NSW Gets It Half Right
Written By Bruce Teague Saturday 3rd December 2011
Given comments earlier this week about the conflicted board of the NSW racing authority, it is only appropriate to look at the future.
A new set-up is due to arrive in February 2012 when the current board runs out of currency and the revised provisions of the Act come into force. Merit and skills in various business categories are the measuring sticks to be applied to incoming board members. Club affiliations are banned.
So far, so good. Broadly, this approximates the policies in place in Victoria and SA. Nominally, WA goes down that road, too, but the main power still rests with the state government via the tri-code RWWA, which holds the purse strings. Ditto in Tasmania. In Queensland, who knows how the mess will be sorted out?
Even so, three questions remain. The first is that the NSW appointment panel is made up of two former bureaucrats and a long time former club boss. Regardless of their other business experience, this hardly promises an adventurous approach to a bright new decade. Will Sir Humphrey prevail?
Additionally, one of those bureaucrats, Professor Percy Allen, currently GRNSW chairman, previously spoke out vigorously in an attempt to boycott Betfair, quoting badly researched reasons for that view. Those reasons were also advanced and applauded at a seminar sponsored by GHRRA, then the sister organisation to GRA (GRNSWâ€™ predecessor), by representatives of the Australian Racing Board and Tabcorp. Grave risks from the potential future actions of NT bookmakers also got much attention from stewards. How wrong can you get?
Also note that the 2009 review, which organised the structural changes, was run by a lawyer. At heart, it tended to fiddle with the wording of the Act rather than examine the potential or the need for major reform. Maybe the new board will delve deeper. We can only live in hope.
The second and more important problem with racing is that its basic management structure is obsolete, and will remain so under the 2012 system.
The crucial shortcoming is that significant decisions are made by the board â€“ ie management by committee – meeting every couple of weeks or so, while the so-called management is tasked with doing what it is told and deciding only what brand of paper clips to buy. No doubt some CEOs will protest that point but that is what is written into the Act. Any advance on that position is dependent on the board assigning extra responsibilities to the management team. If such is the position then it has never been publicised.
Any reform to bring racing more into line with normal commercial standards was ignored in the 2009 review.
The third failing of either the old or new systems is that no meaningful device exists to measure performance. Did they shape up or not? How do we tell? How does the Minister tell?
This is not a matter of diddling the books or other criminal offences â€“ for which controls are available â€“ but of assessing whether the board and management has done a good enough job under the circumstances. Indeed, they are charged only with waffly objectives like â€śdevelopment and progressâ€ť. Profits, return on assets, share prices or dividends are not available for non-profit organisations such as racing authorities and no useful substitutes have ever been set up.
As an aside, it is odd that while the Auditor General is prone to evaluate â€“ for example – how well the railways, electricity generators or the main roads people use their funds, no such check is made of racing authorities.
This is a critical shortcoming because while racing needs a great deal of regulatory oversight it also has to create a climate in which participants prosper, the public gain benefits and the industry at least keeps pace with competing recreational activities.
Clearly, in the latter case the evidence is that racing has not even come close â€“ hence the decline in wageringâ€™s share of the gambling market over the last two or three decades from over half to around 10% now. In the greyhound code, extra cash has come only from extra meetings squeezed into the TAB calendar, not from growth in patronage of existing meetings.
There are a number of areas where greyhound racing has become more efficient. They include control of drug use, medical treatments, feeds and supplements, veterinary skills, training methods, attention to retired greyhounds, the replacement of unreliable grass tracks with loam ones and the improved availability of form data (more work needed there, though).
At the same time, regular customers have dwindled, average field quality has declined, pool sizes are usually terrible (thereby discouraging potential new customers), mug gamblers with their Mystery bets are downgrading the betting product, research into better track design is non-existent, while all codes lack national consistency and national leaders of consequence. All of which has caused, or is coincident with (take your pick), the failure of the racing industry to keep up with the times.
The long drawn out mismanagement of the costly NT bookmakers and Betfair saga simply emphasises the point. Would a commercial organisation have acted that way?