Entain get a monopoly

[Turny]

Mardi, you have self answered in your last paragraph, Government is out as far as any future liability is concerned.

If it fails in 10 years time then I suggest it is over. Government will not prop the industry up thats a certainty.

Again the ownership, and financial liability quite separate from distribution responsibility.

I am delighted they are separate, now watch with interest ... taxpayers have no future liability

 

[curious]

47 minutes ago, mardigras said:

If the NZ Racing industry were the generator of the funds to the government body, you could suggest they should be entitled to receive them. As without the industry, the money wouldn't flow into the government body. But that is not the case. NZ Racing would be highly unlikely to be generating 10% of the funding it receives. A subsidy. A government subsidy, therefore tax-payer subsidy.

Yes. And so far as I can see the taxpayer contribution potentially increases now. However the funds are generated, the taxpayer is not only gifting those funds to the racing industry but doing so free of tax and also now free of any betting duty. So, there is no return to government and with the proposed beefed up legislative changes to increase the monopoly protection, the taxpayer gift probably becomes greater doesn't it?

[mardigras]

17 minutes ago, curious said:

Yes. And so far as I can see the taxpayer contribution potentially increases now. However the funds are generated, the taxpayer is not only gifting those funds to the racing industry but doing so free of tax and also now free of any betting duty. So, there is no return to government and with the proposed beefed up legislative changes to increase the monopoly protection, the taxpayer gift probably becomes greater doesn't it?

I'd agree. Definitely the tax-payer funded largesse is increasing.

A model where they divested themselves out of control, and allowed other entities to operate (even if it was a monopoly), where the activities were subject to the same taxes/levies as other similar entities, and the racing industry did agreements with those operators directly, it would become a much more palatable situation. 

[mardigras]

26 minutes ago, Turny said:

Mardi, you have self answered in your last paragraph, Government is out as far as any future liability is concerned.

If it fails in 10 years time then I suggest it is over. Government will not prop the industry up thats a certainty.

Again the ownership, and financial liability quite separate from distribution responsibility.

I am delighted they are separate, now watch with interest ... taxpayers have no future liability

 

If it fails in 10 years - it may be over - or the government may take further action - as they have done for the last numerous years.

That is exactly the same position as we have been in. The government could shut it down or do something to keep it going. They've constantly chosen the latter. Nothing in this agreement removes them from potential liability if they are wanting to keep it going in the future and the new model doesn't maintain pace with costs/expectations.

There is no difference in the model, except the subsidy is growing.

You keep going on about ownership. Ownership has not changed. The distribution model has not really changed either - it has simply had some guarantees around levels.

This model has no similarity with the Australian model. This model is no different to me owning a bakery and engaging another company to run my bakery and guarantee my profits. I still own the bakery.

 

[Turny]

Mardi, they sold the bakery ... simple as that ... no future liabilty .... and I am delighted

 

[mardigras]

6 minutes ago, Turny said:

Mardi, they sold the bakery ... simple as that ... no future liabilty .... and I am delighted

 

Except they haven't. Guaranteed.

Do yourself a big favour and go and read the Racing Industry Act 2020.

Edited May 26, 2023 by mardigras

[Turny]

We agree to disagree Mardi, Government are out 100% is my view

Lets watch it unfold, as an aside I too feel the new owners will struggle given the lack of public support but am sure their online casino will boom

[mardigras]

1 minute ago, Turny said:

We agree to disagree Mardi, Government are out 100% is my view

Lets watch it unfold, as an aside I too feel the new owners will struggle given the lack of public support but am sure their online casino will boom

I wish you were right since the future of the racing industry after the initial guarantee period would be subject to the performance of the NZ racing industry in delivering sufficient revenue to keep it going.

However, there has been no mention of dissolving the Racing Industry Act - and therefore, the government is still 100% in control - and likely to bail the industry out again should things turn sour.

[Hesi]

You would have to think that Entain have done their due diligence thoroughly, and see enough opportunity in NZ, to not only provide an upfront cash payment, but also provide a 5 year funding guarantee.  Who knows where they see those opportunities, whether it be in racing or other areas

[mardigras]

1 minute ago, Hesi said:

You would have to think that Entain have done their due diligence thoroughly, and see enough opportunity in NZ, to not only provide an upfront cash payment, but also provide a 5 year funding guarantee.  Who knows where they see those opportunities, whether it be in racing or other areas

I'd expect they see the opportunity is around the money they can make in NZ from non-NZ racing. 

