Racing Reform Bill out of the gates

If you ever wanted to know just how the racing industry is perceived by those who run the country, then tuning into watch proceedings in parliament on Tuesday would have left you with a clear picture.

From being an industry where most of those stalking the corridors of power had at least some passing interest, racing has declined to something from the dim distant past. Most of those speaking were left scrambling to find a tenuous racing tale to demonstrate their connection.  And that was just those on the government’s side of the House.   The Nats, once natural bedfellows of the racing industry, showed a mixture of relief that they no longer had to deal with the seemingly, never-ending demands from the racing brigade and outright antipathy.

The occasion was the first reading of the Racing Reform Bill which is being fast-tracked through select committee and scheduled to be reported back to the House by 11 June.  If you’ve read the RRB and have any thoughts about making a submission to select committee then you will need to be quick.  That window of opportunity, currently open, will slam shut on Tuesday 4 June – the initial date was Monday until someone realised it was a public holiday.

While long-time watchers of the theatre which surrounds our law-making will have seen through much of the posturing and playing of roles on Tuesday, the uninitiated were possibly left astounded.

Here I have to confess that I have, on occasion, watched Question Time at parliament purely for the amusement value.  But the amusement value on Tuesday was limited due to the fact they were talking about something close to my heart.

Even knowing that everyone in the House was playing a role, and  the arguments were focused on not giving a sucker and even break (with the sucker being those on the other side) rather than doing anything to advance the cause of the racing industry, it was not an easy watch.

Make no mistake, politicians don’t particularly like the racing industry. Not all of them are as honest as Gerry Brownlee who described racing as “dull” but scratch any of the hokey old stories told to demonstrate some form of kinship with the industry and you will find a card-carrying opponent to our industry.

Sure, they will show up when they have too – usually around election time, but they would rather have nothing to do with us.

It wasn’t always so.  Back in the ancient past – around the time of the formation of the TAB, whose ownership Mr Brownlee is so keen to determine, many MPs were prominent racehorse owners.

One of the Wellington Cup winners (at Trentham, the track whose name Mr Brownlee struggled to recall) that my grandfather trained was owned by the then-Speaker of the House Sir Matthew Oram.

It made sense for MPs to have some involvement in racing, given that at the time the local racecourse was the perfect place to meet with a wide range of one’s constituents.  This continued to be the case through to the early 1980s.  Former MP Marilyn Waring, while revisiting the fight to get female jockeys licensed, told me she was a regular attendee at the Waipa races during her time in parliament for that very reason.

The world has moved on and politicians have no real need for racing any more.  Of course, the industry itself is not blameless when it comes to the disconnect between the industry and all-but-Winston.

Who wouldn’t lose patience with an industry which, despite numerous Royal Commissions, Reviews and Recommendations designed to drag it (kicking and screaming) into a bright new future, managed to find new and different ways to muck things up?

Is it any wonder the politicians manage to side-step any possible engagement with industry representatives when they are constantly presented with problems and never solutions?

The industry has a long history of shooting itself in the foot with politicians.  Bad mouthing them and their efforts to drag the industry out of the mire and then acting surprised when future efforts to get alongside said politician are met with the cold shoulder.

Racing administrators have, over the years, behaved like that annoying whiny kid-adult who having left home years earlier still can’t understand why his parents won’t keep funding his lifestyle.

Presumably the Racing Reform Bill will get across the line in the prescribed (truncated, according to the Nats) time-frame and we will be off into another brave new future with any amendments or changes agreed upon throughout the process.

While there were some cringe-making comments during Tuesday’s first reading Gerry Brownlee, despite his apparently loathing of racing, did also offer a credible piece of insight into what has helped stymie the industry over the years.

“I think every effort that they’ve made, commendable as it is, falls short because the industry itself have never been prepared to take into their number—to put on their boards, to bring into their fold—people who have a bit of an entrepreneurial bent and a considerable love for the horse racing sport,” he said.

Gerry, you said a mouthful!

 

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Peculiar document damns clubs to a bleak future as they battle “process”

Whereas most of those who spent the time and effort putting together a submission to the DIA on the contents of the Messara report one group of clubs furnished an eight-paragraph diatribe.

Avondale, Bank’s Peninsula, Central Otago, Egmont, Gore, Kurow, Oamaru, Reefton, Rotorua, Stratford, Wairoa, Westland, Winton and Woodville, along with “supportive tenant clubs”: Beaumont, Tapanui, Wairio and Wyndham have pinned their collective futures on this peculiar document.

Their “submission” is entitled “Collective statement concerning DIA process” and, rather than considering the future of the industry as a whole is focused solely on what they, through their representative Murray Blue, describe as a “land grab.”

