I hope at next weeks NZRB AGM someone asks

[NZRacing]

why the NZRB chose as the new Betting Platform betting partner to be Paddy Power. I have some concerns especially when the NZRB CEO states " I simply can't understand why that legislation hasn't progressed to being passed and put in place. It would benefit us by about a million dollars a month." I also wondered so to try and understand why I thought about it and some reasons possibly why are below. One aspect is disturbing and I can't believe it wasn't challenged as any senior management of a Company would be expected to by the board and shareholders.

25 NOVEMBER 2015 Speech to New Zealand Racing Board AGM by Nathan Guy Racing Minister - Of course, we’re not alone in dealing with this challenge. I was at the recent Australasian Racing Ministers’ Conference where the issue was discussed.The Australian States have dealt with the issue internally by way of racefields legislation. However, the country as a whole still faces the issue of international offshore bookmakers.The Federal Government recently announced a similar group to look at the issue, and my officials are keeping a watching brief to share lessons. The report back date for the Australian group is intended to be late December. Given that one of the main focuses on leakage involves the Australian market, it is important that our policy is consistent with theirs.

John you were appointed to the Working Party just a few weeks after your appointment as CEO of the NZ Racing Board and looking back I feel you were of no use  towards its intended end purpose.  These are quotes from you in the media: I am a lawyer who became a postman and then a diplomat, and I’m now a sort of jockey or driver depending on which code you want to look at it through (your actually a  paid servant of the NZ Racing Industry). Obviously that’s an unconventional pathway. A key driver was people asking me to do things and me being willing to say ‘yes’, even if it was a step into entirely new industries and roles for which I had no formal qualifications – this is a testament to the strength of the skills developed in the law.Legal skills can take you anywhere because they teach you to objectively assess and analyse information and to make judgements on the basis of that information. Essentially, that is what you do in any leadership role.

I question your interpretation of ‘legal skills’ especially to objectively assess and analyse information. At the above speech by the Racing Minister you were present to hear him say that the Federal Government had also appointed a working party to look at international offshore bookmakers. You were a lawyer and the NZ Racing Board has lawyers based full time in the NZRB Head Office. Two years later The Australian Government's new Interactive Gambling  Amendment Act  stops people in Australia betting with overseas bookmakers who don't have a licence in Australia.

The media reported that The New Zealand Racing Board may pursue a licence for the Australian betting market, after its customers across the ditch were banned from placing bets on the NZ TAB. The New Zealand Racing Board, which runs the TAB, said the amendment means any offshore bookmakers not licensed in Australia can no longer take bets from anyone in Australia.. The board was aware of the legislation but initially didn't think it would be affected. Once it found the law change had a broader approach, it sought legal advice, but it ended up being included under those banned. 

The law was changed and after this took place the NZRB sought legal advice. So the board was aware of the impending legislation but failed to act in the best interests of the Industry it serves by not seeking prior legal advice.  You were previously a lawyer you have lawyers employed in the building you work in and no one thought new legislation would affect the NZRB. So basically you consider the NZRB to be above constituted law in Australia very bizarre when you knew the outcome. Remember the Racing Minister said at the AGM  Given that one of the main focuses on leakage involves the Australian market, it is important that our policy is consistent with theirs.

The submissions stated in 2015 all overseas bookmakers not licensed in Australia would be banned. Not hard to read between the lines is it as to what was going to happen. Spokeswoman Kate Richards said one possible avenue was for the TAB to get an Australian betting licence. The license should have been sought in 2015 when it was obvious what the final outcome would be. no license = banned. Not licensed your an illegal operator its clear enough to most..

TABCORP submission 16 November 2015 to the Impact of Illegal Offshore Wagering Review.Australian wagering operators should comply with Australian laws, offer their services responsibly and return a benefit to the community. They should do this by paying appropriate levels of tax and fees to government and the Australian sports controlling bodies and racing organisations that supply content.

