Australian Racing Could Use A Royal Commission

Racing seems to have a gift of shooting itself in the foot.

In case you didn’t know, corporate bookmakers (which presumably means those in the as some southern bookmakers are also corporatised) are banned from sponsoring horse races in NSW. This is due to an exclusivity agreement struck between racing authorities and Tabcorp. Fairfax Media reports that the policy is holding up a proposed $1 million deal with an unspecified bookmaker.

It reminds you of an incident years back when the old Cessnock greyhound club was forced to remove a local bookmaker’s advertising from the gate to the pen. Apparently, the reason was that TAB Ltd did not like it and was about to conclude an agreement with the then-NSW GRA to put its logo on racing rugs. Power prevailed.

In the real world, the Australian Competition and Consumer Commission would come down like a ton of bricks on such restraints of trade. Only the support of the NSW government – via clauses in its licensing agreement with Tabcorp – allows these things to happen. A specific state government provision can absent itself from national trade practice laws – a measure which attracted criticism from Paul Keating when, as Prime Minister, he was pushing states to become more efficient.

(By the way, that same Tabcorp license also gives it sole rights to operate at the Border Park racetrack and auditorium in which GRNSW wants to give away to Queensland where Tatts is in charge. Interesting! But I digress).

It’s only a short step from these anti-trade issues to the violent opposition previously mounted by the three NSW racing codes to the operation of NT bookies and Betfair. At the time, most governments supported that policy, as did a Betting Exchange Task Force made up of top bureaucrats from each state. Despite all that, they proved impossible to stop in the end. Queensland was no different, with the QGRA chairman strongly opposed and the boss of (now Tatts) announcing at the time that if Betfair ever got a guernsey in that state he would start up a betting exchange himself. Never happened, of course. Later, a poorly-advised WA Racing Minister then tried to ban Betfair but quickly ran foul of the High Court. At about the same time, Tasmania’s Tastote, then government owned, told the media it strongly opposed any licensing of betting exchanges, only to wake up the next morning to find that the Premier had just done a deal with James Packer, half-owner of Betfair.

And who can forget Magic Millions owner Gerry Harvey (whose wealth depends on a profitable and competitive retail chain) making an impassioned plea on national TV to get rid of the interlopers and return to the bosom of the monopoly TABs with their lucrative commission levels?

It’s just a few short years since breeder Paul Wheeler, respected owner Paul England and former NCA president Mike Ahrens all quit the NSW greyhound board. Only Ahrens was able to report his distaste for what went on at meetings (in a Recorder article), the others being constrained by rules imposed by then-Racing Minister, Richard Face (who was subsequently disgraced for other reasons and resigned).

The harness code in SA has been in big trouble over conflicts of interest, to the stage where the government’s consultant even recommended that the greyhound board take over control of the other code. Queensland is beautiful one day, confused the next, after the previous board was scrapped by the new Minister, then claims of improper payouts emerged and the state now faces the prospect of a peculiar four-board structure with built-in conflict of interest issues. Last year’s Victorian greyhound board was shamed in Parliament following improper behaviour by staff. And so it goes on.

All this is history worth remembering.

Back to betting, those same betting shops now have a loving relationship with most racing authorities, one which is profitable for all parties.

The underlying reason for the attitude changes was that the customers were not impressed with the bans and blithely continued to do business with the newcomers, regardless of what state laws said or what racing authorities demanded. The people won, helped by modern technology.

But it does illustrate how dysfunctional racing bodies can become. Their innate conservatism and failure to address the wishes of a changing society has put racing behind the eight ball. Amongst other reasons, this is why racing’s share of the gambling dollar has been falling steadily for two decades.

The disease knows no boundaries. Consider, for example, recent statements by John Hartigan when he quit the chairmanship of broadcaster TVN: “Real growth won’t be realised until the board … allows an incoming chief executive and the executive team to be freed of burdens of being tied in knots by a dysfunctional board” (reported by Matt Nicholls, justracing.com.au, and others).

Hartigan went on, “the level of mistrust at a board level … has shackled the business and caused it to be unable to properly exploit the commercial opportunities on a day-to-day basis”.

The TVN board is staffed by heavies from the NSW and Victorian galloping fields, most of whom are prominent businessmen in their own right yet on their way to a meeting they appear to leave some of their skills at the gates of the racecourse. Hartigan himself is a former chief of News Ltd in and a favourite of boss Rupert Murdoch, so he is no fool.

And these are just the matters we hear about. Heaven knows what the public are not aware of.

The totality of it all suggests that the time is overdue to run an exhaustive review of racing’s structures and modus operandi. Can we find a better way of doing it? A Royal Commission would be ideal but that will not happen as nine different governments are involved and they will never agree to support it, let alone undertake the necessary reform.

The pressure has to come from within – which, incidentally, is what was recommended by the Productivity Commission in its summation of the different levels of racefield fees in different states.

A meeting of the three racing codes’ national bodies would be a good place to start but there is a proviso. Those bodies themselves first need to be empowered to do deals and make decisions in the interests of the whole industry. Currently, they are no more than paper tigers. In any event, as they are structured, they represent the same groups that have attracted all the above criticism, and therefore contravene governance principles established by the AIS and others.

Is this too big an ask? Maybe, but the plan might get support from state Treasurers. Some of the problems we have been talking about have been sorted out and, on each occasion, state taxes were enhanced. Despite the reluctance of governments and racing authorities to accept that change is necessary, there is now more money in the till. That may not be so obvious in some quarters because there are other influences on wagering which have not helped. But what would the score have been without the impetus from the newcomers? Arguably, NT bookmakers and Betfair have saved the industry’s bacon – but only for the moment.

The future still beckons.

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