Despite the recession and almost half the country seeing the racing industry as negative, the New Zealand Racing Board's net profit nearly doubled over the past five years.The unaudited – before industry expenditure and distributions – net pro
Despite the recession and almost half the country seeing the racing industry as negative, the New Zealand Racing Board’s net profit nearly doubled over the past five years.
The unaudited – before industry expenditure and distributions – net profit for the 2009/10 racing season, which runs from August 1, 2009 to July 31, 2010, saw a 7.7% growth on last year ($9.2m increase) and a 49.7% increase on 2005/06 ($42.6m increase).
The growth does not come as a surprise for the board as it only exceeded last season’s budget by 0.53%.
Burning stats
According to Neilsen Research, which is commissioned by the Racing Board, only 16% of New Zealanders have a positive impression of racing and a whopping 47% view it negatively. Racing rated worse than any other sport surveyed on all measures relating to integrity.
And while the New Zealand Institute for Economic Research's data shows the country’s real GDP growth over the 12 months to June 30, 2010 was only 0.9%, the board’s turnover in 09/10 was 4.5% up the previous year reaching $1.582b ($69m increase).
Steel resistance
New Zealand Racing Board (NZRB) chairman Michael Stiassny said while the economic downturn is still affecting people’s spending decisions, the racing industry is doing well.
“In this environment we are very comfortable with the way we have performed over the last year, and right through the recession.”
In the 2009/10 season more than $120m was paid to the racing industry in cash and $4.7m contributed through funding industry initiatives such as integrity services, the Equine ITO, and on-course franchise events. Total funding to the racing industry has grown 42.3% over the past four racing seasons.
NZRB attributes the “strong” results to focusing on attracting a more modern customer group than its traditional base.
Spending on sports wagering has doubled in the past five years, and increased by 40% in 2009/10. A Football World Cup campaign, which saw the TAB open more than 34,000 new accounts and exceed profit targets, was a key driver of the 09/10 result, according to NZRB.
To relate to “people in their 20s and 30s” the board has launched a mobile version of the website, after it proved to be popular. Spending through tab.co.nz was up 40% ($97.3m) in 09/10.
Luring in plan
Mr Stiassny said the next challenge for the board is to shift the negative perception of racing to attract more people to the sport and therefore further increase profits.
“If people don’t believe in the integrity of racing, then they won’t invest their time and money in the sport. Clearly we need to improve integrity to change perceptions and grow participation,” Mr Stiassny said.
But some in the industry criticise the NZRB’s introduction of a gaming audit as part of the annual betting license conditions, meaning racing clubs must prove any gaming machines they operate, investments they have in businesses operating gaming machines and/or any gaming trust grants they receive are legitimate.
The board is also setting up a Racing Integrity Unit to take responsibility for the rules of racing and ensure their enforcement.
