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NZ Election Special: National Policy on Racing

Lindsay Tisch
www.national.org.nz

Executive Summary
National recognises that racing, breeding and ownership are facets of a unique agribusiness that contribute to our overall economy.

National supports a balance of all gaming activities that provides for employment, growth and economic development and is able to respond to technological and customer led development in the global market place.

National's Approach
Thoroughbred Racing and Standardbred Racing have been in relative decline for decades and there is a need for adjustment in the industry as consumers have greater choices over how to spend their time and leisure dollars. Greyhound Racing has enjoyed some growth. The most significant issue for the New Zealand Thoroughbred Industry is its competitiveness with offshore breeding nations.
New Zealand is not competitive in the arena of taxation/specified writedown. Investment in new stallions has decreased significantly with the trend to lease shuttle stallions. Currently broodmares used for breeding purposes are allowed to be fully depreciated from age two (or higher) to age 11. There is justification for writing-off these old mares in full once they reach 12 years as they do in Australia.
There is a wide range of gambling opportunities available in New Zealand and gambling expenditure has risen significantly over the past decade.
The sector is governed by numerous pieces of legislation that have different objectives, treat gambling providers in different ways and require different degrees of regulation. There needs to be one body that would be the Regulatory and Licensing Body for Casinos, Gaming Machine Operators, Lotteries and T.A.B.

Part 1 Status of Racing
The proliferation of newer, competitive gaming products, such as casinos, gaming machines and lotto, has reduced racing's share of the gaming dollar.
Racing in the last twenty years has over-invested in trying to hold on to on-course customers while the development of off-course gaming products, ownership and sponsorship products have suffered.
Racing has enjoyed a special status, with its own legislation and Minister, but this status has held the industry back, preserving the past rather than preparing the industry for the future.

National will:
*Allow the racing industry to act in a new competitive environment with the simplified Racing Act.
*Review the contribution each code contributes to the industry.
*Review the statutory monopoly of T.A.B. for Racing and Sports betting.
*Work with the industry to develop a policy, which specifically targets the innovation and reinvention of Racing through different gaming products on and off course and alternative betting systems and organisations.
*Appoint a Gaming Commissioner who will act as a Racing Ombudsman on racing matters.
*Allow non club ownership of venues.
*Allow the Board to have autonomy and the Racing codes freedom from statutory direction except that contained in the directive powers of the Board.

Part 2 - Taxation, Duties and
Write-offs

During the period 1995-2000 the level of New Zealand investment in new stallions decreased from $7.9m to $2.9m. In 2001 $10.25m was paid to overseas owners for shuttle stallions, which was fully tax deductible.
This is not good for the future as the lease of stallions are controlled outside New Zealand and their return, even if successful, is not guaranteed.
Aggregated depreciation for stallions was withdrawn in 1986 while Australia has embraced write-offs. The current writedown for stallions is 25%.
Approximately 300 broodmares start breeding on or after age 12 and they have a current minimum write-off period of three years. The write-off period should be reduced.
There is inequity with respect to taxation compared with other gaming competitors and the industry is struggling to survive in the wider competitive entertainment sector. The Racing Industry has 17% market share, but pays an estimated 33% of gaming tax, while the industry makes an overall loss.
The various taxation regimes of racing, lotteries, gaming machines and casinos each have their own method of calculating duty payable.
Racing Duty is payable at a rate of 20% of the betting profits.
Lotteries Duty is payable at the rate of 5.5% (value of all tickets in a lottery).
Gaming Machines Duty is payable at the rate of 20% of gaming machine profits.
Casino's Duty is payable at the rate of 4% of casino wins and casino's are subject to income tax at 33% of their income.

National will:
*Support investment in the bloodstock industry.
*Allow accelerated write-off of stallions over two years that encourages investment in breeding rather than leasing "shuttle" stallions.
*Allow the write-off of broodmares, in full, from age 12 years.
*Review the inequity in the taxation/duties over gaming activities.

Part 3 Gaming
There is a wide range of gambling opportunities available in New Zealand and gambling expenditure has risen significantly over the past decade. Between 85 and 90% of the adult population participates at least once a year in one or more forms of gambling.
The sector is governed by three pieces of legislation that have different objectives, treat gambling providers in different ways and require different degrees of regulation.
There needs to be one body that will control all aspects of gaming.
The Gaming and Lotteries Act 1977 did not envisage the introduction into New Zealand of gaming machines and was then unable to adequately provide for their regulation after introduction.
New legislation needs to have flexibility to deal with new technologies. Any new technologies must enhance the ability of gaming operators to put into effect responsible gaming programs.
Remote Interactive Gambling is available in our communities and should be regulated, as it cannot effectively be banned.
National believes it is important that the Gaming trusts continue to distribute funds in the community where they are raised.

National will:
*Establish a Gaming Commission which would be the Regulatory and Licensing Body for Casinos, Gaming Machine Operators, Lotteries and T.A.B. It would be a statutory independent Crown Entity with the powers of a Commission of Enquiry.
*Ensure the Department of Internal Affairs is responsible for gaming policy, supervision and enforcement.
*Establish a proper regulatory framework for Internet Gaming as the most appropriate way for providing jurisdiction with the opportunity to control the way by which Internet Gambling can be conducted.
*Allow the Lotteries Commission to undertake remote interactive gambling

Part 4 Problem Gambling
Many reports have been commissioned on problem gambling and it should be treated alongside alcohol and drug dependency as a health issue. Gaming operators pay "Problem Gambling Levies", part of which needs to be used for education, harm-minimisation programmes and research and development into problem gambling.

National will:
*Support problem gambling education, harm minimisation programmes and research and development into problem gambling.


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