[Turny]

Entains future is outside of racing, racing is simply the vehicle and a confidential deal has probably been signed in behind as thr Govt wanted out.

This morning Racing Minister said racing would have folded within 3 years, but we all knew that.

Lets see. Pity TAB Corp didnt buy, but think we can work out why

[Freda]

2 hours ago, mardigras said:

There hasn't been an ownership transfer. 

it is very simple.

Currently

The government body receives funds. Under the Act, the government body is required to distribute those funds - (primarily) to the racing industry.

Under the deal with Entain.

The government body has done a commercial deal with Entain. Entain will be providing the government body with funds. Under the Act, the government body is required to distribute those funds - to the racing industry.

It makes no difference how the funds come about, or who is managing the collection of those funds. All funds by way of whatever agreements that come to the government body, are government funds. The government is simply legislating that those funds go to the racing industry. It's government money. Therefore, being government money, it could be distributed elsewhere by simply changing the legislation.

The vast majority of those funds are not related to the NZ Racing industry. Which means the government is still subsidising the Racing Industry because they choose to not direct those non NZ Racing based funds elsewhere - rather, they continue to gift them to the racing industry.

If the NZ Racing industry were the generator of the funds to the government body, you could suggest they should be entitled to receive them. As without the industry, the money wouldn't flow into the government body. But that is not the case. NZ Racing would be highly unlikely to be generating 10% of the funding it receives. A subsidy. A government subsidy, therefore tax-payer subsidy.

Ok, I had the notion that the Govt had 'opted out' of responsibility.   Clearly I got that wrong.   Again, a lifeline we appear not to deserve.

[Turny]

They have opted out Pam, they hold no future liability ... that is very clearly the situation

[mardigras]

24 minutes ago, Turny said:

They have opted out Pam, they hold no future liability ... that is very clearly the situation

Well show us where that is stipulated. It can't be that hard. It is what I've been asking of you since the start. But still, nothing - except you keep on saying it.

The Racing Act would have to change for that to be the case.

Edited May 27, 2023 by mardigras

[curious]

The government hasn't opted out of anything nor sold anything. TABNZ has "sold" the operating rights for the TAB. It is a service contract between Entain and the TAB as the Minister said. Funds for distributions to sports and the codes will now come to the TAB from Entain under that agreement for however long it lasts. The TAB ownership (Government) and obligations to its objectives remain the same. The only change for the government is that there is at least hope of more longer term certainty about that with some guarantees which means the government is less likely to be called on for grants, subsidies or bailouts as they have in the past. If you don't believe that then ask Entain at the roadshow next week. I'm quite sure they are quite clear about what they own and don't own.

[Freda]

Well, thanks to the discussion above, I've cleared up my small misapprehension.

However, to park that for now, I have another question. 

For ages, there has been discussion [ not here ] about ownership of the TAB and much angst shown about the fact that 'the racing industry owns it '  etc, etc, with pointed barbs tossed at dogs and sports ' because they didn't pay for it' and so on.

I think some relationship between the BNZ Chairman and a leading racing official, back in 1952, existed when the TAB was first set up.   Loan with conditions, perhaps?

But my knowledge is very sketchy.

I recall, back at the time of the first Act, 2003, that Murray Acklin copped a lot of flack for something he did, or was supposed to have done.  I also recall, [much more clearly! ] that when submissions were given prior to the 2020 Act being passed,  Murray accompanied Jo Gordon, to present their point of view.  Portions of the presentations were shown on TV.  Murray commented ' I'd better do something now, after the last time.'...

Anyone have a better knowledge of what has ensued over the years? 

[curious]

It was set up by the government following a national referendum. The government funded the original board in a quid pro quo arrangement whereby the government got a 0.5% levy on turnover for 5 years to satisfy taxpayer resistance to that funding.  It was not in anyway funded by the code Conferences as some revisionists like Acklin wrongly claim.