(For those younger readers who might not be well acquainted with previous racing activities of Dr Blue click here for a little background).

These clubs, in the “submission” which bears their names, also appear to be putting words in the deputy Prime Minister’s mouth – never a wise move – claiming Winston Peters, at the launch of the Messara report: “adopted the Messara findings unequivocally and without providing for consultation with clubs.”

Obviously, Dr Blue and his merry followers must have been listening to and reading totally different speeches and press releases to the rest of us.

What our Racing Minister actually said was that the Messara Report “confirms what many of us have been worried about for a number of years and highlights the need for the industry to turn itself around.”

He went on to state: “The government will now take the opportunity to fully assess Mr Messara’s report.  My intention is to have officials produce a Cabinet paper with a set of recommendations for decision.  While it is too early to say what Cabinet will agree upon, the severity of the situation means the status quo is unlikely to prevail.”

“As this review identifies, a complex task lies ahead and for that reason Cabinet will also consider establishing a transition agency to help guide the process, particularly if there are changes to racing governance,” he said.

Submissions were called for in mid-September, giving plenty of time for those who may have experienced a knee-jerk reaction to actually read and re-read the report in its entirety.  At that time the Minister said that the review “delivers a blunt appraisal and concludes the New Zealand racing industry is in a state of serious malaise.”

“It is important that those most vested in the industry have the opportunity to provide feedback on the recommendations,” he said.

This was the chance for those clubs who were feeling marginalised because their venues were slated for closure to make a considered bid for reconsideration.

Instead, what happened?  Somehow those clubs listed earlier decided to pin their hopes for a future where nothing changed on a document which did not address one of the recommendations raised in the Messara report.  Instead it dwells only on the approach taken to arrive at the recommendation around the need for track closures.

Their argument was akin to that of a tantrum-throwing toddler in a playground spat – it’s not fair!

Apparently, it was not fair that the clubs “were not in any meaningful way consulted by John Messara in connection with his ultimate conclusion that the property assets of selected individual clubs should be confiscated by NZTR via legislation.”

It was not fair that “in a number of instances John Messara with his NZTR or ‘major club’ guides on the road, made fleeting visits to tracks with no attempt to consult with club officials; in other instances, there was no visit at all.  In general terms neither John Messara nor a representative of Messara met or conferred with clubs before proclaiming his idea to nationalise their private assets.  Despite his experience in business and racing administration John Messara has failed in this element of fundamental human rights.  The prospect of a ‘land grab’ against us was never put to us, nor the subject of a request for input, before a unilateral announcement by the Racing Minister and Deputy Prime Minister (Claudelands, 31 August 2018).”

The document appears to hinge upon the following statement: “The Messara Report which the Racing Minister appears hell-bent on following in all of its recommendations, is flawed as it affects us for procedural unfairness.

“For that reason these clubs see as unlawful the government’s proposed course of action.  Further, this after-the-fact activity by DIA in asking for input in October 2018, on the internet, seeking ultimately an endorsement of the Right Hon Winston Peters [sic] acceptance of John Messara’s justifications for a ‘land grab’ is not something to which these clubs will submit.”

So, forget the recommendations which, if followed, will revive an industry in its death throes, let’s argue process.

There is no one currently involved in this industry who does not sympathise with those clubs faced with the possibility of relocating their racing to another venue.  But, at this stage nothing is set in stone and while clubs may feel taking a combative stand is the only way to achieve their end goal more would be achieved by entering into constructive communication.

Creating petitions, roping in opposition politicians and firing allegations of illegal activity at government are not conducive to allowing our industry to progress.

Just to confirm the clubs concerned, along with the writer of their “submission,” may have a tenuous relationship with reality I really have to include the final paragraphs, parts of which enter into a realm of paranoia I haven’t seen since 2002.

“In the view of the clubs listed below, there is the possibility of a predetermined course of action, involving John Messara (and his people if any) and senior executives of NZTR or its board, in that the Messara Report implements in whole or part a pre-existing internal agenda in NZTR, whereby NZTR aimed to be able to close venues to release funds from within the thoroughbred industry to fund capital expenditure on new and existing sites proposed for the Waikato and other regions.  These issues within the industry power base grew in proportion from January 2018.”

“In our view this move by the DIA to provide a consultation function for their Minister is (potentially) an attempt to cure both the mistakes of John Messara in the way he conducted himself in New Zealand while surveying the subject matter of his report, and the impulsive nature of the Minister’s instant adoption of the Messara Report on or about 31 August, despite the Minister’s office having the final of the Messara Report for more than four weeks before he showcased it at the Claudelands function.”