The NZ Working Party should never had of put forward the legislation changes re overseas bookmakers and TAB’s having to pay a fee for their customers betting on NZ sports. The Australian Government changed the law so overseas bookmakers couldn’t accept bets from punters in Australia. If NZ adopted a fee to be paid on Australian bookmakers taking bets on NZ sports games you don’t have to be that bright to know that Australia would immediately look to mirror it.   Once again the Ministers words echo  Given that one of the main focuses on leakage involves the Australian market, it is important that our policy is consistent with theirs. If the NZRB had of sought and received a license in Australia it would be paying Australian sports a fee. If the NZ race and sport fee legislation had gone through the Australia is coming right back at you. 

Responsible Wagering Australia (RWA) is the independent peak body for the Australian-licensed online wagering industry. Members include bet365, Betfair,CrownBet, Ladbrokes, Sportsbet and Unibet. Last financial year, RWA’s members directly employed 1800 Australians with a wages bill of $204.5 million. Our members paid more than $72 million in GST, $14.5 million in payroll tax and $38.5 million in corporate income tax. Additionally, RWA’s members made a substantial contribution to Australian sport and racing, paying $205 million in product fees with a further $21 million in sponsorships. This stands in stark contrast to illegal offshore online wagering providers that employ no Australians, pay no product fees to sport and racing bodies, pay no tax and directly compete with Australian-licensed operators.

NZ Racing does pay Australian racing bodies but we don’t pay a fee to Australia sports. Those corporate bookmakers would not pay a fee on any bets they take on NZ sport when it isn't reciprocated NZRB paying a fee to Australian sport.

From the NZ Working Party - Given the extraterritorial nature of these issues, collection of these charges would rely on voluntary compliance from offshore operators.  Based on the information it collected, the Working Group considered that high levels of voluntary compliance would be likely. 

Do you really think those RWA members listed earlier are going to pay a sporting fee to NZ Sports when the NZRB doesn’t pay one to Australian sport. Two of those members are owned by Paddy Power eg Betfair & Sportsbet. Paddy Power who are joint partners with the NZRB and even though they pay Australian Racing a fee they don’t reciprocate that with NZ even though their local customers can  bet on NZ racing product but they can’t bet with the host betting agency that funds the product to gamble on.  

 Approximately 85 per cent of sports bets taken by the NZRB are on overseas events for which it does not pay charges to the Country’s concerned. A large proportion of that 85% is on Australian sport. John you said in the media the Industry is missing out on around 1 million a month from not receiving sport and racing fees.  

I doubt it would be that high an amount that the industry is missing out on. What you need to ask yourself is what will it cost the Industry to have to pay a sports fee on overseas events. Not hard to do the maths with an 85% vs 15% scenario.

The NZRB should have sought a wagering license in Australia late 2015 and based an operation in  Australia to compete with them just like Paddy Power did with Sportsbet. The trivial and blasé manner in which the NZRB dealt with the problem was to say in the media ‘   the main thing for customers if they are going on holiday to Australia is to place their bets before they leave’. Leave on a Tuesday and place a bet on a Saturday meeting when fields are out Wednesday, come on that’s the best you can do.

John your quoted saying Legal skills can take you anywhere because they teach you to objectively assess and analyse information and to make judgements on the basis of that information. Essentially, that is what you do in any leadership role. A bad judgement call thinking Australian bookmakers would comply let alone your own new betting partner.

How well did your legal skills take the NZ Racing Industry anywhere but down the garden path. Remember you represented the NZ Racing Industry on this to form part of the Racing Act changes needed.  An Australian bookmaker contemplates a new Merc and a holiday to Vegas or pay that money to the NZ Racing Industry and your thinking a high level of voluntary compliance is happening?

Now the concerning part your betting partner Paddy Power through its Australian betting Agencys Sportsbet and Betfair in June 2016 sent a joint submission to the NZ Internal Affairs who requested any interested parties to express their views on changes to a NZ Racing & Sports proposed fee saying:

Proposal 4: A consumption fee for offshore gambling operators accepting bets from New Zealand 7. The AWC and its members are profoundly opposed to this proposal.

