Racing: Codes promise to increase stakes after $5 million bonus payment

Stake increases may be across the board or more targeted at Saturday meetings and the industry's biggest days. Photo / Photosport

The two major racing codes won't dip into their shares of a $5 million bonus payment from TAB NZ until next season but promise increasing stakes will be its primary use.

TAB NZ announced the one-off $5m payment to be split among the three codes this week as they continue to have strong turnover results as well as reduced costs.

The positive financial news for the industry gets even brighter, with indications a combination of TAB NZ's improved performances, the betting levy repeal and extra money earned from overseas betting agencies in betting information charges could see the returns to the industry grow by as much as $20m to $25m for next season.

Last year, more than $139m was returned to the codes, that figure could be as high as $165m for next season.

The TAB NZ returns on betting will be much more profitable than last season but last year's return to the codes was boosted by money from the Government rescue package.

The heads of the thoroughbred and harness racing codes welcomed the payout forecasts and their share of the $5m immediate payment but say they will resist any temptation to immediately boost stakes.

"We will include our share of the $5m, which will be about $2.7m, in our budgets for next season," says NZTR chief executive Bernard Saundry.

Thoroughbred racing gets around 54 per cent of the payment, harness just over 28 per cent and greyhound racing close to 18 per cent and those shares will be used to divide the $5m.

But the exact percentages each will get from future TAB NZ distribution of profits is still being negotiated by the three codes, under the newly-formed Racing NZ.

Even if thoroughbred racing's share doesn't increase, they can expect, including the latest payment, somewhere between $11m and maybe as high as $14m more to play with next season.

Saundry says stakes are a priority for that money but it can't all go there.

"We need cash reserves for a start, to give us cash flow to pay stakes and expenses throughout the season," he says. "We also want to spend money on track infrastructure, the funding of the clubs so they can perform their roles and education and training.

"So we want to put money into all of those things but most importantly stakes.

"We realise that is crucial and the board are all discussing how that will look."

That discussion could include whether stake increases are across the board or more targeted at Saturday meetings and the industry's biggest days.

"Stakes will definitely be going up and we hope to have an announcement on that maybe inside a month," says Saundry.

Harness Racing New Zealand chief executive Gary Woodham says creating cash reserves of a targeted $4.8m to get through any future tough times is a major goal for HRNZ.

He says they are already halfway to that figure.

"The fact we are building those reserves is very encouraging and we will continue to do so but our priority with the increased returns in the new season has to be stakes," says Woodham.

"I want to see those increases be right across the board so the higher stakes go to everybody in the industry."

Woodham is confident the negotiations between the codes about future percentages of industry profits are progressing fairly and that harness racing's share of the punting profit pie will remain similar.