Stratford RC

[Hesi]

Just looking at the article by Dr Murray Blue, this was notable(see below)

What a surprise, move the meeting away from the local community, and turnover drops substantially, not to mention the lack of dollars going back into the community from all the on course activity.

Surely this is all wrong, somewhere there must be 'real' data for each club, on what it takes from NZTR, what it returns to NZTR in fees etc, what it effectively returns to NZ racing(NZRB) through wagering profits, and nice to have and need to have Capex.  So people can evaluate for themselves, just who is dragging down the ship, and who is keeping it afloat, and therefore should be kept going.

The above does not include income derived by the club from it's own on course activity, which is effectively independent of NZTR?RB

The club was one of the top commercially performing race courses for the TAB in off-course and fixed odds turnovers, he said.

On course turnover at the December 29 meeting in New Plymouth fell from $124,000 to $101,000, while total turnover was down 28.4 per cent from $1.31m to $940,000.

 

 

[London Trader]

What a simpleton this fellow is. Talk about comparing apples with oranges.

[mardigras]

31 minutes ago, London Trader said:

What a simpleton this fellow is. Talk about comparing apples with oranges.

Care to expand. We have little to go on apart from the turnover (which should be yield). But the costs to run the meeting at either venue is the same? Or not? NZTR fronts up with the same, the stakes were no doubt the same. I'm not sure what the apples and oranges are?

[curious]

2 hours ago, mardigras said:

Care to expand. We have little to go on apart from the turnover (which should be yield). But the costs to run the meeting at either venue is the same? Or not? NZTR fronts up with the same, the stakes were no doubt the same. I'm not sure what the apples and oranges are?

I'll have a go. The apple was 1.3m. The orange was 940,000?

If that keeps up we should only need to reduce stakes by about 30% next season unless we can get punters or taxpayers to pay more?

Edited February 18, 2020 by curious

[Hesi]

This is one of the first so called rationalisation moves, removing Stratford's licence to race at Stratford so it must race at NP.

I'm relatively intelligent, but cannot for the life of me see how this will help improve racing in NZ.

Was there planned Capex at Stratford that now does not need to go ahead, so the money saved can go into improving racing elsewhere.

The situation will not be any better next year, the local community will not get in behind a meeting held at NP

[mardigras]

I assume the idea is that "if" they got funds from land assets, the costs required to fix 30 tracks is less than the costs required to fix 51 tracks. The issue for me is that they still won't do it because they will still look short term and think they should put the money to stakes. And the 30 tracks will not reach a level providing any extra confidence.

And it is all premised on getting all this money from land they don't have rights to.

It is reasonable to believe that there is a need to address track surfaces in NZ. But that could be done across 50 tracks quite easily. A simple rotation plan removing 5 tracks from running meetings each year. And the important part, allocating in the vicinity of $5-10m each year in full track remediation for those 5 tracks (and other lesser remediation annually) that are cycled out. 

[Hesi]

 

32 minutes ago, mardigras said:

I assume the idea is that "if" they got funds from land assets, the costs required to fix 30 tracks is less than the costs required to fix 51 tracks. The issue for me is that they still won't do it because they will still look short term and think they should put the money to stakes. And the 30 tracks will not reach a level providing any extra confidence.

And it is all premised on getting all this money from land they don't have rights to.

It is reasonable to believe that there is a need to address track surfaces in NZ. But that could be done across 50 tracks quite easily. A simple rotation plan removing 5 tracks from running meetings each year. And the important part, allocating in the vicinity of $5-10m each year in full track remediation for those 5 tracks (and other lesser remediation annually) that are cycled out. 

Yes, but as you mentioned in another thread, they have got too far behind to implement a plan like that.

Legislation still to be passed, clubs like Avondale, I'm sure, will test this right through to the Court of Appeal

 

[mardigras]

They're trying to play catchup - and using some bloody awful ideas to do it.

[curious]

There's really nothing on the table likely to address the core issue of increasing net revenue. The only remote possibility if they did it right is some sort of outsourcing/ licensing out. Even then that is only a way to manage existing revenue more efficiently, not really increase it. They can redeploy assets all they like but I don't see any of that resulting in more bottom line profit in any of the ways it has been proposed. Sure it's probably too late anyway. The horse has bolted.

[mardigras]

9 minutes ago, curious said:

There's really nothing on the table likely to address the core issue of increasing net revenue. The only remote possibility if they did it right is some sort of outsourcing/ licensing out. Even then that is only a way to manage existing revenue more efficiently, not really increase it. They can redeploy assets all they like but I don't see any of that resulting in more bottom line profit in any of the ways it has been proposed. Sure it's probably too late anyway. The horse has bolted.