Proposal 5: A ‘use of data’ fee for offshore gambling operators using New Zealand racing and sports information 13. The AWC and its members are opposed to this fee, which is again out of step with the approach of racing/sporting bodies around the world.The AWC also argues that the proposed fees should not proceed in the absence of effective, non-discriminatory enforcement.

https://www.dia.govt.nz/diawebsite.nsf/Files/Racing-Act-consultation-submitters/$file/3-Australian-Wagering-Council.pdf

Voluntary compliance is going to work when your own business and betting partner won’t comply, don’t think so.

When the NZRB partnered with Paddy Power wouldn’t it commercially be expected that as this Company is paying a race fee to Australian Racing and sports then as a sign of good business faith to extend the same arrangement to a company who you have gone into partnership with. Paddy Power will be receiving an annual fee to administer the betting platform plus a % of profit. It’s a one way deal concerned about increasing dividends to shareholders in the UK not the overall viability of the NZ Racing Industry. TABCORP pay race fees to the NZ Racing Industry on a reciprocal basis and you struck a deal with a betting company who doesn't want to comply, not a good look.

 So if  NZ was to pay Australia a fee for taking bets on their sporting codes plus a % to Paddy Power while paying the NZ Sports code the fee on turnover and profit on their individual sports it will just mean less at the end of the day for the NZ Racing Industry. The NZRB actually returned a better profit % yield than Paddy Power did last year on sports and we are told they are going to increase the NZRB profit yield. Paddy Power would rather pay a better dividend to its shareholders than to pay an Industry that helps generate it money. In no possible way should Paddy Power be involved in local or overseas racing. The NZ Industry pays fees to all concerned and to then pay Paddy Power a fee to handle this betting would be another nail in the coffin. Check Paddy Powers Annual Report online with regard to racing yield and compare it to NZRB's the results here are a lot better. 

30 years the NZRB has been taking sports betting and they need an overseas company to manage their betting. All that investment from the Industry in technology and salaries over that long a period to improve knowledge and experience wasted to be hand held by someone who won't feed you..

Your quote John “     Leading an organisation is fundamentally about people: creating a strategy, and organising people to deliver that strategy”. A great strategy when its all one way money traffic with your partner.

 Your quote again I certainly don’t think it’s necessary to have a deep knowledge of an industry to enable you to lead effectively, although it does help to be a quick learner. What I’ve found, now in my fourth industry, is that when you come into an organisation in a leadership role and you really have no particular insight into the specifics of the industry, you are able to approach issues and challenges without the encumbrance of what are often quite limiting industry perspectives of how something might be solved. Sorry as far as the Racing Industry is concerned your dead wrong

Once again “You don’t know if your idea was tried 10 or 20 years ago – and didn’t succeed for some reason.” John did you enquire as to the reason why Typhoon didn’t work and cost the industry 20 plus million? “The launch of Kiwibank was a very challenging time for me”. Challenge now for Kiwibank is deciding which outlets are to stay open.

 Three lessons I learned through experiencing  tricky  times are:

·         1. Keep calm – many people react in a slightly hysterical way to that sort of pressure, and that amplifies through an organisation. I think it’s really important that when you’re in the middle of a difficult situation or crisis, you remain calm and considered to work through the issues to the best possible outcome. –

 You didn’t work through the Australians working Party report to the Federal Government to know the outcome if not acted on. You didn’t work through the issues for the best possible outcome when you signed a working partnership that only wants to take. And the NZ Racing Industry isn't in the middle of a crisis its fully blown.

The international betting market is changing incredibly rapidly. As new technologies become available, people want to be able to bet where they are, any time day or night, on a vast range of products. No good your customers betting when they are  in Australia where a lot of your sports betting is conducted. Have 200 options or 1 it won’t matter the result is zero bet.

