RITA welcomes $72.5m emergency support package

New Zealand’s Racing Industry Transition Agency (RITA) has welcomed a NZD$72.5m support package from the country’s government.

The package is made up of a $50m grant – of which will be used so that RITA can honour its outstanding supplier payments – plus up to $20 million dollars on two new synthetic racetracks. Meanwhile, $2.5m will be set aside for the Department of Internal Affairs to distribute from community and sports associations who typically receive a portion of gambling revenue.

Racing Minister Winston Peters announced the emergency support package, saying the timing of the crisis while the industry is in a stage of transition meant the effects of the virus hit especially hard. Racing in New Zealand has been suspended since 25 March after initially continuing behind closed doors. 

“It is well documented the racing industry has experienced several years of financial under-performance,” Peters said. “It was partway through a reform programme, then COVID-19 arrived. As one expert put it, this has created the perfect storm.”

Peters said protecting the racing industry was of the utmost importance.

“The racing industry is seriously underestimated for its important contribution to our regions and our economy,” Peters said. “Past studies indicate it contributes $1.6 billion to the economy each year.

“There are 15,000 full time racing industry jobs and nearly 60,000 indirect jobs participating in some form – from vets, to equipment suppliers, and owners. There are 15,000 owners, 800 trainers, and 200 jockeys. Not only is New Zealand bloodstock world class – it’s a significant export earner. And all facing an unprecedented threat.”

RITA executive director Dean McKenzie, who took over the role after previous chief executive John Allen stepped down at the end of 2019, praised the work of Peters in protecting the industry.

“Covid-19 has presented the racing industry with one of its greatest challenges in its 150 year lifetime,” McKenzie said. “Without today’s announcement, the industry faced the serious prospect of confining all those years of New Zealand culture to the history books.

“With TAB customer numbers down 35%, monthly revenue down almost 50% from pre-Covid forecasts and continued uncertainty for a full resumption of racing and sport, the support provides a much needed lifeline to ensure the TAB can come out of this and continue to generate critical revenue for racing and sport in NZ.”

However, McKenzie added that the industry would have to continue to take cost-cutting measures in order to ensure long-term sustainability. Earlier this month, RITA announced it would launch a consultation over a number of proposed changes to the TAB, including 30% reduction in personnel

“[Today’s] announcement doesn’t change the fact that Covid-19 has highlighted some serious underlying structural issues within the industry,” McKenzie said. “In line with the direction of the Government’s reform programme, more tough decisions will be required going forward, and the industry must continue reforming now more than ever in order to be sustainable.

“RITA will be continuing to consult with staff on critical proposals aimed at ensuring the sustainability of the organisation and developing it into becoming a more commercially focused, leaner and more efficient business, so it can continue to fund racing and the wider NZ sporting community.”

On 1 May, RITA confirmed the transitional calendar for the remainder of the 2019-20 horse racing season. Harness racing in New Zealand is set to resume on 29 May, with thoroughbred racing to follow on 3 July. However, the revised calendar will feature racing at a reduced number of tracks to ensure racing is run in line with government measures designed to stop the spread of novel coronavirus (Covid-19).

On 1 July,  RITA will be replaced by TAB NZ when the second bill in a two part legislative process to overhaul the governance structures of New Zealand horse racing comes into effect. The first bill came into force on 1 July 2019 and saw RITA replace the New Zealand Racing Board.