 

Money to set the scheme up became a subject for argument, as many were strongly opposed to the use of Government funds. Finally, the Gaming Amendment Act of 1950 allowed the Board to receive 7½ per cent of all off-course-betting turnover accepted and placed on the totalisator. This is the same proportion as clubs receive on on-course turnover. Establishment and capital finance was provided by a levy of one-half per cent on totalisator-betting turnover for five years from 1 November 1950. The levy is now paid to racing and trotting clubs solely to maintain and replace public amenities and to improve racecourses.

https://teara.govt.nz/en/1966/racing-horse/page-8

Edited May 27, 2023 by curious

[Hesi]

TAB celebrates 50 years in the betting business

 

10 Nov, 2000 05:15 PM10 mins to read

SaveShare

By GRAHAM REID

Men in hats, that's what you saw. They niggled and argued. Then fists flew. Police were called, everyone was shoved outside on to Queen St, the doors were closed and order gradually restored.

Placing a bet at Auckland's first legal off-course gambling outlet was a tough and tetchy business in the early days of 1952.

When the newly created Totalisator Agency Board - the institution we know as the TAB - opened its first Auckland offices in the Civic Theatre, it suffered from queues and grumbles that its office hours weren't long enough. It quickly extended Friday betting until 8 pm, but on the first night tempers boiled as queues lengthened. That was when the fists flew.

Half a century ago Kiwis were mad keen to bet, and mad as hell when they couldn't do it quickly enough. There wasn't much else to do.

As British novelist Erik Linklater noted after a visit in 1951: "There are no theatres, pubs close before sundown and the restaurateur is, by law, strangled in his infancy.

"But ... in their passion for racing New Zealanders find an agreeable escape from the prevailing domesticity and their egalitarian regime [and] the anarchy of the race course offers a very pleasant release."

Linklater's contemporary encapsulation is quoted in a very readable history of the TAB by Wellington historian David Grant, Two Over Three on Goodtime Sugar.

Writing to acknowledge 50 years since the meeting of the first board, Grant traces the rise of a cautiously established Kiwi institution - which became a prototype for Australian state TABs - through to a business which today employs nearly 1200 full or part-time workers, turns over more than $1 billion a year and has, since 1996, accepted bets across a number of sports beyond its core business of horse racing.

For the David Tua-Lennox Lewis fight tomorrow the TAB will, for the first time, trial bets on boxing.

The TAB now deals with satellite feeds, fibre optics, and has had a public flagship with television's Trackside since 94, making racing the only sport with its own channel. Phone betting means punters can watch Trackside and bet without going near an agency. More than 21 million calls handling around 40 million transactions were made during Trackside's first year.

It's a long way from the TAB's modest origins in Fielding and Dannevirke in March 1951 - agency sites chosen because their populations were the minimum to be economically viable, and for their proximity to the capital.

Ann Amies, a 75-year-old Waiuku great-grandmother, remembers working with her father-in-law on the 1949 referendum to change the law to allow legal off-course betting. It began a lifelong association with the TAB which she continues today, assisting in her daughter's agency.

"When it started it was hard work because we wrote the tickets by hand and had to collate them. They were long days. All the dividends were worked out manually and last bets were taken an hour before a race closed and about two hours for the doubles. You weren't paid out on the same day, weren't allowed to have the radio on, weren't even allowed to give out results."

Surprisingly, this was considered progress. In 1935 illegal off-course betting exceeded £8 million and within three years, because of economic prosperity, that figure had doubled. There was money in gambling, and the politicians wanted a slice.

There was a perceived immorality to gambling, and church leaders, notably Protestants, spoke out against legalising it. But the omnipresence of bookies meant change was inevitable.

On March 9, 1949, a referendum was held to assess support for nationwide off-course betting. Only 56 per cent of the population voted but the result was overwhelming: almost 425,000 in favour, about 200,000 against.

The TAB was officially established on October 19, 1950, but the first agencies opened the following year - almost apologetically. They were relegated to sidestreets and alleyways, required to have unobtrusive entrances with little signage, and patrons were discouraged from loitering by the absence of chairs.

The betting age was 21 (today it's 18), and no other businesses were allowed on the premises. (In Waiuku, Ann Amies' daughter Joanne Mendoza runs a video store/TAB which complement each other, a not uncommon arrangement nowadays).

Quaintly, no information was given which could assist betting decisions: no names of jockeys or drivers, divisions, barrier positions, weights or handicaps. This was real gambling.

