Racing: Downturn leaves $13m hole in revenue

The three racing codes of thoroughbred, harness and greyhound are set to take a $13 million hit in the amount of money they get back from TAB betting next season.

The New Zealand Racing Board reported yesterday that earnings from wagering on horse and dog racing had been hit hard by the impact of the global economic downturn which started last year.

Earnings for the first six months of the season, which runs from August 1 2008 to July 31 2009, were down 10.9 per cent, or $8.2 million to $67 million, compared with the same period last season.

NZRB chairman Michael Stiassny said while turnover had held up well compared with some other racing jurisdictions, margins had been squeezed as regular punters changed their betting patterns.

"There has been more take up of fixed odds betting and more races imported from overseas, both of which have lower yields than our traditional tote activities," he said.

Stiassny said the NZRB would smooth the impact of the recession this season by using money from its reserves to maintain distributions to the three codes at the levels previously forecast.

"However, there will be an impact next season, when we estimate distributions will be some $13 million below the current season's levels, assuming no further deterioration in the economy."

He said when the forecast for the current season was made early last year NZRB assumed there would be continued strong growth, which had not eventuated as the worldwide downturn took hold.

NZRB was working with representatives from the three codes to identify savings and efficiencies from closer co-operation at the operating level.

A working group led by the NZRB would be set up to develop a sustainable model for the racing industry in the future.

NZRB management had also been asked to find cost savings of $10 million a year.

Stiassny said emphasis was being put on growing revenue through the introduction of the new First4 and Quaddie betting and a continued focus on international co-mingling ventures.

NZRB was also continuing to confront threats to its business from offshore betting organisations as well as the rapidly changing wagering market in Australia, he said.

Revenue was lost when New Zealanders bet with offshore betting organisations.

It was negotiating a licensing agreement with overseas betting agency operators which would see them pay a fee to use New Zealand's race field and race form.

But he said these measures needed to be accompanied by gambling law reform which the board would propose to the Racing Minister and the Government shortly.

Stakes reductions would be a last resort, he said.

- NZPA