I'd agree totally. It's all about short term revenue finding. And nothing about the future. Exactly what happened with levy reductions (Fairtax), the current levy reductions,  and the previous handout of millions to stakes. Meaningless in the long term. The issue is they should have stayed with what they knew about. Running a totalisator system. They had no idea of setting odds (the risks, the risk management, the ability of some customers). And getting out of what they had and focusing on off-shore and fixed odds has killed them.

It's quite a sad situation.

[Hesi]

4 minutes ago, mardigras said:

I'd agree totally. It's all about short term revenue finding. And nothing about the future. Exactly what happened with levy reductions (Fairtax), the current levy reductions,  and the previous handout of millions to stakes. Meaningless in the long term. The issue is they should have stayed with what they knew about. Running a totalisator system. They had no idea of setting odds (the risks, the risk management, the ability of some customers). And getting out of what they had and focusing on off-shore and fixed odds has killed them.

It's quite a sad situation.

So back to your original suggestion, keep the tote, because the infrastructure is here, it's low cost and zero risk, and licence out the fixed sports and racing to one of the known operators who knows the ropes.  The very act of doing that, buys you into an organisation that knows how to do it, probably at efficiency in costs, but it gets you lots of new business, with new products and new customers.........is that right, most of the punters around the world, would not bother with the NZ TAB?

The issue is, who and the nature of the agreement, such that it benefits the people who matter, the racing industry, not the tail wagging the dog, as has been the case with the NZRB and it's cost heavy structure and lumbering monopoly demeanour 

[mardigras]

9 minutes ago, Hesi said:

The issue is, who and the nature of the agreement, such that it benefits the people who matter, the racing industry, not the tail wagging the dog, as has been the case with the NZRB and it's cost heavy structure and lumbering monopoly demeanour 

I've written what may be best described as a bit of a diatribe on this topic previously.

The who - in regards fixed odds offerings is unimportant. The nature of the agreement is important. It should be that whoever wants to act as an odds provider, is only allowed to offer certain racing related odds on racing. (Of course there would be legislated rules around becoming an odds operator, but leaving that aside). The key aspect is that 

a) the fixed odds provider is unable to offer a tote derivate price.

and

b) the fixed odds provider pays the NZ industry a % of profit. And the profit should be on a race/market by race/market basis. i.e. if they profit on race 1 and lose on race 2, the industry collects their take on the profit from race 1. And the provider deals with the loss on race 2. The 2 races are not added together in determining the fee to the racing industry. 

If you do both of the above, you remove ALL risk from the activities of the odds provider. And you secure funding based on when they win, you clip the ticket. Additionally, you remove the ability of them to scalp tote commission rates by removing the ability to offer tote derivative prices. Therefore, they actually have to set odds, not set a price that is related to tote odds (knowing that the tote odds have a built in margin they can exploit).

The sporting bodies can then also negotiate their own take form their own events. NZ racing shouldn't be concerned with that anyway.

This allows the TAB to act independently of bookies. They can compete by way of how they set commission rates. Low rates will make it hard for bookies to compete. Low rates have the opportunity to increase pool sizes - making them increasingly attractive to punters compared to fixed odds that are generally at a higher overall rate of 'commission' than the tote is now anyway.

You reduce all of the costs associated with bookmaking. You have a low cost system that pretty much runs itself. And you let bookies squabble over how to profit fixed odds and clip the ticket when they do.

HOWEVER - this doesn't deal with the issue of how to make punters actually bet on NZ racing (and lose). That is what revenue is based on. But it does give you the opportunity to minimise the costs against your current revenue. And it also allows you to compete with offerings from off-shore that may make them attractive price wise (by reducing commission rates compared to offshore rates), even if nothing else changes.

[Hesi]

If you could clarify the following

All/most operators around the world offer odds on NZ races, along with NZ sports events, some then pay a fee to NZRB.

What would be the incentive to an operator to take over fixed in NZ, if they already do that

[curious]

One of the big problems here is that the codes don't get it either. They don't understand the differences between NSW and NZ. They cite NSW as an exemplar but don't want to pay for that, nor realise any of the vast differences such as the massive investment in tracks to provide a consistent attractive product. You will have heard this if you watched the select committee presentations. This is from an article by Brian de Lore who is also evidently sucked in to the TR code position and hasn't done his homework. https://www.theoptimist.site/

About the only thing Jackson has got nearly right is when he says "I trust you can appreciate the industry is at an absolute crisis point.” I say "nearly right" because I think it is past that point.

NZTR Chairman Alan Jackson during his address said, “As our major source of income comes from the wagering operator, there is no immediate prospect of any significant improvement in code payout, in our view, and perhaps there is even the risk of further decline

“Racing NSW had the same serious issues as we did, but they addressed the funding issue front-on and have delivered an 84 percent increase in prizemoney over the last decade, and they now run 60 races worth $1 million or more.

