TAB just months away from collapse before Government bailout

[Chief Stipe]

TAB just months away from collapse before Government bailout

Thomas Coughlan14:07, Jul 31 2020

 

 

CHRISTEL YARDLEY/STUFF

In May, a $72.5m package was announced for the racing agency, with $50m going directly to RITA.

The TAB and the wider racing industry was months away from complete collapse before a Government bailout of the racing industry saved it.

A briefing to Racing Minister Winston Peters from April warned that the TAB had suffered a sharp drop in revenue thanks to racing and betting ceasing during the Covid-19 lockdowns.

The briefing said that without Government support the Racing Industry Transition Agency (RITA), which owns the TAB, would have to “cease operations” at the TAB.

RITA told Government it needed “assurance of Crown support as soon as possible to avoid that outcome”.

 

 

RITA said the racing industry needed $75 million to survive the crisis, with $56m of that package being required by the TAB alone.

It said the racing industry was already making use of existing budget support packages, but this was unlikely to sustain the industry until August, when the racing season resumed.

“There is a major issue that needs to be addressed if the industry is to survive,” the briefing said.

Officials warned that if the TAB failed, it would be difficult to replace, leading to a further disruption in the industry.

“Liquidation of the TAB would delay the recovery of the racing industry by a minimum of 12-18 months or drive it into a downward spiral from which it might not recover.

 

“This would almost certainly lead to further requests for financial support from the industry,” it said.

RITA forecast the TAB would have revenue of $380m for the year to 31 July 2020, but Covid-19 saw this forecast slashed to $250m.

ROBERT KITCHIN/STUFF

Winston Peters secured a major bailout for the racing industry.

The papers were published on Friday as part of the Government’s release of hundreds of papers relating to the response to Covid-19.

In May, Peters announced a $72.5m package for the racing agency, with $50m going directly to RITA. $20m went to build two new all weather race tracks and $2.5m for the Department of Internal Affairs to look at ways of addressing the sustainability of gambling revenue as more kiwis used online platforms to gamble offshore.

When Treasury was consulted on the package, it noted that it hadn’t “assessed” the information provided by RITA to verify the financial state of the TAB or ascertain what sort of support it may need.

Treasury did say that any financial support should look at helping the TAB in the near term and stay away from “wider issues with the racing industry”.

 

“The detailed commercial scrutiny required may provide an opportunity to consider ways to put the TAB on a more financially sustainable footing in the long term,” the paper said.

Peters has and his racing portfolio have a chequered relationship with Treasury. During the last budget, Peters and Treasury officials butted heads when Peters tried to secure the repeal of a tax on the racing industry.

Treasury officials warned the risk of problem gambling by making betting cheaper could have social consequences that cut against the spirit of the 2019 “wellbeing” budget.

b20-ra20200091-4285392.pdf b20-initiatives-ia-4278244.pdf

[Chief Stipe]

Note the attached documents above are from the DIA and Treasury.  Both make it clear that Racing will require MORE financial assistance.

Also of importance is that the original tranche of funding was only enough to get RITA through to 31 July 2020.  That is TODAY!

[Joe Bloggs]

So does that mean from tomorrow they are trading as insolvent? their forward projections are fairytales, again, so who can trust a thing they say, if it all goes tits up again, the GOV rushes to their rescue? 

Hells bells, someone should go to jail if it does, it's a house of cards, what price honesty? as long as you can protect that wonderful salary package eh? for as long as it takes, and whatever it takes!

[Chief Stipe]

5 minutes ago, Joe Bloggs said:

So does that mean from tomorrow they are trading as insolvent? their forward projections are fairytales, again, so who can trust a thing they say, if it all goes tits up again, the GOV rushes to their rescue? 

Hells bells, someone should go to jail if it does, it's a house of cards, what price honesty? as long as you can protect that wonderful salary package eh? for as long as it takes, and whatever it takes!

Who knows.  Maybe RITA has slashed costs and revenue is sufficient to avoid another handout.  As I said in another thread I find it odd that RITA and co (apart from HRNZ) have not received the second tranche of the wage subsidy.

[Joe Bloggs]

They were spruiking 20mil + in savings, but the race fields revenue was a joke from day1, so that revenue stream will never eventuate, surely the truth has to come out, sooner rather than later I hope.

[Freda]

As for Covid-19 being responsible for downturn, Curious and others have pointed out that Rita has been able to keep operating on Australian racing without being required to pay out any stakes or fund significant broadcasting costs.

If anything, things should be looking marginally better, not worse.

[aquaman]

Mmmmm,  nothing surprising here if my experience with the TAB help desk 0800102106 last week is anything to go by.

Had the misfortune last week to have a scheduled power cut 2 days running, so had no computer to be able to have a bet, so rang the help desk in the morning to get the Jetbet code for the meeting I was interested in having bets at. As I live in a rural area it just wasn't practical to travel the 50kms to my closest TAB agency to manually place bets. So after explaining my situation I asked for the Jetbet No for the Addington dogs. Answer to keep it short, no we are not allowed to give out that information. I explained my position again and asked if you the TAB cannot give me such simple basic information as the Jetcode for the meeting that I was wanting to bet on, then please advise me where I could get it. The advise was to ring a TAB Agency and ask them. Now I'm sure TAB Agency's have better things to do than answer phone calls wanting to know Jetbet codes. The TAB in their wisdom have stopped giving the meeting when placing bets via touch phone which I was reduced to using on this occasion, which meant without the meeting No it was impossible to know where you were betting. After 10 minutes of arguing the operator finally caved in and gave it to me on the understanding this was only going to happen once. F#cken amazing, no wonder they are going broke.

[Chief Stipe]

So any word on how much the Government is going to flick to the TAB this time?  Or has a miraculous recovery occurred?

