Can It Be Fixed?…….Yes…….But,…..

This is the last of three articles on the future of the code. The others were Racing’s Corporate Challenge (30 Dec) and The Triple Whammy (2 Jan).

Greyhound racing is struggling under six layers of management: the club, state authority staff, state management boards, a industry body, a collection including the , the racing department and other government interests, and the national Racing Ministers Council. And then there is a long list of local councils running shotgun over much of what happens. That’s a lot of people to get through to bring about any of the industry. But it must be done.

Reform is a welcome challenge for entrepreneurs, who relish the opportunity to try something new, to open up new frontiers, to create more interest, to increase efficiency. NT bookies are entrepreneurs. So, indeed, are dog trainers.

Bureaucracies tend to avoid reform. It makes more work, it upsets accepted norms, it challenges tradition, it sometimes even forces people to change jobs. Bureaucracies worry about processes, not results – necessary but not always productive.

Unfortunately, racing is controlled by bureaucrats. In Tasmania specifically so – by the Department of Energy, Infrastructure and Resources (check the Director’s job description – a depressing document shown on the DIER website). Elsewhere, including in NSW from early 2012, racing management is theoretically the responsibility of government-appointed boards, sometimes independent (NSW, , SA) and sometimes a mixture including code nominees (WA, Queensland), who therefore have conflicting obligations.

However, to confuse the issue, all of them are really dependent on a bureaucracy which is charged with making the wheels go round. Some do better than others, largely as a function of the personalities, but in the final analysis a state committee, meeting every couple of weeks or so, must approve every action. Not just major policy matters, but what would be everyday financial and operational decisions in a commercial organisation.

The myth, often spread by Racing Ministers, that governments are keen to stay at arms’ length from the industry, is belied by the frequency with which those same Ministers make speeches, order reviews, issue releases and front up at major events – to say nothing of announcing occasional handouts, or the attempted ban by a misguided WA minister. And when the colour of government changes, often board members do, too.

The dead hand of state Treasurers can be seen regularly grasping at any opportunity to pull in more cash from unfortunate punters, much as TABs nick the bits left after rounding off dividends. Sidetracking the promised $10 million compensation for the closed Gold Coast track has hardly been popular. Investing for greater future profits is not in their job description. In politics, only this year counts.

Classically, successive sales of formerly state-owned TABs to the highest bidder brought with them long term monopolies which the winners could then exploit. In practice, those TAB’s privileged positions allowed them to convince governments to favour their shareholders rather than consumers of racing. Short-sightedly, laws were changed to better protect TAB turnover and deter competition, including that from longstanding oncourse bookmakers. A normal company could not get away with that under Trade Practice laws, but governments gave themselves special exemptions. However, in the end the policy collapsed, as was inevitable

As rewards to raceclubs and TAB employees at above-market rates became the dominant influence, NT bookmakers spotted the gaps and jumped in, boots and all. Shock, horror was the instant reaction from the racing establishment, fearing their chardonnay lunches were at risk (as a QC investigating abuses in Sydney once commented), to say nothing of watering down their power to run racing as they liked, regardless of the wishes of their customers.

Some of that has gone by the board now as commercial and legal realities come to the fore. Yet, still, the heart of racing – the raceclub – remains a part time operation with amateur volunteers around the board table. Their major objective is survival, not profits. They are responsible only to a handful of members, not to their customers, who might be 1,000 km away. And, of course, there are no shareholders to satisfy. So long as they don’t rob the till, things continue as they always have. All of which is a recipe for mediocrity.

Nationally, state representatives get together under the banner but even there the objectives are a cause for worry.

GA’s charter is to help members by “maintaining financial viability” yet it has no control whatever over state finances. It wants to “improve standards of the greyhound racing industry” yet that is not happening on several fronts (see previous article, The Triple Whammy) It aims to “develop and implement industry strategies” for future success yet every move is dependent on each state taking action in its own right. Very often, they don’t. For example, a national set of racing rules is a prime GA task yet every state has its own set of rules which vary from the national standard.

Above all, GA’s self-imposed restriction to deal only with matters is a huge barrier to progress and profitability. Leaving business matters to individual states, or even clubs, virtually guarantees greyhounds will never cut the mustard in a competitive world. Can you imagine what would happen if the AFL let each state negotiate TV rights? Or if cricket played to different rules in each state?

Indeed, even those state authorities are often found wanting when it comes to making or spending a dollar. Work out, for example, how the industry benefits from state breeding incentives which take cash out of the hands of owners and trainers to subsidise the one sector of the code which operates profitably and in an open market – nationally and internationally.

The current system worked once – when betting was a sellers’ market and customers lived around the corner – but it’s been looking shaky since buyers started calling the tune.

These days, commerce is not even a national game but a worldwide one. Unless your influence spreads widely you will soon be history. For example, the ACT’s own TAB operation, the nation’s smallest, is likely soon to disappear, to be absorbed by a much larger organisation. The Tasmanian tote, the country’s second smallest, has just fallen to the tri-state (now quad-state) Tatts operation, following SA and NT state TABs into what was once just a Queensland operation. is constantly doing deals with overseas operators, thereby overcrowding SKY screens with four-legged poker machines, encouraging mug gamblers and diluting interest on local events. NT bookies, one after the other, are succumbing to offers they can’t refuse from European betting houses – sure proof that they had got their strategies right and that the moribund racing establishment had got it wrong.

In the interests of taxpayers and consumers at large it is incumbent on state governments to throw out the old and bring in the new. Commercialise or bust. Nationalise or remain inefficient. If racing authorities are to be responsible for “progress and development” then measures have to be put in place to check how they do that, and sanction them if they don’t. They must become accountable, especially to the people who fund the industry – the punters, even including the mugs, as well as the public at large.

For over two generations, racing authorities have concentrated on administering the industry, not managing it. Largely, that has meant servicing owners and trainers – while leaving customers to find their own way around. To build a flourishing future, those priorities must be reversed. That will never happen while unaccountable boards and bureaucracies are in control. The greyhound code has marvelous basic assets in pure bred animals (a rarity in the dog world), skilled participants and quality service suppliers. But to optimise their contribution we need entrepreneurs and entrepreneurial organisations to run things.

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