“Accordingly, these listed clubs reject the relevant portions of the Messara Report and will not accept the legitimacy of any proposed legislative step by the government to furnish funds for the rationalisation of thoroughbred racing.”

At the very least this slight document will have provided some interesting reading for those at DIA charged with working through the submissions.  Just what they made of an attack of their process is anyone’s guess.

Sadly, these clubs in nailing their colours to the mast of the good ship Blue have identified themselves as not being supportive of the future of the New Zealand industry.

By placing self-interest first, and not even entering into discussions as to what life at another venue might look like, they have missed a gilt-edged opportunity to reap a future where they might be the next Feilding JC.  This blinkered approach, if they maintain it, will only hasten the demise of their respective clubs.

Perhaps, once they have had the opportunity to read and digest the bits of the report they obviously missed on first reading, they may reconsider and instead chose to be part of a thriving industry.  It’s not too late.

 

 

 

 

 

 

Time to put the NZRB out of its misery?

Call me cynical but I’m not buying this sympathy wave the NZ Racing Board is currently riding. With a late run reminiscent of Chautauqua the NZRB is attempting to position itself as a victim.  The outcome is more likely to be akin to last Friday’s Moonee Valley trial rather than the withering last-second winning burst a la any of the grey flash’s TJ Smith successes.

If you watched Weigh In last week, then you will have witnessed the staggering sight of the NZRB CEO John Allen stating that he did not speak to the Minister of Racing.  That was confirmation, if needed, that the NZRB in its current form is broken.

There were a couple of things which immediately sprang to mind when I heard that.  The first was, “well in that case do any of your well-rewarded Government and Industry relationship managers have any contact with the minister’s office”? And, the second was – “Winston can’t be that difficult to contact, Brian de Lore seems to have no problem getting him to provide answers to straight-forward questions.”

Long term readers will remember the Government and Industry relationship tribe which I referred to in a blog post last November (More climb aboard the NZRB gravy train).  From what I have heard over the past week though, they were as blind-sided as Allen when the Minister announced he was pulling the Racefields legislation.

It would seem from this that no one at the NZRB was paying attention when the Messara report was launched and the Racing Minister was answering questions. In addition to communication problems it would appear the CEO and chair are also challenged when it comes to listening and comprehension because, seated front and centre at the launch they managed to miss what everyone else watching heard and saw.

Interestingly, Brian de Lore wrote the following paragraph referencing this in his latest column in The Informant – you won’t have read it though as it was deleted:

That fact has been stated several times here in The Informant.  The Minister stated it himself at the launch of the Messara Report (and debated it with Graeme Rogerson) and he has always said we get only one chance at doing the legislation and everything had to be done at once.  It was no secret.

I went back and watched that segment of the Q&A again where, in response to Graeme Rogerson’s question about Section 16 the Minister had, among other things, this to say:

“I said that the law had been written in 2002 and the last one which is now before parliament which we have suspended bear the hallmarks of writing legislation for politicians and bureaucrats at their convenience and not with the interests of the industry in mind.”

When Rogerson pushed further asking specifically about Racefields legislation Winston Peters claimed the trainer was wanting to head down the motorway in a Lada when he was trying to create a Rolls Royce future for the industry.

“That legislation has got problems with it and we’ve only got a certain gap in the legislative schedule ahead to put the changes in we want,” he stated.

In response to the Minister’s query as to whether he saw the legislation as the “salvation of the industry” Rogerson said, no but it was a help.

The Racing Minister’s pithy reply, “So’s liniment!” left little doubt as to his opinion of the racefields legislation.

Apparently, this exchange went whizzing over the heads of those from NZRB and obviously was also missed by the wonderful leadership team which John Allen would happily have alongside him in any battle.

Their unwavering belief that Racefields was to be their saviour also probably meant they didn’t bother too much with reading the Messara report which also pointed out flaws in the legislation.

This pretty much sums it up:

We are not convinced that the maximum level of penalties prescribed in the Bill is sufficiently high enough to act as a proper deterrent for persons not complying with the legislation. Perhaps further consideration should be given to adding custodial penalties for persons found guilty of breaching the legislation. It is widely thought that the inclusion of custodial penalties in the NSW legislation has been a prime motivator for a high level of compliance. While it would be beneficial for the legislation to be enacted at the earliest opportunity to generate much needed revenue for the racing industry, it would be more appropriate to delay its passage until a final decision is made by the Government on the preferred structure of racing and betting administration in New Zealand. This would avoid the necessity of setting up monitoring and collection systems within the nominated Designated Authority only to have to repeat the exercise if the structure changes.

