Receive Our Newsletter Twitter Facebook
TICKETS

Hawkes Bay Racing Column 15 May 2020

Support package seen as lifeline for NZ racing

(By John Jenkins)

 

   New Zealand Thoroughbred Racing welcomed Tuesday’s announcement by Racing Minister Winston Peters of a $72.5 million emergency support package for the racing industry.

   The support package consists of $50 million relief grant for the Racing Industry Transition Agency (RITA); up to $20 million in funding to construct two new all-weather racetracks; and $2.5 million for the Department of Internal Affairs to fast track work on the online gambling revenue, and address loss of revenue impacts on community and sport groups.

   “The Minister described this as the first step in the restoration of racing, and emphasised that this a long-term process,” NZTR Chairman, Dr Alan Jackson said. 

   “It is no secret that COVID-19 and the absence of local racing has impacted severely on TAB revenue, and without the Minister’s intervention the industry’s future would have been limited.”

   Jackson said it was pleasing to hear the Minister reaffirm the economic contribution of the racing industry. 

   “We are a $1.6 billion industry which has 15,000 full-time employees spread throughout the community and those other businesses which support and supply our industry is often underestimated,” Jackson said.

   “The industry needs to be aware that the support package is a leg-up, not a handout and there are expectations from government that the industry will make the necessary changes required to live within its means.”

   “NZTR, along with the other codes will also be continuing to work with RITA to ensure that future reforms are in line with those expected by the Minister and others in government,” he said.

   Included in the support package is up to $20 million from the Provincial Growth Fund (PGF) for synthetic tracks at Awapuni and Riccarton. 

   “As the Minister outlined in his announcement the next step is for NZTR and RITA to consult with RACE in Manawatu and the Canterbury Jockey Club on the terms around those projects,” Jackson said.

   The president of the New Zealand Trainers’ Association, Tony Pike, believes the $72.5million emergency support package has breathed life back into an industry that was facing ruin.

   “It is obviously huge for the industry,” Pike said.

   “Without government support the TAB, or RITA were heading west.

   “By the sounds of it, they had not been paying suppliers for a while, with $26million to clear their current liabilities. This provides us with enough money to carry on until domestic racing gets back on track in addition to sports and gaming.

   “There is a big restructure going on at RITA and obviously they are going to streamline their business significantly. If we can get domestic racing back up and going, sports betting and gaming back on track, then hopefully there is going to be more coming out the other end that can be distributed to the three racing codes.”

   Racing broadcaster Trackside was one of the areas earmarked for cost-savings with broadcasting staff reportedly told they will have on-course presenters at only around 20 meetings a season, which will mean most Saturday race meetings will be hosted from studios.

  It is envisaged that at least two of the 10-strong presenting team will be made redundant, along with one northern commentator, and Trackside Radio will cease to exist on the AM frequency, instead being a digital simulcast available online.

   Tony Pike is acutely aware of the importance Trackside is as racing’s shop front.

   “From a personal point of view, yes it needs streamlining but we still need a promotion of domestic racing and some sort of coverage to drive betting turnover.

   “Hopefully they don’t cut that too much to the bone because that is your shop front delivering to people out there, both from an ownership and punting point of view.”

   With a synthetic track already well under way in Cambridge, a further two all-weather surfaces are planned for Awapuni and Riccarton Park and are expected to play a role in both centralising racing and reducing costs, in addition to providing reliable training and racing surfaces throughout the winter.

   “There is a world-wide acceptance for them now as a consistent betting product and obviously they will help us significantly through our wettest four or five months of the year,” Pike said.

   For those outside of racing questioning the government relief package for the industry, Pike was quick to point out what a substantial contributor it is to the New Zealand economy, as well as employing 15,000 full-time.

   “For people at the coalface, it is not considered a gambling industry,” he said. “It employs a huge amount of people and an enormous amount of care is taken looking after the horses and we are renowned on the world stage.

   “It is a stimulator for the local economy. Areas like Cambridge and Matamata, their local economies rely heavily on the thoroughbred industry.

   “It is a massive export earner with horses being sold overseas and income coming from overseas investors who support racehorse breeding and training in New Zealand.”

  

NZTR chairman Dr Alan Jackson wants to stress that the Government support package for the racing industry is a leg-up and not a handout.

New Zealand Trainers Association president Tony Pike does not want to see drastic cuts to the Trackside coverage of racing.

 

Widespread changes at TAB

   The Racing Industry Transition Agency (RITA) has announced it will be making widespread changes to the TAB in response to the impact of Covid-19.

   The proposal includes a reduction of approximately 30 per cent of roles across all areas of the organisation and is in addition to other cost saving measures at reducing total expenditure.

   Already a number of contractors have been laid off but remaining salaried staff have been informed there are more than 160 roles (and a further 70 contractors) to be cut across the board, with voluntary redundancies offered.

   RITA executive chairman, Dean McKenzie, said the scale of change presented to staff was required to ensure the business was sustainable for the future and best placed to meet the needs of New Zealand racing and sport.

   “The TAB has taken a major hit from Covid-19 with revenue last month 47 per cent below forecast and customer numbers down more than 35 per cent,” McKenzie said.

   “Despite far reaching efforts to reduce costs across the TAB, including salary reductions, staff taking leave and reducing all non-essential expenses, it simply was not enough to offset the blow Covid-19 has had, and will have, on our industry.

   “The implication of the pandemic extends beyond the immediate impact to the TAB, with racing and sport looking very unpredictable over the next year.

   “The reality is the TAB will need to be a leaner, more efficient business with fewer roles, and focussed on driving our core wagering and gaming business.

   “Our focus now is to discuss this proposal with our people and to listen to their feedback before a final decision is made in late May.”

   RITA was appointed by Racing Minister Winston Peters on July 1 last year to enable the urgent changes required to drive the racing industry toward a financially sustainable future.

   Covid-19 has provided the impetus for swift change, however, the wagering operator and broadcaster was already under pressure to create efficiencies prior to the coronavirus outbreak.

  RITA will use $26million of its $50million grant from the government relief package to pay off its outstanding debt and remain trading. But that still leaves them with $24million and McKenzie is not et sure how it will be spent.

   “I can’t give the industry an answer on that yet because this is all new to us, too,” McKenzie was quoted as saying following Tuesday’s Government announcement.

   “We are thrilled about the Government support but we haven’t had a chance to talk to the minister to get further guidance and then among ourselves as to exactly how that money will be used.”

   Peters said the $24million will be so RITA and the three racing codes can maintain baseline functionality and resume racing again.

   Owners, trainers, jockey and drivers are going to want to see money injected into stake money.

 

News Archive

© Copyright 2020 Hawkes Bay Racing