If Minister for Racing Winston Peters is correct, legislation that gives him total control over distribution of the profits on over $600 million a year from sports betting will be “through, gone, done and dusted” by the end of the week.
That shouldn’t happen.
Concerns raised by many of the national bodies that govern sporting codes, delivering sporting opportunities for millions of Kiwis, that the Racing Reform Bill places a vital revenue stream in jeopardy, are legitimate – and will have only been heightened by comments Peters made to Newsroom late last week.
Those comments amounted to Peters saying that he knows best, that he can be trusted to ensure that everyone gets a fair deal, and that it is only right that the horse racing industry get the fairest deal of all.
For those not across the issue, National Sports Organisations (NSOs) currently receive a dividend on money wagered at the TAB on their sporting code. For many codes, it’s a vital revenue stream without which they’d be hard-pressed to operate.
The $1.179 million Tennis New Zealand received in 2018, for instance, represented 40 percent of the organisation’s total revenue. The likes of Basketball New Zealand are also heavily dependent on a funding stream for which the method of calculation has long been set in stone.
These organisations perform functions that range from providing the infrastructure for the delivery of grassroots sport, through to the fielding of national representative teams in international competition.
Legislation sponsored by Peters that is designed to revitalise the racing industry will scrap the current method of calculation, instead placing responsibility for funding distribution at the sole discretion of the Minister for Racing.
“Sports are shitting themselves,” is how a colleague summed up the situation.
And well they might be.
On this issue, the battle lines are clearly drawn between sports bodies and the racing industry – and the views of the two sides could hardly be more diametrically opposed.
Many sports administrators have long held a belief that the current system, which sees sports betting contribute around 27 percent of the TAB’s revenue while sports bodies receive just 6 percent of total disbursements (with the balance going to racing), is inequitable.
Racing industry proponents, however, argue that sports bodies are fortunate to receive any gambling proceeds at all, as it is the New Zealand Racing Board, via the TAB, that delivers the infrastructure which allows (or indeed encourages) sports wagering to take place at all.
This argument posits that sports bodies should receive back precisely what they put into the endeavour, which is nothing.
Of course, that argument rather overlooks the fact the Racing Board, through the TAB, enjoys a statutory monopoly on gambling that by definition bars sports bodies from participating in the industry.
Racing was handed proprietary rights over sports betting when it became legal in 1996. The requirement to only pass on a small percentage of the profit to NSOs means racing has done very well out of that situation.
Peters’ characterising as “ingratitude” fears outlined by NSOs in submissions to Parliament that their share of the pie might shrink further, or even disappear at the swipe of his pen rather than increasing, is more than a little on the nose.
If Peters is correct in his estimation that any opposition will be quickly subdued, that won’t be a great victory for the democratic process.
But, sadly, even if the issue is debated at length, our politicians will still be having the wrong discussion.
The question on the table shouldn’t be who gets how much? But rather, is it really desirable to have the administration and delivery of sport dependent on gambling revenue in the first place?
The answer to that is almost certainly ‘no’.
In many ways, New Zealand’s administration of gambling, with the state holding most of the cards and channelling profits back into worthy causes, is a great model.
Unfortunately, it is not immune to the law of unintended consequences.
The core funding of sport with gambling proceeds has created an uneasy cycle of dependence, with sports bodies tied to gambling via an umbilical cord that, if severed, would fatally bleed many of the cash to effectively function.
That is not a healthy situation.
Instead of our politicians haggling over the division of spoils from ill-conceived wagers, our nation would be better served by them having a genuine conversation about how we value sport and recreation, and how best to fund it.
We would never core fund transport or healthcare or education through gambling – so why are we happy to do so with sport and recreation, an area many would argue is equally as fundamental to our wellbeing?
Peters has argued saving the racing industry requires urgent action. There is little reason to doubt that. But if resuscitating racing requires the stampeding of other sports, it would seem prudent to ask if this really is the right course of action?
As Peters said, there is no sin like ingratitude. But it is not the fault of sports administrators that his proposed legislation has them wondering if they’ll be left thanking him for nothing.