The list of persons not allowed on the premises was long and difficult to enforce: no prostitutes or persons who habitually consorted with thieves, no professional tipsters, house-breakers, forgers, those convicted of false pretences, assault or mischief, the idle and disorderly ...

"And they couldn't be anywhere near a church," recalls Amies. "I remember we used to have white paint on the windows so you couldn't see in. When they took that off and put up the TAB sign I had one punter offer to buy curtains so his wife couldn't see him."

Despite the constraints, the TAB could hardly fail with so few other entertainment options available. Following the successes at Feilding and Dannevirke, agencies opened in Invercargill, New Plymouth, Hamilton, Ashburton, Timaru and Rotorua. Within a year, from the end of 1951, the number of branches had grown from 10 to 167 and covered the country from, literally, Whangarei to Bluff.

Just as cinema audiences declined when television arrived, so too did track attendances with off-course betting. Small racing clubs were alarmed - the Hokianga Racing Club, formed in 1945, disbanded in late 58 after steady losses - but the TAB kept posting record profits. People liked it.

In 1954 the Auckland Star wrote that agencies "resemble nothing so much as the sedate premises of a branch bank. A visit there has become, for many housewives, as much a part of the weekend shopping as a call at the greengrocers."

"Oh, women would bet, too, of course," says Amies. "Some of my best customers were women. And the local Catholic priest."

Grant's history cites a 1954 observational survey commissioned by the TAB at three Wellington branches which showed that a third of punters aged between 31 and 51 were women. Most punters were "well-dressed" and many of the men wore suits and ties.

The TAB and racing were part of middle New Zealand life and becoming more so. Night trotting was introduced in late 58 and, despite Arnold Nordmeyer's "black budget" earlier that year, it became very successful.

Kiwis had more disposable dollars during the early 60s, and although the TAB faced competition from the Golden Kiwi lottery, it continued to grow. With track and weather information available, and updates on jockeys and scratchings, Kiwis took their gambling more seriously and did more of it.

But as the 60s progressed, television's growth, the relaxation of liquor laws, and a burgeoning restaurant culture meant increasing competition for the disposable dollar. TAB turnover started to fall markedly, the beginning of a cyclic pattern to be repeated in subsequent decades as other entertainment options such as videos, the rise of suburban malls and cinemas and changing hours for retail trade disrupted the once-sacrosanct Kiwi weekend.

In the 60s, for the first time but not the last, the TAB felt the threat from outside.

Racing also had internal troubles. It was a dodgy business.

"Owners, trainers and punters complained of unsatisfactory checks against doping and other malpractices," writes Grant, who dedicates a chapter to fraud and the TAB.

So the industry cleaned itself up, made its business more attractive.

Jackpots were introduced. Prompted by the Holyoake Government, which recognised that illegal bookies were making small fortunes out of it, betting was allowed on the Melbourne Cup and other overseas races.

The 70s were buoyant: profits in 1978-79 improved by more than 20 per cent on the previous year ($14.13 million) but by the early 80s the growth rate had slipped again as cinema bounced back, domestic and international travel became cheaper and liquor laws were further relaxed.

Responding again to the challenge, in 1981 the TAB engaged an advertising agency for the first time, offered more diverse betting options (trebles, quinellas and, from 1982, trifectas) and marketed itself through posters and on radio.

The theme was that racing was fun for all the family, and promotions such as mystery bets and Pick 6 (betting on six horses in six different races) pulled the punters.

But by the late 80s things slid again. There was a sluggish economy after the stockmarket crash, other entertainments and gambling options, people were working longer hours, and there had been a rise in awareness of problem gambling.

The TAB received a lifebelt in 1996 when it was allowed to introduce sports betting after a conscience vote in Parliament was passed 46 to 26. Initially the sports were rugby and league, motor sports, billiards and snooker, but very quickly softball, golf, tennis, soccer, athletics and others codes signed on.

It was immediately and impressively successful. Between August 1 and November that year turnover was more than $10 million, almost a quarter of that by phone.

Today the TAB will take bets on more than 25 sports.

"The most surprising thing about sports betting is how quickly it has become an important component of both our gambling and recreational cultures," says Grant, a non-gambler.

