Interesting read

[BitofaLegend]

Found this a very interesting read posted up over on racecafe by AC Roberts (not my post)

"The Letter the Informant will not publish.

 

Long time greyhound breeder owner who runs a successful accounting practice , Tom Rodewald , has sent me thru a letter he has tried to get the Informant to publish. They I gather are showing no interest and this is not surprising in view of the facts contained within the letter. It seems the horse codes are not providing a subsidy to the greyhound codes rather it is the other way round. !

 

Tom letter reads

Over recent months there have been a number of articles and letters to the editor dealing with racing industry distributions in The Informant.

One claim made by your columnist Brian de Lore was that greyhound racing, he understood, was being subsidized by the thoroughbred code to the tune of $5m per annum.

It has been a common thread in letters to the editor that thoroughbred racing does not receive the full benefit of earnings from the export of its product. Further it is being stated that Section 16 of the Racing Act is unfair on the thoroughbred code as it focuses industry distributions on domestic turnover share.

Fact or Fallacy?

Over the past few weeks I have trawled through publicly available information and also made the odd enquiry to try and ascertain the true position.

From the publicly available information we can establish in the 2017 season that:

1. Section 16(3) of the Racing Act that requires racing industry funds to be distributed based on NZ domestic code turnover has not applied since 2011 and did not apply in 2017.

2. it appears that betting on greyhound racing via the NZ TAB was 20% of total racing turnover.

3. it appears the gross betting margin the NZ Racing Board earned on greyhound turnover exceeded that of harness racing.

4. the export turnover commission received by the NZ Racing Board on greyhound racing was approximately 31% of its total export income.

5. the greyhound code received only 16.1% of the distribution made under Section 16.

6. a quick calculation indicates if the racing industry distributed its turnover based on each code receiving its share of gross betting revenue and its actual export commission earnt the greyhound racing share of the pie would have grown by approximately $8.8m.

It seems to me on figures published the thoroughbred export turnover percentage was well under 50% of the total racing turnover in the 2017 year. Allocating export turnover by each code on an actual basis would have disadvantaged the thoroughbred code.

Anybody interested can download my full analysis and some pertinent comments via my website http://rodewaldconsulting.co.nz/blog/racingindustrydistribution/

 

T L Rodewald Chartered Accountant

Accredited Insolvency Practitioner"