Day At The Track

New Minister warning - industry faces issues

06:01 PM 16 Jul 2011 NZST
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The racing industry has largely lost its mainstream appeal and faces chronic issues, its new minister has been warned. The Department of Internal Affairs, which provides policy advice on racing, said in its briefing to Craig Foss this week that thoroughbred racing in particular faces challenges. Foss has replaced the retiring John Carter as Racing Minister.

"With the exception of a few glamour and community race days, racing has lost its mainstream consumer appeal. It has struggled to compete against an increased range of gambling and entertainment options, and is suffering from a lack of investment and a long-term decline in its core betting income," the department said.

"Racing must reinvigorate its offering if it is to become more appealing to consumers."

The industry had received support from various avenues, including tax changes and access to gaming machine revenues, but in tough economic times was unlikely to secure significant new sources of revenue to offset further declines, the department said.

"New Zealand Thoroughbred Racing (NZTR) has recently acknowledged that racing's current position is not sustainable. It is consulting industry organisations on a range of proposals to improve the industry's prospects.

"Implementing change in racing will require strong leadership, as previous attempts have failed. You can expect to receive representations from NZTR on its plans for the future."

At the end of this month, the Government's $3 million a year co-sponsorship of major group races ends.

"Given the racing industry's current financial position, it is very unlikely that the recipient racing clubs will be able to keep the prize money at the higher level without the scheme," the department said.

"This will mean less prize money paid to the few racehorse and greyhound owners that win the previously subsidised races. This will impact particularly on the thoroughbred code, which received the lion's share of funding from the scheme."

The department told Foss there had been community disquiet about the level of gaming machine funds granted for racing stake money, rather than for community purposes.

The New Zealand Racing Board, which runs the TAB and funds the thoroughbred, harness and greyhound codes, is considering becoming a gaming machine operator in its own right, and applying the gambling profits generated in its TAB agencies to support racing.

"A reputable racing statutory body operating gaming machines on racing premises for racing purposes could potentially address the public concern surrounding pub and club gaming machine profits funding racing stakes," the department said.

The board is discussing its proposal with the department's gambling regulation staff.

The department also said it may be time to have a fresh look at the $1 million a year the Government injects into the Racing Safety Development Fund, which encourages racing clubs to update racecourse maintenance.

It said it could be appropriate for Foss to set priorities for the fund, "especially in light of a possible thoroughbred racing proposal to develop a network of core racing venues (about 15 of the 51 racecourses)."

New Zealand Press Association


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