"Now sports commentators in their patter refer to the odds on particular teams, which suggests it was well overdue."

Today, around $60 million of the TAB's annual billion-dollar business comes from sports other than racing.

The TAB has been a barometer of our changing times. Early attitudes to gambling reflected our puritanical, repressive streak, and it is a measure of how much has changed that when the TAB has latterly wanted to close uneconomic agencies, locals protest and get up petitions.

An overview of the TAB's history, however, suggests it has been more reactive to social changes than anticipating them.

Admittedly it was often hamstrung by a conservative society and the reluctance of politicians to challenge it. To survive, the TAB has been forced to adapt and reinvent itself. It opened a website for internet punters three years ago and that has become its fastest-growing endeavour.

But this is a fraught area.

In mid-1998 the US senate voted to criminalise gambling on the internet overseas, and a year ago the Australians started looking at ways to control it.

This high-wired world also works to its own rules. The English site flutter.com, launched last year, allows punters to bet directly among themselves.

Although the site has a tabloid feel - bet whether Posh and Becks will announce before June 15, 2001, that they are expecting their second child - the time cannot be far off when punters will use the net to cut out betting agencies.

That's another challenge for the TAB - as is the plight of small and middle-sized racing clubs which are feeling the economic pinch.

Whatever happens next, the TAB and our attitudes to it remain an idiosyncratic microcosm of our country - from angry men in hats to the silently busy world of the microchip.

* Two Over Three on Goodtime Sugar: The New Zealand TAB turns 50, by David Grant. Victoria University Press, $49.95.

 

[Freda]

It is interesting to see how two 'colonial' nations, ethnically similar, have reacted so very differently wrt their racing management.

[Hesi]

The way racing in NZ is set up, seems unusual to me, in the way there is the disconnect between the funding and the administration

[Globederby19]

On 5/27/2023 at 10:44 AM, mardigras said:

I'd expect they see the opportunity is around the money they can make in NZ from non-NZ racing. 

In other words fleecing us by encouraging betting offshore through their own vehicle. Great.

[Freda]

Virtual racing, E-sports waiting to ensnare the next generation. 

[slam dunk]

https://www.theoptimist.site/

Worth remembering Brian de Lore staked his reputation on Messara and the outsourcing of the TAB. 

His article however leaves out so many other dodgy factors. The whole process shrouded in secrecy, the blatant efforts to influence the minister e.g. Michael Guerin's TAB articles, the list is quite long. The Auditor General's view will be interesting.

[Freda]

On 5/28/2023 at 8:23 AM, curious said:

It was set up by the government following a national referendum. The government funded the original board in a quid pro quo arrangement whereby the government got a 0.5% levy on turnover for 5 years to satisfy taxpayer resistance to that funding.  It was not in anyway funded by the code Conferences as some revisionists like Acklin wrongly claim.

 

Money to set the scheme up became a subject for argument, as many were strongly opposed to the use of Government funds. Finally, the Gaming Amendment Act of 1950 allowed the Board to receive 7½ per cent of all off-course-betting turnover accepted and placed on the totalisator. This is the same proportion as clubs receive on on-course turnover. Establishment and capital finance was provided by a levy of one-half per cent on totalisator-betting turnover for five years from 1 November 1950. The levy is now paid to racing and trotting clubs solely to maintain and replace public amenities and to improve racecourses.

https://teara.govt.nz/en/1966/racing-horse/page-8

Thanks for that.     So, as I now understand it,  funds were advanced by the Govt of the time, which was reimbursed by the 0.5 %  levy on tote betting.   Which came from the punter in the first instance.  So where, then, do so many get the idea that the galloping and harness codes paid for the set up? 

 

Edited May 29, 2023 by Freda

[mardigras]

34 minutes ago, Freda said:

Thanks for that.     So, as I now understand it,  funds were advanced by the Govt of the time, which was reimbursed by the 0.5 %  levy on tote betting.   Which came from the punter in the first instance.  So where, then, do so many get the idea that the galloping and harness codes paid for the set up? 

 

Probably in the same way so many in the industry believe that racing isn't massively subsidised.  They've never bothered to understand the mechanics and instead think that because whoever was around first relating to betting must have set it up. Which has given them that feeling of entitlement which is so far from reality.