The New Zealand Racing Board remains on target to achieve its highest-ever annual wagering turnover result and return $135 million to the New Zealand racing industry.
A strong half-year net profit of $72.6 million has been posted despite subdued domestic economic conditions, with total wagering turnover on track to pass the $1.6 billion mark for the first time.
In addition to a $130 million profit target on wagering, the racing industry is also forecast to receive an additional $5 million from the NZ Racing Board’s Class 4 gaming operations, meaning that the projected $135 million net distribution to racing will be the highest ever recorded without a reduction in reserves.
Total wagering turnover for the six months to January 31 was $832 million – $31 million, or 3.9%, more than for the same period in 2010/11.
NZ Racing Board Chairman Michael Stiassny said the result was particularly pleasing given challenging economic conditions and the continuing effects of the Canterbury earthquakes.
“There is no doubt that the environment continues to be extremely testing, so this is an exceptional result for the racing industry. Although the squeeze on discretionary spending continues and the earthquakes have impacted the supply of domestic racing product, the initiatives taken by the NZ Racing Board to drive revenue are proving very effective.”
Highlights in the first half included record-breaking wagering on the Rugby World Cup and an uplift in betting activity driven by service, product and technology enhancements within the TAB’s national retail network.
Punters spent $30.2 million with the TAB during the RWC tournament and more than 13,000 new customers opened TAB accounts as a result of RWC promotional and marketing activity.
“Allied to this extremely successful customer acquisition campaign, strategic initiatives including the upgrade of the TAB website, the delivery of self-serve terminals and enhanced retail display screens in the PubTAB network and the expansion of Fixed Odds Betting options have delivered excellent results for the business.”
Fluctuating supply levels of domestic thoroughbred and harness racing remained an issue, said Mr Stiassny, but the NZ Racing Board’s successful internationalisation strategy had continued to bolster revenue.
There have been significant recent developments in domestic thoroughbred racing. The NZ Racing Board endorsed NZ Thoroughbred Racing’s calendar change initiative to shift some domestic meetings to Mondays and Tuesdays, as well as backing NZTR’s recommendation to approve the return of racing to Avondale for a limited number of midweek meetings.
Mr Stiassny said the NZ Racing Board’s focus was firmly on developing opportunities to maximise revenue generation. In recognition of the customer shift toward Fixed Odds Betting products, new initiatives such as Final Field Place betting have been introduced to help offset declining Tote turnover. Growth in sports betting has also accelerated and the TAB is investing in innovations in this area, including plans for the launch of online betting on live-streamed sports events from around the world in the second half of the year.
On top of its contribution of a share of wagering turnover and profit to affiliated national sports bodies, the TAB has also ramped up direct relationships with key sporting organisations, most notably as a sponsor of the Wellington Phoenix football club and the NZ Warriors rugby league team.
Mr Stiassny said the NZ Racing Board remained on target in 2011/12 to deliver the forecast $135 million for distribution to NZTR, Harness Racing NZ and Greyhound Racing NZ – subject to the three Racing Codes delivering the expected number of races and starters. That would be $7 million more than the $128 million made available for distribution in 2010/11.
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