A racegoer places a bet during New Zealand Trotting Cup Day at Addington Raceway on November 13, 2018 in Christchurch, New Zealand. (Photo by Kai Schwoerer/Getty Images)
A racegoer places a bet during New Zealand Trotting Cup Day at Addington Raceway on November 13, 2018 in Christchurch, New Zealand. (Photo by Kai Schwoerer/Getty Images)

SocietyJanuary 22, 2019

The government’s solution to the racing industry’s woes? A lot more gambling

A racegoer places a bet during New Zealand Trotting Cup Day at Addington Raceway on November 13, 2018 in Christchurch, New Zealand. (Photo by Kai Schwoerer/Getty Images)
A racegoer places a bet during New Zealand Trotting Cup Day at Addington Raceway on November 13, 2018 in Christchurch, New Zealand. (Photo by Kai Schwoerer/Getty Images)

There’s a big revitalisation of the racing industry on its way, with Racing Minister Winston Peters promising a raft of new measures to get people gambling more. But why, asks Joseph Plunket, should we blindly support an industry that preys on addicts?

The government’s shakeup of the racing industry is on course for this year, centred around structural reforms designed to double the amount New Zealanders spend on betting.

On average, New Zealanders each spend NZ$98 a year ‘wagering’ – a catch-all term that includes the TAB, Lotto, gaming machines and casinos. Across the Tasman, Australians are spending NZ$225.

The racing industry wants New Zealanders gambling like Australians, and spending more on horse and dog racing, as well as the myriad of other TAB wagering opportunities. For this troubled industry, the solution appears to lie in the exploitation of problem gamblers.

A majority of those who gamble might be able to do so safely, but the racing industry ultimately relies upon addiction in order to prosper. The characterisation of ‘just having a punt’ trivialises a serious issue which impacts families and communities across the country.

Why is our government seeking to reform and revitalise an industry which provides largely for an elite – those who own and breed racehorses – when it comes at the direct expense of the general public?

Early in 2018 Racing Minister Winston Peters commissioned Australian ‘racing guru’ John Messara to develop a plan to revitalise the New Zealand racing industry. In the weeks before Christmas the next steps in this process were announced and a Ministerial Advisory Committee appointed – a precursor to a new Racing Industry Transitional Authority.

A new-look racing industry, shaped on John Messara’s advice, would have significant implications for New Zealanders and the country’s gambling environment.

The Messara Report was released in August. Racing Minister Winston Peters has framed it as the saviour of thoroughbred horse racing, which he sees as on the brink of “irreparable damage”. Peters seems to view this industry as a bastion of New Zealand culture, which is currently in need of “nurturing” from the nation, justified by the fact that it adds $1.6 billion a year to GDP.

The woes of the racing industry come from one fact: people aren’t betting large enough amounts of money (or frequently enough) to support it. The TAB, which is operated by the New Zealand Racing Board (NZRB), serves as the major source of revenue for the organisation, followed by gaming machines. If the recommendations of the Messara Report are fulfilled, total prize money will be doubled to $100 million a year. The report advocates for the consolidation of racetracks, investment in selected tracks, incentives to invest in horses and better returns for owners. All this hinges on the single aim of increasing the profit of the TAB. That means more people wagering more frequently, and in higher amounts.

Australian racing guru John Messara (YouTube)

The 2018 NZRB Annual Report displays a masterclass in phrasing. One graphic reads “successful TAB customer acquisition campaigns resulted in 78,580 first time bettors”. This is positive for investors and those with vested interests, but the underlying message is simple – 78,580 new people have a chance of giving us their money.

In the 74 page report, there is one page devoted to ‘Responsible Gambling’. It outlines the training that staff who oversee physical TAB sales are supposed to complete, and explains the self-exclusion options available from within the TAB app for smartphones. Neither of these address the issue of gambling addiction at the core. Self-exclusion is not an option for those who are seriously addicted, and there is inconsistency in the training afforded to staff in the “over 700” TAB outlets around the country.

The TAB also has a betting restriction programme, which enables individuals to request a weekly limit be placed on their account. Thirty one people have been placed in this programme following their request. The NZRB does not disclose if any applicants are denied.

Walk into any suburban or rural pub in the country and it becomes clear that the industry needs to have a greater commitment to problem gambling. But there is no incentive for the NZRB to curb these individuals from within their own app, or even to ensure that staff who oversee these machines are properly trained. Developing a process to better address problem gambling would inhibit increased profits.

It is difficult to establish the extent to which gambling addiction is a problem in New Zealand. Those who are seriously addicted often do not seek or receive help. Statistics from both the Gambling Helpline and Ministry of Health show a decrease in the number of new clients, however in the financial year 2016/17 gamblers in New Zealand spent $125 million more than the previous year. The overall amount gambled between the TAB, Lotteries Commission, gaming machines and casinos was $2.334 billion. Of the four forms, the TAB was the only one to experience a downturn during this period.

The Messara Report highlights Australia as the poster child for a functioning wagering (and therefore racing) industry, citing the per capita wagering amount as clear evidence for this. New Zealanders spend NZ$133 less per capita than Australians each year. If the intention of these proposed reforms is to double the prize money available, then the amounts wagered need to double too.

The Messara Report goes even further. It also calls on the government to display its support for the industry by removing the current betting levy placed on the NZRB which is worth $13.2 million per year.

In early December, Winston Peters announced the establishment of the Racing Ministerial Advisory Committee, which will act as a precursor to the proposed Racing Industry Transitional Authority. His announcement reiterates the thrust of the Messara Report: reforms are needed in order to realise the “untapped potential” of the racing industry.

Among the appointees to the committee is Sir Peter Vela, who is no stranger to the Racing Minister. In 2008 it was revealed that the Vela brothers had donated $150,000 from six different accounts over four years to NZ First. All donations fell under the $10,000 declaration minimum. This sits in addition to the declared $100,000 donations from the same brothers to Labour and NZ First in the run up to the 2008 election. There are no up to date figures on any further donations from the Vela brothers to NZ First as the party is the only one in New Zealand that allows every single party donor to remain hidden from the public.

Winston Peters has had a long interest, relationship and commitment to the racing industry and individuals within it. Now, as deputy prime minister, racing minister, and coalition kingmaker, he is in a position to use taxpayer resources to shore up an exploitative and declining industry.

The intention of Winston Peters, John Messara and the government could not be more clear. In order to revitalise this industry, changes will be made to entice Kiwis into gambling – and some, inevitably, into the grasp of gambling addiction. As Messara himself says, “We need to keep people in the game.”

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