Any news on Awapuni and Riccartons fund raising for the extra $6-10m each for their AWT's?

[Freda]

9 hours ago, Chief Stipe said:

So any word on how much the Government is going to flick to the TAB this time?  Or has a miraculous recovery occurred?

Any news on Awapuni and Riccartons fund raising for the extra $6-10m each for their AWT's?

I am told ( not sure how accurate is the information)  that Riccarton will be attempting to borrow against the capital realised from the housing development. 

Of course, borrowings have to be paid back.....

[nomates]

31 minutes ago, Freda said:

I am told ( not sure how accurate is the information)  that Riccarton will be attempting to borrow against the capital realised from the housing development. 

Of course, borrowings have to be paid back.....

This industry just doesn't learn , in this economic climate along with Covid and the way racing is travelling , why a racing club would go into millions of dollars of debt to fund what at best could be described as a gamble is beyond me . Along with repaying that debt they are going to have to find extra for the maintenance of the A/W track . I would be asking some serious questions if i was a member . RACE will no doubt be going down a similar path . 

I know a number of people around the CD who are so pessimistic about where racing is going , they still have horses in work or training them but are seriously considering giving it away , simply can't see any upside , and the enjoyment factor is all but gone , it's all a struggle . 

Surely if there is that much money waiting to be made from the housing development they can think of a  better way to utilize the funds .

The start of the A/W sink holes .

[mikeynz]

Then there is the issue with tracks,riccartons been getting a bit of a hard time lately,while washdyke came up pretty good,so many questions that need answers.even if a all weather at riccarton should you close what's generally a good grass surface?

[Freda]

From a completely subjective viewpoint,  training while this ' game changer '  is built is going to be a nightmare. 

We have just had a patch of very settled weather.   Grass gallop tracks have dried up drastically, to the point where any horse slightly vulnerable will take the skin off their fetlocks during work,  even bandaging is not totally successful.  The plough ( our saviour) has been brought back into use.

This, our godsend in dry weather, is going to be lost to us.  Fine, you may say, but you'll have the allweather to work on.  Not for the six or more months it's going to take to install.  How 200 - odd horses can be adequately fast worked on rock hard and rough inside grasses horrifies me,  even if we are allowed the course proper, it will still be pretty hard for the period involved. 

 

Edited August 4, 2020 by Freda

[Joe Bloggs]

Thank you for being 'up front' re the potential for horse injuries etc.......I wonder how many others will do that. We went though the same 30+ years ago when they dropped the wood chip track in at Flemington, no bugger wanted it, it was a loose shitty surface foisted on us by a stupid ill informed committee and subsequently many lost good horses, tendons, splint fractures and a plethora of slab fractures.

Bart and CS were shouting the loudest, as the grass tracks were disgusting due to overload, history repeats, you will witness that, and the owner and trainer lose......ahh, aint life grand,

[Chief Stipe]

5 hours ago, Freda said:

Fine, you may say, but you'll have the allweather to work on.  Not for the six or more months it's going to take to install.

Not wishing to be a totally negative bastard but......  Unless an AWT is groomed correctly for the relevant conditions then it can be just has harmful to a horse.  I just can't seen how in a climate such as Canterbury's (more so Awapuni) that we will get that management right.  I can just see the arguments down at the track between the likes of Freda and Pitty - the former likes a bit of give in the ground and Pitty likes it hard.  You can have either at just about anytime depending on how you groom an AWT.

[Freda]

1 hour ago, Chief Stipe said:

Not wishing to be a totally negative bastard but......  Unless an AWT is groomed correctly for the relevant conditions then it can be just has harmful to a horse.  I just can't seen how in a climate such as Canterbury's (more so Awapuni) that we will get that management right.  I can just see the arguments down at the track between the likes of Freda and Pitty - the former likes a bit of give in the ground and Pitty likes it hard.  You can have either at just about anytime depending on how you groom an AWT.

consistent footing is the big issue...if it is the same all round, it matters not if it is hard, soft, or anywhere in between.  It is the fluctuations that do the most damage.

[Freda]

1 hour ago, Joe Bloggs said:

Thank you for being 'up front' re the potential for horse injuries etc.......I wonder how many others will do that. We went though the same 30+ years ago when they dropped the wood chip track in at Flemington, no bugger wanted it, it was a loose shitty surface foisted on us by a stupid ill informed committee and subsequently many lost good horses, tendons, splint fractures and a plethora of slab fractures.

Bart and CS were shouting the loudest, as the grass tracks were disgusting due to overload, history repeats, you will witness that, and the owner and trainer lose......ahh, aint life grand,

I always wondered why Bart relocated to Sydney.  Guess you just enlightened me as to that.

[Freda]

On 5/08/2020 at 11:55 AM, Freda said:

consistent footing is the big issue...if it is the same all round, it matters not if it is hard, soft, or anywhere in between.  It is the fluctuations that do the most damage.

And, to add....i don't have faith in the maintenance being able to maintain consistency. 

Would love to be proven wrong.

[Huey]

On 5/08/2020 at 11:55 AM, Freda said:

consistent footing is the big issue...if it is the same all round, it matters not if it is hard, soft, or anywhere in between.  It is the fluctuations that do the most damage.

Absolutely and from an entertainment point of view am I the only one who finds it incredibly boring? 

[nomates]

Don't we already have an A/W track in the CD , Castlepoint , mother earth seems to maintain it perfectly . Does sweep it away occasionally but always puts it back .

[Chief Stipe]

18 minutes ago, nomates said:

Don't we already have an A/W track in the CD , Castlepoint , mother earth seems to maintain it perfectly . Does sweep it away occasionally but always puts it back .

There are several AW training tracks - Foxton beach, Peka Peka etc.