RITA addresses revenue concerns in new Racing Industry Bill

10 January 2020

New Zealand’s Racing Industry Transition Agency (RITA) has moved to address concerns over the new Racing Industry Bill, introduced as part of horse racing reforms in the country, dismissing fears that the legislation may not directly create any extra revenue for the market’s different racing codes.

New Zealand’s Minister for Racing, Winston Peters, announced the new Racing Industry Bill, the second element in a two part legislative process to overhaul domestic governance structures horse racing, last month.

The bill establishes TAB NZ - the body that will ultimately replace RITA - as the only betting provider for racing and sports in New Zealand. The bill also sets out how the Racing Integrity Board will take charge of all integrity issues and allows the thoroughbred, harness and greyhound racing industries to each be governed separately by their own bodies.

However, Dean McKenzie, who recently took of the role of executive director at RITA, has said while the agency welcomes the bill, it has noted concerns raised by other organisations in regards to new revenue that each code will directly receive as a result of the planned reforms.

McKenzie said the bill incorporates all of the revenue initiatives introduced in New Zealand last year, adding that these will continue to generate more revenue for the industry.

He gave the example of how funds already collected as a result of a cut in betting duty are being ring-fenced by RITA until government regulations are issued to determine the distribution of those funds between the codes and Sport NZ. Such is the projected impact of this this that RITA expects revenue from this to reach NZ$14m (£7.1m/€8.4m/US$9.3m) per year in 2021.

McKenzie also spoke about statutory offshore charges in the bill, saying these will be able to be set and collected following the implementation of regulations. These are subject to change, with a select committee set to meet with industry members to reach alternative voluntary commercial arrangements.

In addition, McKenzie looked at provisions intended to allow TAB NZ to offer a broader range of betting products, thus helping increase revenue for the sector. However, he said that this is not where TAB NZ needs to be, saying RITA will seek to increase its own flexibility in introducing new products.

Aside from this, McKenzie spoke about how the bill provides each code with a range of tools and functions to effectively govern their industries. However, he said the bill also introduces new regulatory and statutory backstops in the event the codes are at an impasse or otherwise and require government assistance.

McKenzie said RITA’s view is that the provisions are helpful, in that if a Minister is required to make a decision, this could help deal with unresolved issues that have held the industry back.

Elsewhere, McKenzie backed provisions to protect venues to continue to provide long-term benefits for racing, despite a general agreement that there are too many racing venues to support sustainability. The bill says venues will provide by continuing as a racetrack, or becoming a training facility, being developed for commercial benefit or selling it.

“In helping determine the optimum footprint of racing venues, the Bill provides a transparent, industry led evaluation process to identify any surplus racing venues based around a statutory prescribed process,” McKenzie said.

RITA also declared its support for plans to set up a new Racing Integrity Board, as well as a planned ‘skills-based’ approach in making appointments to the board of TAB NZ.

In terms of racing intellectual property (IP), McKenzie said RITA backs proposals for TAB NZ to hold exclusive rights to all such property associated with racing betting information, racing betting systems and any audio or visual content derived from a NZ race.

“RITA/TAB NZ does not see the enactment of this provision as radically changing the status quo for clubs or codes,” McKenzie said. “RITA is using racing IP today to drive profits RITA is also entering into arrangements with third parties which authorise the usage of that IP in exchange for the payment of fees, again for that benefit of the industry.”

McKenzie said RITA will met with clubs, facing industry organisations and other stakeholders over the coming weeks to listen to their views on the bill.