Board head hits out at latest report
Fixed odds platform among issues
New Zealand Racing Board head John Allen has hit out at claims international financial agency Deloitte have made about future TAB profitability. A summary of the document known in horse racing circles as “The Deloitte Report” was circulated to thoroughbred clubs and industry organisations earlier this month.
The report, dated May 2017, was commissioned by NZ Thoroughbred Racing (NZTR) to investigate the NZ Racing Board’s blueprint for the future. Until the release of the summary none of the report’s findings had seen daylight.
The report’s summary showed that Deloitte were critical of the NZRB’s inability to secure or enhance its future.
It was also critical of the anticipated rate of return for the NZRB, which runs the TAB, from its soon to be unveiled fixed odds platform.
The platform, which is set to be rolled out on August 1, is a collaborative project with overseas companies Paddypower Betfair and OpenBet and is estimated to cost $59 million to $72m.
The margins the platform would return to the NZRB have been tested by financial firm KPMG, but Deloitte were critical of the strength of that testing in its report summary.
NZRB chief executive John Allen is at odds with that criticism and is critical of Deloitte for not doing enough research into the fixed odds platform.
“Deloitte didn’t talk to us, this was a desktop exercise that they undertook without actually engaging with us and in our view they have significantly understated the value we are going to create from this. Because they have made assumption about the way in which our calculations were reached which are simply not true.” Allen is more than comfortable that NZRB made the right choice in partnering with Paddypower OpenBet and that the partnership will increase his organisation’s profitability.
“We are confident that the fixed odds platform will create the value that we are expecting from it. We went through a very extensive exercise, by bet type, to assess the margin impacts that we expect to be delivered from this particular initiative.
Partnering with Paddypower Betfair and Openbet was one of a range of options the NZRB had when choosing how to expand its fixed odds business. It is understood some betting agencies offered the NZRB much cheaper options.
Contracting out part of its core business meant the NZRB had to be thorough in choosing a partner.
Allen was not critical that the Deloitte report was commissioned, he applauded any move to help boost NZRB income.
“We all want the same thing which is to substantially increase the amount of funding for the industry.”
The NZRB has offered hope that live racing coverage will return to free to air television.
The organisation is not ruling out John Allen any option to secure its broadcasting future, chief executive John Allen said.
The NZRB is assessing how it broadcasts racing to the public as its contract with Sky television is due to expire next year.
The NZRB should have a smorgasbord of broadcasting options to choose from, especially if they are to look at how racing is broadcast overseas. Racing Victoria’s Racing.com broadcasting arm stretches its racing coverage across television, online streaming and website content as well as social media.
Moving to a concept like that is something the NZRB is considering.
“The environment is very very different than it was when the former management team were looking at the contract they concluded with Sky,” Allen said.
“There are obviously a lot more digital options, there are obviously free to air options available and we are looking at all of that and talking to Sky and talking to other participants to try and make sure that the solution that we find going forward sets the industry up for real success.” — Otago Daily Times