 The reason is that we have neither the scale nor the balance sheet to be able to invest in the development of what might be regarded as world-leading solutions with the speed and rapidity that is required. 30 years ago NZ was a pioneer in sports betting and overseas betting countries came to see how it was developed. Now we get hand held after 30 years of knowledge and experience. When you blow a betting App by 8 million on no the balance sheet won't be able to invest.

  I’d also say that sometimes there’s too much focus on disruption, and businesses aren’t thinking enough about continuity – how you secure the long term continuity of a business. Yes the continuity of Australians betting into the NZ betting industry is gone. The disruption must have reached epidemic proportions. So you didn't think about continuity.

One of the challenges in a highly disruptive and rapidly changing world is maintaining the threads of continuity, because in the end people do want to belong to a tribe and community that has a longer life span than two or three years. Your life span at NZRB is coming up 4 years and you failed to maintain continuity..

In the real world your biggest learning comes when you fail. The Industry couldn’t afford you to fail it was already failing.

I’m a serial failure – in the sense that I have done lots that has gone wrong, but the key component for me is that I have been able to stand back up on my own feet again. No unfortunately you received a helping political hand. An Industry is failing and you appoint a person with no Industry knowledge to resolve issues and its future survival then it can’t move forward.

 A leader needs is to continue to be curious about the world, to be interested in new thinking and new ideas, and be able to think about how to translate those ideas into the context of the organisation. You have to talk to the people to be interested in new thinking and ideas, how many customers and people who supply the product for your organisation to bet on have you spoken to? Be curious spend a Saturday at a TAB introduce yourself, go to a training track at 5:30am be curious about the Industry.but its too late now you failed to act. 

I think people have to recognise that you become a much better leader if you go through these processes time and time again. Typhoon millions blown for nothing, betting App budget blown sky high by millions the process continues on into oblivion. The NZ Racing Industry doesn’t have time it has run of that along with money..

During my NZ Post years my relationship was with Jim Bolger as chair of that company. Jim is a master of asking the toughest questions: he will always ask the one question you don’t want to be asked. You might find next week more than one question you don’t want to be asked. Well at least you don't have to worry with the Racing Minister as he doesn't communicate with you. Your past Diplomatic skills let you down there sadly.

The NZRB is paying Paddy Power for 5 years for operation of a betting platform along with a % of turnover and putting nothing back in. They pay it in Australia so how did they get to walk all over you? Your quote again 'the new betting platform will make our prices more equal with our Australian counterparts. No it won't if they don't pay fees like they NZ Industry has to. Its no wonder Dick Turpin & Paddy Power both hail from the British Isles.

So after all the above the one question is why did the NZ Working party think Australian bookmakers would comply when some of them sent submissions to Internal Affairs who were also represented on that working party totally opposing to pay a fee. And why did you as CEO of an Organisation allow an Industry to partner with a company who doesn't and wont pay race fees and you dump the organisation that does.   The Racing Minister kicked your legislation determination to the curb because he knew the implications if it went through.  

Allen's time at Mfat has been dogged by controversy, from a difficult restructure conducted throughout 2011, to the botched handling of the Malaysian Diplomat case, where a junior official was allowed to leave the country after being arrested and charged with attempted rape.When the details of the Malaysian case became public it emerged that Allen was completely in the dark about the case at the time until media began asking questions, despite Mfat formally urging Malaysia to waive diplomatic immunity. I certainly don’t think it’s necessary to have a deep knowledge of an industry to enable you to lead effectively, although it does help to be a quick learner. What I’ve found, now in my fourth industry, is that when you come into an organisation in a leadership role and you really have no particular insight into the specifics of the industry, you are able to approach issues and challenges without the encumbrance of what are often quite limiting industry perspectives of how something might be solved.

Very hard to solve things in the dark John. 

I will leave you with a final quote from the NZRB CEO 'I’m a serial failure'