Based on what we have seen and heard from the NZRB over the past week or so it would seem they are living in an alternate universe.  In that world work goes on shovelling money into a FOB platform which has the whiff of a three-week dead trout about it; jobs of all descriptions are advertised despite the future of the organisation being shaky at best; and there is no connection between the senior leadership team and the Minister.

Shouldn’t we all be more than a little concerned about all of the above?  Even more so when it is being portrayed by the CEO as if they are the ones who are being hard done by.

We are lucky in this country to have relatively easy access to our politicians, we connect to them via social media, can drop them an email, write them a letter and even give them a phone call – which they may, or may not chose to answer!

Brian de Lore told me earlier this week that he had flicked a text to Racing Minister Winston Peters and received a phone call within three minutes.

He relays this in his piece in The Informant where the Minister could not have been clearer when it came to the Racefields legislation.

“I cannot keep on jamming things into the Parliamentary schedule and it made sense to pull that out of the schedule and incorporate whatever good parts there are into a new Bill as fast as I can,” the Minister told de Lore.

Given this and further comments from the Minister in the de Lore piece it was somewhat odd to see an NZRB puff piece also featuring in The Informant where John Allen is apparently “pushing a case for the Racing Board and the TAB in its current form to maintain a position at the top of industry administration and oversight.”

Anyone with a little more self-awareness might have already fallen on their sword.

Instead, we continue to hear the same old rhetoric coming out of Petone where it is everyone else’s fault that they are now presiding over a dead horse.  We are told they are passionate about the industry – as passionate as a six-figure salary can make you, I think – and that they want to see it thrive.   Excuse me if we aren’t swallowing it, after three years we’ve figured out the talk is just talk.

The implementation of recommendation number 4 can’t come soon enough.  Don’t be surprised though if, when the independents charged with conducting a performance and efficiency audit of the NZRB finally break into Fortress Petone, they find nothing but a burnt-out shell.

 

 

Why not focus on the benefits promised in the Messara report?

The difference in attitude between New Zealanders and Australians has never been more clearly on view than following the release of the Messara report.

Presented with a blueprint to success and potential doubling of stakesmoney (should the reforms be implemented in toto) New Zealanders immediately latched onto the perceived “negatives.”  In some areas of the media those negatives were figments of active imaginations which hadn’t been able to grasp the detail of the report.  I have laid two formal complaints with one media company which took a deliberately disingenuous approach to its reporting around the report.  Of course, it could have been driven by ignorance, the eventual responses should provide the answer to that and indicate whether I take the complaint to the NZ Media Council.

But back to the report. What is it with this tendency to focus on gloom, this dour, dismal, desolate outlook which is the antithesis of the bright and sunny outlook of our neighbours across the Tasman?  The fact the report was crafted by an Australian was something which grated with some media commentators who demonstrated their lack of knowledge by whinging about this aspect too. Would they have preferred we gave the task to another failed Kiwi administrator, after all, how do they think we got into this mess?

The report has now been widely available for two weeks and there are still many, some employed in the industry, who have not read and absorbed it. Yet they feel free to pontificate on the “negatives” and what needs to change.  The ignorance and arrogance of this stance is appalling.

Some with an agenda not entirely aligned with those who want to see the industry thrive (read the report and it is abundantly clear just who would fall into this category) continue to angst over track closures and the outsourcing of the TAB.

What they are not highlighting are the benefits this report promises.  In his covering letter, John Messara advises the Minister of Racing: “I calculate that the cumulative impact of the reforms recommended in this Review can enable a near doubling of prizemoney in the thoroughbred sector from $59.4 million in 2017-18 to $100 million.  The overall approach to prizemoney has to be aimed at supporting investment and participation in the sport through equitable funding for the lower tiers of racing, while ensuring that aspirations are fuelled by lifting the rewards of the Group and Listed program.”

The examples which follow provide a mouth-watering picture of what our future might look like with $10,000 minimums jumping to $20,000 in a simplified three-tier racing model which would see the top tier racing for $70,000.  What is not to like there?   Likewise, with Listed races doubling to $100,000 and increases at the top end seeing Group One races carrying stakes of $400,000.

To demonstrate just how these increases would benefit the industry there is a graphic which shows how this “Cycle of Revitalisation” would work.  Increased prizemoney leads to increased returns to owners, leads to incentives to invest in horses (buy & breed), leads to increased race fields, leads to increased wagering, leads to increased industry revenues, which takes us back to increased prizemoney and the cycle continues.

