Stakes for all three racing codes are set to increase significantly. Photo / Trish Dunell
Racing stakes are set for a $12million annual boost with the promise of much more to come.
The New Zealand Racing Board shocked the chiefs of all three racing codes tonight by informing them $24million more dollars will be returned to the industry over the next two years to be used exclusively for stakes.
Starting August 1, thoroughbred racing will receive at extra $6.5million annually than it did for this season, harness racing $3.55million and the greyhound industry will have an extra $1.95million to pay out.
NZRB chief executive John Allen is confident the much-needed boost is only the start.
"Our return to the codes will go from $136.2million last year to $148.2million this year," Allen told the Herald.
"But I would like to think in the next three to five years that figure could go as high as $200million.
"The next two years are guaranteed at $12million extra per year though and not only is that number sustainable, it is a just a starting point."
Some of the extra money will come from the expected passing of race fields legislation, which will see corporate bookmakers overseas pay a percentage for betting on New Zealand racing product. That legislation is expected to become law before the general election.
Mr Allen says other key strategies being implemented by the NZRB will also have a huge role in increasing their bottom line and therefore their return to the industry.
He signals a new fixed odds betting platform, improved performance of the channels through which people can bet - particularly the internet - and an optimized racing calendar as ways New Zealand racing will profit.
"With the fixed odds platform improvements we have seen overseas agencies increase their turnovers through them and they will also give us the chance to win back large New Zealand-based customers we may have lost.
"And the optimization of the racing calendar, putting meetings and even specific races where they will best drive turnover is also crucial.
"We have done a lot of work and still have a lot more to do but I think a figure somewhere around $200million being returned to the industry in five years is a realistic goal."
Mr Allen says the first $24million is being targeted at stakes exclusively to raise confidence industry wide that racing is sustainable.
"This reflects recent steps taken by all three codes to lift stakes - there is clear alignment across the industry on where we need to be focused," says Mr Allen.
"This additional funding will enable all industry participants to have greater confidence in the future of the industry.
Tonight's dramatic boost comes on top of the $4.77million announced in January to support stakes, infrastructure and youth development.
Exactly how the three racing codes will choose to allocate their extra earnings to stakes will be a major talking point.
All three have already moved maiden stakes in anticipation of extra funds, with the thoroughbred industry now having a $10,000 minimum maiden stake.
That increase and the loss of a huge number of meetings this season due to weather and track problems is believed to have cost NZTR an extra $3.2million, but that can now absorb that and still have an extra $3.3million more to put exclusively into stakes from next season.
Harness Racing New Zealand has introduced a $1500 maiden bonus until the end of the season and they could now be setting their sights on $10,000 minimum races in a few years to keep them in line with the thoroughbred industry.
Some industry participants will want the biggest races left as they are and almost all the money poured into further increasing minimums, but a 2014-15 NZTR report on what it would theoretically do should it have an extra $9million for stakes suggested improving stakes over all class of meetings, from iconic down to the simplest industry days.
That was part of a five-year plan aimed at increasing stakes by $9million by 2020. They are now over two thirds of the way there by the start of next season.
With the code bosses not finding out their good news until tonight, the debates on how the money should be spent is only just beginning.
A LOT AT STAKE
-NZRB's annual return to the racing industry will increase from $136.2million to $148.2million for the next two seasons.
-The extra $12million must be allocated to stakes
-Thoroughbred racing will get an extra $6.5million
-Harness racing receives $3.55million
-Greyhound racing will boost stakes by $1.95million