National Council May 2014 (Pt.1)

12:56 PM 13 May 2014 NZST
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Chris Bayliss, CEO of the Racing Board.

The Associations’ recent National Council bi-annual meeting was preceeded by a meeting with Chris Bayliss, CEO of the Racing Board.

Chris gave a short resume of his eighteen months in the job. His initial reaction had been amazement at a lack of data available, the myriad of varied stake-holders in the Racing and sporting Industries, and the amount of advice he had been given by all of those sectors. He had decided that the two main stakeholders that everything else focussed around were owners and punters.

He then proceeded to outline various aspects of the Industry that he had discovered, including New Zealand having the same number of tracks as the UK with 80million people, a reliance on gaming money, and that the Industry as a whole was grossly unprofitable. The TAB was the largest retailer in NZ and was a unique statutory body, and its’ size and influence were grossly under-estimated by punters. In answer to a question of ownership, Chris advised that no-one owned it, as the money lent by the Clubs to establish it, had been paid back. Income was around $180m with payment of stakes approximately $80m. This equated to a return of $62m to owners for costs of around $283m, meaning a return to owners of 22% (or a loss of 78%), the second lowest in the World after the UK. He also compared our situation with those of Singapore and Hong Kong where they had only one track each. He had spoken to the Prime Minister on a number of occasions, and reported that he was sympathetic towards the Industry, and would be producing an election manifesto to cover their partys’ plans for it.

Regarding technology, he advised that Trackside was the biggest broadcaster in NZ, with 7 of the existing 10 outside broadcast units in the Country. He advised that to change these to high definition technology would cost $10m each. The TAB IT systems were outdated 70’s technology which urgently needed replacement, and he described teletext at 29 year old ‘junk’ that no-one knew how to fix and parts were impossible to source.

Chris advised he had indentified numerous ways of improving the Industry and making money, however this all involved large investment and he would be having to make some big decisions in the near future to make up for the lack of action over the past ten years. TAB phone accounts had decreased in number from 200,000 to 100,000 in that time, and he felt it was important to spread to new markets to counter further decreases. Off-shore leakage was a serious problem, however he reported that the Government was sympathetic and were looking at ways of countering this, including a point of consumption tax, and a profit fee for overseas betting operators. It was hoped that the introduction of a new phone app. would help this situation. As from 1 August 2014, there would be no duplication of races on the two Trackside channels, and while Triple Trio had failed to reach expectations, overall turnover had risen 7% since its’ introduction, possibly due to the advertising campaign.

Other matters discussed with Chris included, the little recognised fact that the TAB does not pay Corporation Tax, racing accounts for 1% of GDP, a completely different dates calendar that he had commissioned that would increase turnover by an estimated $17m, and various aspects of Section 16 of the Racing Act including the fact that harness imported 14% of the Australian product yet received 29% of the turnover revenue. However he was conscious of the background of harness moving dates and time slots to accommodate Australian galloping races. Greyhounds would be the big benefactors of any changes to Section 16 due to the volume of races. Chris also spoke on centralisation, suggesting that proportioning TAB costs to the various codes could be looked at. He claimed that if 70% of the current meetings could be staged on 50% of the current venues, this would raise the profit margin by 50%.

In response to a question from Ken Barron re starting times and intervals for night meetings, Chris was sympathetic but stressed the need to fit around the Australian import. However, with the introduction of the two separate channels this should improve.

Part 2 next week.

By Peter T Cook (NZ Trainers & Drivers Association)

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