NZ Racing Industry Four-percent Levy Scrapped

The industry is heading for a big restructure backed by the NZ Government

It has been a funny week for horse racing. In the UK authorities announced that favourable results for punters in February and March 2019, including a string of winning favourites at the fabled Cheltenham Festival, has led to a drop in bookmaker’s profits and resultantly there could be a massive shortfall – around NZD $33 million – in levies which would normally goes almost exclusively into prize-money. A continent, a hemisphere and 12 time zones away, New Zealand authorities have announced some altogether different news…

Messara Recommendations

In April Winston Peters, New Zealand’s deputy Prime Minister and Minister for Racing declared:  “The New Zealand racing industry is in a state of serious decline. The Coalition Government supports the overall intent of the Messara Report and is committed to reforms. We know we have the grass, the race animals, and the people to help the industry achieve its potential.” Australian stud owner and racing guru John Messara who prepared the ‘Messara Report’ recommended the closure of 20 of the country’s 48 courses and the construction of three all-weather tracks. Naturally, amongst the 17 recommendations, he identified prize-money as an area which was in urgent need of improvement and suggested the scrapping of the levy received by the government from betting profits.

Millions in Motion

Last Friday Peters’ made massive inroads in regards to the restructuring of the sports by agreeing to scrap the four-percent levy racing gives to the state, phasing it out over three years. In 2018 that levy amounted to NZD $13.9 million and those funds, probably more in the coming years, is set to be put back into the sport of horse racing and problem gambling. A 2017 study estimated the total burden of harms occurring to gamblers is greater than common health conditions, such as diabetes and arthritis, and approaches the level of anxiety and depressive disorders. Speaking at the New Zealand Bloodstock Karaka May Sale Peters’ said:  “The funds will be redistributed to the racing Codes and Sport New Zealand, with a proportion set aside to support the reduction of gambling harm. This change will provide an important source of revenue for industry investment decisions. “The racing industry plays a vital role in the New Zealand economy, having contributed $1.6 billion to the economy in 2016/17 whilst employing tens of thousands of New Zealanders, many of them young, and boosting New Zealand’s exports. “It is important that the industry is revitalised and placed on a sustainable footing for the future. Redirecting the betting levy funds is only one of a number of steps the government is undertaking.”