These increases in thoroughbred prizemoney are part of the 17th recommendation, which would also see payments extended back to tenth place in all races.

Another recommendation which should have met with a more enthusiastic reception is recommendation #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.”

Anyone still clinging to the belief that the NZRB has been doing a good job should read that again, very slowly (you can even move your lips if it helps with the comprehension).

As the report states, prior to distributing its profits to the codes, the NZRB is required to pay GST and betting levies to the government in accordance with legislation. The amount relating to the betting levy is approximately $13.2 million per annum.

The report argues that it would be in the government’s interests to repeal the betting levy provisions as a revitalised industry would “in turn lead to increased employment opportunities and an increase in the industry’s contribution to the New Zealand economy.”

The report continues: “If the government were of a mind to adopt this strategy it would send a clear signal of its support for the racing industry and its recognition of the importance of the industry to the New Zealand economy.”

“Further, if the levy is discontinued we would recommend that the resultant amount not form part of the Board’s overall profit to be distributed in accordance with Section 16 of the Act but that it should be accounted for separately and distributed directly to the racing codes.  In addition, as this action would represent revenue foregone by New Zealand taxpayers, we are of the view that it should be distributed to the codes in accordance with their respective contributions to the New Zealand economy.  Based on the recent Size and Scope Report prepared by IER in February 2018 the revenue forgone by government would be distributed to the codes in the following proportions: Thoroughbred racing 67.2%; Harness racing 27.10%; greyhound racing 5.7%.”

Following the Racing Minister’s instructions to John Messara, the Racing Act 2003 also came under the microscope and the report addresses, among other areas, the aforementioned Section 16.

Some history – Section 16 has given me nightmares from the moment our code was sold-out by those who purported to be acting in our best interests (those who should remain on the scrapheap of failed administrators).  Back in 2002 prior to the Bill going through its second reading it was originally labelled Section 15 and I wrote this piece:

Some 15 years since the adoption of the Racing Act 2003 we now have the opportunity to create a formula which would bring our industry more in line with those in the sporting codes.  Section 57 sees all sports betting, be it local or offshore, taken into account when determining the amounts payable to the respective sports bodies.

The report also details several precedents when it comes to distribution methods which give equal consideration to local and overseas racing.

Recommended under the heading Governance and Structure of Racing and Wagering Finances & Distribution to Codes is the following:

  1. Repeal the government betting levy and distribute proceeds to codes based on their respective contribution to the New Zealand economy.
  2. Amend Section 16 of Act to provide that NZRB (Wagering NZ) profits are distributed to codes on following basis:
  • Provided the NZRB (Wagering NZ) surplus is sufficient, each code to receive the same amount in any year that it received in the previous year (where the surplus is less than the previous year, the codes will receive a proportionate amount based on their previous year’s receipts)
  • Additional amounts are to be calculated as follows:
  • 25% on gross betting revenue on code domestic racing
  • 25% on gross betting revenue on code overseas racing
  • 50% on each code’s contribution to NZ economy
  1. Provide for the new scheme to be fixed for a period of 10 years unless changes are agreed unanimously between the codes and approved by Minister.
  2. Provide for an independent review of the scheme after 10 years.
  3. Continue to fund the racing integrity services from NZRB (Wagering NZ) gaming profits.
  4. All the NZRB (Wagering NZ) to operate on all sporting events (with or without agreement with National Sporting Organisations) and make payments to sports based on minimum payments prescribed under Section 57 of the Act.

There is no doubt the Messara report is a document which provides depth and detail.  It also offers us a roadmap out of the mire in which we find ourselves and the recommendations are dovetailed to ensure success.

Enter into discussions about the recommendations, but let’s make sure those discussions are around the “How” and let’s get this report across the line.

It also might be a good time for some former and current administrators to leave their egos at the door.  Yes, we all know you would’ve come up with a plan just as brilliant given a chance, but the fact is you weren’t, and you didn’t.  Suck it up and quit nit-picking!

In the words of the great Vince Lombardi: “Obstacles are what you see when you take your eyes off the goal.”

If we are to achieve our goal of a vibrant and thriving industry there should be, as Brian de Lore pointed out in The Informant, more than a little urgency around the next steps.

It might be an opportune time to engage with the Minister and express support of the report and its recommendations and stress the need to get the right people in the right positions to drive the Racing Industry Transition Agency (RITA).  That is going to be, as a friend of mine is wont to say, the key to the operation, at least when it comes to stage one.

As mentioned in Friday’s post the above was written prior to the Minister calling for public feedback on the Messara report, what we can expect in the next five weeks is anyone’s guess.  We are certainly living in interesting times!