainable. 15. Construct three synthetic all-weather tracks at Cambridge, Awapuni & Riccarton with assistance from the New Zealand Government’s Provincial Growth Fund. Support the development of the Waikato Greenfields Project. Yep in principle. Again, the initial cost and ongoing maintenance needs to be funded from current and future revenue increases. The business case is not made in the report. Needs more detailed work. That should include comparison of synthetics with Strathayr for these AWTs. 16. Introduce robust processes to establish traceability from birth and the re-homing of the entire thoroughbred herd, as the foundation stone of the industry’s ongoing animal welfare program. Fine. 17. Increase thoroughbred prizemoney gradually to over $100 million per annum through a simplified three-tier racing model, with payments extended to tenth place in all races. Great but it is not clear where the revenue or cost savings to do that will come from other than some from the restructuring perhaps. Recommended changes as above will not on their own make the NZ racing product competitive or attract more wagering spend. That also requires, among other things, aligning the prizemoney structure more closely to revenue generated and having a fair and competitive handicapping system for starters. Edited September 25, 2018 by curious

I doubt it. Have you noticed the impact? The last I saw there were 34 (from memory) operators paying product fees to RITA on NZ racing. However, they (RITA) are paying out $27m more to the codes than their net earnings and compelling the codes to waste that on stake money. To make matters worse, RITA, which already scooped up a hospital pass, has been instructed by the Minister that they must continue to pay it. Short of some sort of divine intervention, where is the revenue going to come from to remedy that deficit let alone grow earnings? There remains some belief out there that the PoC tax will mitigate this but I don't see how. Despite the short term problem of implementation and collection costs (remember the DIA estimated these may exceed the collected revenue) there is the longer term issue that it will come directly from punters' pockets and we already know that punters en masse are not keen to suddenly start losing more nor do they like losing faster. Yes, there's $14m p.a. coming courtesy of the taxpayer over the next 3 years by way of the duty relief but that seems like a drop in the bucket to me.

NZ racing to boost wagering audience through Sportsbet deal 15 August 2019 The New Zealand Racing Industry Transition Agency (RITA), the body established to oversee the development of a new governance structure for the country's horseracing industry, has struck a deal that will see Sportsbet launch live streaming of races in Australia. Through the agreement Flutter Entertainment-owned Sportsbet will feature live streams of thoroughbred and harness racing, as well as greyhound racing events, on its Australian site. Tabcorp, the long-term broadcast and wagering partner of the New Zealand TAB, will act as intermediary, facilitating delivery of the content. “The new deal involves Sportsbet taking live vision of all three codes of New Zealand racing, getting our racing in front of a big new audience in the Australian market that we’ve never been in, while bringing in a new revenue source for the industry,” TAB general manager for media and international Andy Kydd explained. “Sportsbet is the largest corporate bookmaker in Australia by a stretch and the second biggest operator in the market behind Tabcorp," Kydd continued. "We are very grateful to Tabcorp for delivering the vision to Sportsbet, their biggest competitor in Australia.” The agreement follows a deal between IITA and another Flutter-owned brand, Betfair, announced earlier this year. This saw Betfair agree to pay product fees to the TAB in return for offering odds on New Zealand racing. Similar agreements, as part of a wider drive to revitalise the country's racing industry, are being negotiated with other Australian operators. Announced in April this year, the New Zealand government aims to halt the industry's decline, with the existing horseracing levy to be phased out over the next three years. In 2018, the levy generated, NZ$13.9m (£7.4m/€8.0m/US$8.9m), representing 4% of overall betting profit in the country, with these funds to be reinvested in racing and sport going forward. This also saw the New Zealand Racing Board replaced with the RITA, to manage the transition to a new governance structure. While the government's plans specifically ruled out implementing a licensing model for betting operators, it will look to impose a point of consumption tax on offshore operators taking bets in the market. This may be complemented by an expansion of legal products - and potentially a licensing system for certain verticals - after a public consultation to gauge public support for regulating new forms of online gambling was launched earlier this month. With technology developing rapidly, and gambling legislation unchanged since 2003, the government aims to ensure customers are protected from the negative effects of gambling. At present, only Lotto NZ and the TAB are permitted to offer gambling products online, though the government acknowledged that an increasing number of New Zealanders were gambling via offshore providers, especially in minority communities.