Garry’s Corner – 14 June, 2019

You know we need to get our feet on the ground. Like what’s wrong with NZ racing. How did we get here. What are our expectations. Despite all the hero worshiping what is the net gain other than what are reasonable commercial results. Why is this all so difficult.

Well, let’s start with what’s wrong. Money, or lack of.  Without the requirement of gaming licenses, we would like any other commercial entities stand or fall on our ability to maintain shareholder interest. Shareholders! What and who are they. Normally they are those that initiate, fund, measure the efforts of any management of the investors’ interest. The shareholders in this instance are a little nebulous, their returns are competed for on the race track. Still, if our returns and overheads were measured as in public companies would we accept the results, how would the shares be valued after the management performance was scrutinised.

No question the business would have been restructured some time ago. Is it reasonable to be critical of annual excuses for increased overheads culminating this year at 33% more than five years ago. The one-offs like the new betting platform a mere unconfirmed $40m or perhaps the need to raise over three years $36m to maintain stakes (dividends). That could in part answer the second question, clearly, the management of our racing Board don’t deliberately set about diminishing their shareholder base. I think the problem is they don’t acknowledge they are accountable. Their perception is they are running a gaming business from which after their needs they disburse the crumbs to those they should be accountable to. To be fair they have traveling roadshows to engender the same confidence they have, to the handful of biscuit and tea seekers they attract.

You heard all this before, so why again. Well, what do we expect, bugger all. For all the drama emanating as a result of the Messara Report the only result anyone could, amongst the bed wetting brigade complain about is the staggered abolition of the $13m betting duty over three years. When one considers $1.9 billion allocated for mental health in our wellbeing budget they should realise the $13m will avoid a number of additional racing adherents becoming part of the $1.9b client list. The Racefields Legislation and Point of Consumption Tax are of no cost to the Government so the $4 m a year culminating at the $13 m is despite all the hero worship our net cash result from our shining knight. If we do eventually finish up with a true board of change, if someone has the nouse to attack the $220m costs well and good but really the right Board and Management would never have allowed us to sink into the current abyss.

We need to assess the risks, firstly our immediate future, if the Bill proceeds as is, it is now largely determined by RITA, now I only know two of the appointed, but I do know if I was looking for a commercial record there is only one who could put up their hand. Does it matter, absolutely, what about any understanding of the nuances of our business, two only. How does this happen, you have a very busy Minister who has to share the load. Who from the Department of Internal Affairs, would you love running your business so we morph into a Government Department. Also, section sixteen of the current act is to be abolished, who then signs off under the new act the distribution, our Minister. Other immediate dangers, the sports bodies who suddenly believe our seventy years of investment and brand are not entitled to a return, go elsewhere is my, suggestion. Then we have the Justice Department who are concerned about our Betting Agency imposing penalties on those who wager on our product but don’t meet their commitments . Give us break.

I would go to Wellington to express my views but at the Governments proposed speed limit of 60 kilometers an hour I would not get home in time for the stud season.

Look of course I support in general the opportunity for change, but the puff is outweighing the stuff. Think about it, imagine a Minister such as Nicki Kaye poking her finger in our pie. We need to be cut loose.

Have we a future, well with the reduction in Carbon Emissions, lowering of speed limits I suggest you learn to ride. Cheers G