Engaging with the Government as a stakeholder

The imperative of educating government to the significance of the racing industry and collaboration in the fight against illegal betting were the key points made at the ninth Plenary Session on Friday at the 38th Asian Racing Conference (ARC) in Cape Town, South Africa, which examined Engaging with the Government as a stakeholder.

The session, moderated by Mr. David Eades, examined government role as a key stakeholder in racing’s development and operations - with the primary focus on racing’s need to engage and work with government for the betterment of the sport.

The Hon. Martin Pakula, Minister for Racing, Jobs, Innovation and Trade, Tourism, Sport and Major Events in Victoria, Australia, was joined by Mr. Andrew Harding, Secretary-General of the Asian Racing Federation and Executive Director, Racing, of the Hong Kong Jockey Club, Mr. Bernard Saundry, Chief Executive of New Zealand Thoroughbred Racing and Mr. Moses Tembe, Chairman of Phumelela Gaming and Leisure.

Mr. Harding said: “A key theme of the conference has been tackling illegal betting which crucially depends on engagement with government and a key dimension is the way the regulated wagering operator is treated - in particular in terms of taxation and take-out rates.

“In a number of Asian Racing Federation (ARF) jurisdictions, taxation is cripplingly high and they are the same countries which have the largest illegal betting markets. Beyond that, we have been examining this week how racing can unlock potential and in so many cases that depends on government approvals on a range of things, including whether off-course wagering and on-line wagering is allowed plus approval to enter into separate pools and simulcast arrangements.

“In particular, the holy grail of international commingling depends on approval to link pools and agreements from governments not to double tax. These are critical issues.”
Mr. Pakula acknowledged that addressing these issues was a critical part of the role of government. “There are a huge number of challenges in the racing industry which tends to find and create challenges. Integrity, welfare and illegal betting have been talked about this week and government has a role in setting the framework for wagering licences, race fields’ legislation and taxation. These are important parts of the discussion between racing and government.”

Racing’s future very much depends on collaboration with government was the clear message from the session.

Mr. Pakula said with conviction: “I don’t want to be part of the last generation of racing tragics. I want to see the support of younger fans and punters and if racing doesn’t get on top of key issues including welfare there is no prospect of a next generation of members, fans, punters and participants.

“I’m someone who’s been going to the races for 40 years, had a share in a horse and worked at a racetrack, I’m atypical. It’s uncommon for cabinets to be occupied by racing tragics and, with that in mind, racing needs to be very aware of what motivates governments both positively and negatively.

“Governments, for example, do not want to be seen to support any industry embroiled in scandal. On the other hand, governments will respond when aware of positive things including jobs creation, contribution to tourism, civic pride and economic stimulus.”

While noting governments’ key role in areas such as legislation around wagering and integrity structures, Mr. Pakula said the management responsibility lay chiefly with principal racing authorities.

Mr. Saundry spoke of significant government engagement over the past two years as the New Zealand racing industry enters the second phase of a major reform process and also of the need for racing to push its case.

“Racing needs to understand the politics. You can have a minister in charge who loves racing, but racing has to make sure that future governments and the racing industry can be aligned as much as possible. The industry has to manage itself and I’ve learned ministers don’t like surprises so it’s important to keep governments well informed.

“Racing hasn’t done well enough in selling the jobs’ story. The New Zealand industry directly and indirectly employs 50,000 people. It is important that racing does a better job of telling its story.”

Mr. Tembe said government support was critical for South African racing at a time when the sports’ market share of wagering had declined dramatically: “Self-financing through the tote was the case for a long time before casinos, lotteries and sports betting. Our market share has gone to less than 4 per cent, which creates huge challenges to sustain the industry.

“The industry is battling financially. This year and going forward, we have to engage with government more transparently and honestly.”

Mr. Tempe said he believed the outlook was positive despite the complication of Phumelela having to go through 10 processes - one nationally and nine provincially - when dealing with government.

“We had a meeting before this season with the various stakeholders in the industry and it came out clearly, we can definitely improve relationships among the stakeholders. The meeting demonstrated we can work together and improve a strong partnership with government to come up with a sustainable financial model.

“It must be stated there is a need to improve the relationship between government and the racing fraternity. For historical reasons, government still feels horse racing is elitist when in fact it must begin to see horse racing as an industry which must be supported.”

Mr. Pakula added: “Racing needs to look outward rather inward. It needs to consider what does the community think? There is a growing cohort of people who think racing doesn’t have a social licence and some participants wittingly or unwittingly are assisting those people in those endeavours.”

For more information on the 38th ARC, visit http://www.arcsa2020.com