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Introduction of the Racing Industry Bill

Mr Speaker, on behalf of my colleague Annette King, I move, That the Racing Bill be now read a first time. The Bill simplifies the governance of the New Zealand racing industry. It will effectively merge the Racing Industry Board and the TAB into a single statutory body, and this will provide racing with a more efficient administrative structure.

The Racing Bill repeals the Racing Act 1971 in its entirety and, in so doing, disestablishes the two existing boards. A new Board, the New Zealand Racing Board, is established in their place. The new Board will be responsible for both the administration of racing and the provision of race and sports betting services.

This Bill does not affect the industry’s ability to offer certain types of gaming products, its responsibilities in respect of problem gambling initiatives, or its requirement to pay certain taxes and duties. These are issues that the House will consider in the context of the Gaming Review and the review of taxation.

Although the New Zealand Racing Board will subsume the Totalisator Agency Board, the famous “TAB’ brand will not disappear from New Zealand’s main streets. The Bill retains and protects the brand for use by the new Board.

All of the TAB’s profits are returned to the racing clubs and groups to support the industry, and this Bill protects that guaranteed revenue stream.

Today, two statutory bodies have responsibility for the economic development of racing in New Zealand, and for the provision of betting services. They are the Racing Industry Board and the Totalisator Agency Board.

The Racing Industry Board’s purpose is to lead the economic development of racing, and to ensure its financial welfare. It has a range of functions that include distributing TAB profits to the racing clubs; setting the annual racing calendar; devising systems and rules for betting; overseeing the rules of racing; and funding initiatives to reduce problem gambling.

The TAB’s primary function is to provide race and sports betting on authorised events. Its profits are passed on to the Racing Industry Board for distribution to the racing clubs.

This dual governance arrangement has served the industry since the early 1970’s. In recent years, however, increased competition from other forms of entertainment has severely impacted upon racing. Today, racing is not best served by the 1970’s style of regulation.

In 1997 Ernst and Young undertook the first performance and efficiency audits of the Racing Industry Board and the TAB. The auditors found that the current industry structures were “not appropriate for the desired future performance of the industry”. The report recommended merging the two racing boards to ensure “better co-ordination of policy and delivery”.

Before the last General Election, the Labour manifesto gave a commitment to consult with the industry on the desirability of merging the two racing boards. Over the last eighteen months we have carried out extensive consultation with a range of industry participants.

The Government pledged to assist the racing industry if it could reach broad agreement on what it wanted for itself.

The Racing Industry Board, the TAB, New Zealand Thoroughbred Racing, Harness Racing New Zealand and the Greyhound Racing Association came together and developed a proposal for reform. This was presented to the Government late last year in the form of a draft racing bill.

Consultation has revealed overwhelming industry support for a merger of the TAB and RIB and this “merger’ forms the mainstay of the Racing Bill now before the House.

The policy rationale behind a single board is that one body should be responsible for both the commercial and broader policy issues facing racing in New Zealand.

This will ensure that strategic decisions take account of the potential impact on the racing industry and its stakeholders as well as the commercial implications.

The objectives of the new Board will be: „X to promote the sport of racing; „X to facilitate and promote racing betting and sports betting; and „X to maximise its profits for the long-term benefit of New Zealand racing.

The Bill provides that the Board’s statements of intent and annual reports will be tabled in Parliament.

The rules of racing, and the Board’s betting rules and procedural rules will be deemed regulations. The potential for disallowance by Parliament will ensure that the various rules are fair and reasonable, and are consistent with the rights conferred by other legislation.

The draft bill submitted by the Racing Industry Board proposed that the three racing conferences would appoint the new Board’s 7-person governing body.

However, in discussions with the wider industry there was considerable opposition to that proposal.

In recognition of these concerns, the Bill provides that the governing body of the Board will be appointed following a robust nominations and consultation process. The Board chairperson will be independent of the three codes.

Each code will be entitled to nominate one person for appointment to the Board. The chairpersons of each code, together with the Board’s independent chairperson and the responsible Minister, will form a nominations advisory panel. That panel will advise on the appointment of the three remaining positions.

In conclusion, the Racing Bill is a much needed and long over-due piece of legislation. The Racing Act 1971 is hopelessly out-of-date. The two-board governance structure is not efficient and has been criticised by independent auditors and the industry alike. Simplified legislation, and a more streamlined administrative structure will help racing compete with an increasing pool of leisure activities.

The racing industry has presented the Government with its preferred option for reform and the Racing Bill before the House represents that option. I hope that all of that the parliamentary parties can work together to ensure the prompt passage of this Bill for the sake of the industry.

I move that the Bill be referred to the Government Administration select committee. I commend this bill to the House.


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