“The factors that drove this turnaround are the same factors highlighted in the Messara Report – a code-driven industry, enhanced sources of income, being racefields and Point of Consumption tax, and joint ventures with globally competitive wagering operators. This allowed a strong balance sheet to invest in the areas key to improvement.

“It was underpinned by clear performance accountabilities and positive government support and action without undue interference. Unfortunately, in our view, the majority of the Bill before us today is an organisational solution to the financial challenge. In its current form, NZTR believes it will not address the key financial challenges to allow the codes to deliver on their potential and may make us worse off than we are today.”

Jackson went on to talk about NZTRs key issues of concern which were IP, the TAB board appointment process, self-determination of the codes, the RIU issue

“He concluded by saying, “Finally and most importantly though, the Bill is excessive in government involvement and control and there is no clear pathway to addressing the financial issues

“I trust you can appreciate the industry is at an absolute crisis point.”

[curious]

4 hours ago, Hesi said:

What would be the incentive to an operator to take over fixed in NZ, if they already do that

It would surely be much higher volume with the NZTAB not directly competing in that FO market wouldn't it? And they would be allowed to advertise and essentially set up shop here which they can't do at the moment giving them a huge advantage over all other offshore operators taking bets on NZ events. They also presumably would not be subject to the PoC tax if that comes into being.

Edited February 19, 2020 by curious

[mardigras]

5 hours ago, curious said:

It would surely be much higher volume with the NZTAB not directly competing in that FO market wouldn't it? And they would be allowed to advertise and essentially set up shop here which they can't do at the moment giving them a huge advantage over all other offshore operators taking bets on NZ events. They also presumably would not be subject to the PoC tax if that comes into being.

And also, there would be nothing stopping more than one operator being based here - providing competition for the punter. 

With the industry itself (i.e. the TAB), not operating fixed odds, there are massive cost savings with those costs being passed onto commercial operators who are trying to make a buck. How absurd to have the industry/government run a high risk based business like that.

Alternatively, sell off the rights to run a totalisator, additionally charge an annual fee for that right. Grandfather some payments to the industry under some commercial agreement to try and keep the industry moving forward, and have all betting conducted by commercial operators.

Edited February 19, 2020 by mardigras

[mardigras]

5 hours ago, curious said:

One of the big problems here is that the codes don't get it either. They don't understand the differences between NSW and NZ. They cite NSW as an exemplar but don't want to pay for that, nor realise any of the vast differences such as the massive investment in tracks to provide a consistent attractive product. You will have heard this if you watched the select committee presentations. This is from an article by Brian de Lore who is also evidently sucked in to the TR code position and hasn't done his homework. https://www.theoptimist.site/

About the only thing Jackson has got nearly right is when he says "I trust you can appreciate the industry is at an absolute crisis point.” I say "nearly right" because I think it is past that point.

NZTR Chairman Alan Jackson during his address said, “As our major source of income comes from the wagering operator, there is no immediate prospect of any significant improvement in code payout, in our view, and perhaps there is even the risk of further decline

“Racing NSW had the same serious issues as we did, but they addressed the funding issue front-on and have delivered an 84 percent increase in prizemoney over the last decade, and they now run 60 races worth $1 million or more.

“The factors that drove this turnaround are the same factors highlighted in the Messara Report – a code-driven industry, enhanced sources of income, being racefields and Point of Consumption tax, and joint ventures with globally competitive wagering operators. This allowed a strong balance sheet to invest in the areas key to improvement.

“It was underpinned by clear performance accountabilities and positive government support and action without undue interference. Unfortunately, in our view, the majority of the Bill before us today is an organisational solution to the financial challenge. In its current form, NZTR believes it will not address the key financial challenges to allow the codes to deliver on their potential and may make us worse off than we are today.”

Jackson went on to talk about NZTRs key issues of concern which were IP, the TAB board appointment process, self-determination of the codes, the RIU issue

“He concluded by saying, “Finally and most importantly though, the Bill is excessive in government involvement and control and there is no clear pathway to addressing the financial issues

“I trust you can appreciate the industry is at an absolute crisis point.”

It's no surprise to see the situation that has unfolded over the last 20 years. The other issues facing NSW are similar to that facing NZ. Betting on NSW races was diminishing. People write that the racefield fees and PoC addressesed that. They didn't address anything in relation to increasing betting on NSW racing. They just took a bigger slice of the pie in taxes to make up the shortfall from their lower betting interest. And then the state government stepped up (just like here), and gave them further tax breaks. 

All about increasing their take from the same pie. NZ seem to think that is the answer.

Where they got things heading the right way was when they addressed the issues of their tracks and started programs of rebuilding/rehabilitating tracks (as you mention above). To get punters confidence back to increase betting on NSW races.

You don't get more punters betting on what you offer by charging them all more money for the privilege, yet the idiots in charge here think you do.