Giant Australian gambling companies are poised to take over the TAB’s role in New Zealand if a report into the racing industry is adopted by the Government.
The report, commissioned by Racing Minister Winston Peters, and kept secret from racing industry leaders, is due to be released tonight at a public meeting in Hamilton.
Sources familiar with the contents of the report says it recommends that race betting in New Zealand be outsourced to an Australian company, effectively meaning the end of the TAB.
The TAB turns over more than a billion dollars in race bets and returns a total of about $150 million annually to the racing codes – gallops, harness racing and greyhounds.
The racing industry has been struggling for years with inadequate stake money and NZ First leader, Winston Peters is its local champion.
NZ First has received considerable backing from key figures in the racing industry and the Deputy Prime Minister has long promised to lift the industry out of the doldrums.
Peters brought in wealthy Australian stud owner and racing guru John Messara to review the long-term sustainability of racing industry in this country.
Sources have told Newsroom that the big gambling companies in Australia have proposed giving the industry an up-front cash payment and more money, said to be $100 million over 25 years, if they get the licence to control betting on NZ races.
It is odds on that one of the Australian suitors will be Tabcorp.
It is listed on the ASX and has a capitalisation of nearly $10 billion.
The TAB is owned by the New Zealand Racing Board and has operated since 1951.
NZRB’s John Allen described the TAB as an “exciting opportunity and an iconic brand,” when he took up the CEO role in 2015.
The TAB also owns Trackside TV which broadcasts race meetings and race shows.
Newsroom’s sources say the Australian deal would also involve them taking control of the broadcasting rights and the timetable of race meetings and races in New Zealand.
When approached by Newsroom for comment on what might happen to Trackside if the Australians took over, one prominent staffer said it was likely that “racing in New Zealand will end up getting covered like Tasmania or other Australian states. They won’t cross to our tracks five minutes before the race like happens now and the narrative of racing will be lost.
“It might be a short-term win in terms of the money but in the long-term it will hurt racing in this country.”
Other industry figures approached by Newsroom felt the proposal would reduce costs in the racing industry and boost stakes, but the outsourcing of betting and broadcasting to the Australians could cost up to 600 jobs.
“It sounds very short-sighted, if we had sold Air New Zealand to Qantas when the share price was at 16.5 cents we would be kicking ourselves. The share price is now over $3. It is the same for racing, we risk selling out at a low point that we will regret.”
It is understood that the report also recommends that the number of race tracks be rationalised, a touchy subject in provinces where race meetings and the facilities at race tracks draw the communities together.
It is thought the number of tracks could be reduced from 57 to around 25.
Racing industry sources point out that it is not uncommon for recommendations to be ignored or only a few taken up by Government but there are signs that Peters is not looking to cherry pick from Messara’s report.
At the New Zealand Thoroughbred Awards on Sunday night, the Minister for Racing ended his speech by telling the audience that he wanted them to embrace the report “lock, stock and two smoking barrels”.
Peters will speak and release the full report at a public meeting at the Claudelands Arena in Hamilton tonight. The New Zealand Racing Board will also live-stream the event.