Racing: Board to pay out $6m to codes from $119m profit

The New Zealand Racing Board has posted a $119 million profit for the year to July 31 and says it will make a special $6 million payout to the thoroughbred, harness and greyhound codes in March.

The board, which runs the TAB, termed the result healthy as it dealt with the effects of the global financial crisis and increasing offshore competition from internet gambling operators.

Coming off a record high in 2007/08, the board's total turnover of $1.513 billion was down only 0.9 per cent, or $14.25 million. Operating expenses of $144.73 million were up just 2.95 per cent, or $4.16 million.

Distributions to the industry were up 7.2 per cent, with the three codes receiving $141.2 million.

The result reflected strong financial management through a difficult time, board chairman Michael Stiassny said.

"We dipped into our reserves to pay out $22 million more to the industry than we earned during the financial year. This was a prudent decision taken to help racing weather the recession, which meant that our cash reserves were reduced to $41 million at the end of the financial year."

The full-year result was particularly robust given the pressure on discretionary household spending in 2008, the 2.5 per cent fall in GDP and the increasingly competitive environment the Racing Board was facing, he said.

"On current estimates, around $50 million is being returned to overseas operators which otherwise would be available to support the New Zealand racing industry. Additionally these operators are able to offer betting opportunities relating to activities taking place within New Zealand on which legislation prevents us offering betting and therefore competing. Legislatively, we no longer operate on a level playing field."

The board will make a special $6 million payout to the codes in March.

"This unscheduled distribution is only possible due to the strong fiscal restraint being achieved by the Racing Board," Stiassny said. "The distribution is in addition to our budgeted distributions to the codes which we will continue to make during the remainder of the financial year.

"We are currently ahead of budget for the first five months of 2009/10, as a result of having worked to strip out more than $10 million in operating costs, at the same time driving revenues with initiatives such as TAB TV."

- NZPA