Racing Industry Amendment Bill

Members, we now come to the Racing Industry Amendment Bill. We come first to Part 1. This is the debate on clauses 4 to 14—“Amendments to principal Act”—and Schedules 1 and 2. The question is that Part 1 stand part.

Kia orana, Madam Chair. It’s a pleasure to spend some time in the committee stage on the Racing Industry Amendment Bill. In the second reading last week, I made some contributions around the progress of the bill—the nature of the Governance and Administration Committee being very collegial around wanting to support this piece of legislation. I acknowledge the Minister in the chair, the Hon Winston Peters, as he has said on a few occasions, and as members will know, this is an important piece of legislation to support a vital industry for New Zealand’s economy.

I do have a number of questions. The first does relate—since we are on Part 1—to clause 5. This relates to the new requirement for not just the Minister but the chief executive of the department—their ability to be able to require information from the TAB. This was a change that was introduced through the select committee process, and I think the rationale for that was to provide for the chief executive, on behalf of the Minister, in some circumstances, to seek the information, alongside the Minister being able to do that directly. My question for the Minister is about whether that is accurate or not.

Secondly, the powers that are, effectively, conferred on the chief executive under clause 5, which would be new section 58A, do relate to an ability for the Minister to seek any relevant information that is specified in the notice that they would put to TAB New Zealand. That’s quite a wide-ranging ambit. The addition in new section 58A(2A) is slightly constrained, in that it relates to the chief executive basically utilising that power for the specific purpose of advising the Minister—yes, got that—but specifically around TAB New Zealand’s performance of its functions.

So my question to the Minister is: is it anticipated that the two powers, whether they’re exercised by the Minister or by the department’s chief executive, are in parallel; not in terms of time but could be exercised by either of them, for the same purpose? Or is it still anticipated that the ministerial request for further information is expected to be much wider than that of the chief executive? I’ll start with that first question.

Look, for the sake of brevity, perhaps if I could deal with that. The answer is if you’re running your department properly and they understand what the Government’s policy is, as explained in the first briefing one ever gets from the ministry, then the answer is it should be in parallel. If you’re running in the opposite direction to your department, then you’re going to be in trouble very, very quickly—or worse still if they’re not following what the Minister’s asking for, he or she having got the approval of the House.

The gist of the matter is that we’ve looked—and I’m very grateful to the Governance and Administration Committee for going through this matter seriously; dare I say, as is best in the select committee stage. Our own forecast of what we wanted to change at this time in the bill’s process: we want to see a series of decisions made now and are prepared for changes when, in the length of time we’ve had to study that, we can see a need for it. But some of the things that I think the select committee was talking about caught even the TAB unawares when they realised what they meant. All we are saying is we don’t have the evidence for that yet. There may come a time yet when we’ll have to, but I don’t think that time is now.

Thank you, Madam Chair. I thank the Minister for Racing for the response around that. I think that is important because it is something that did come through the process around allowing the chief executive to basically pursue some of that information.

I’d like to look at clause 8. This does relate to the ability of the TAB to refuse a bet or a number of bets. One of the things that the Governance and Administration Committee heard was the process that the TAB goes through when a decision around whether a bet should be accepted or rejected does take place, but also around some of the criteria, really.

Now, I understand that there is an Amendment Paper in the Minister’s name to seek to change that, and there are some questions around that. I mean, our perspective is that that criteria needs to be in legislation. Ideally, we would like to see it in the primary legislation, but if it’s going to be in the regulations, well, we can certainly live with that. That’s my understanding as to what the Minister’s Amendment Paper seeks to deliver.

The questions around that, though—and there are a number of questions around the criteria—are an ability for the Minister to provide some certainty. I know that can be very difficult. I mean, this is a process of putting the regulations in place, but it would be comforting to hear from the Minister around what perhaps some of those constraints are as to why it cannot be in the primary legislation and needs to be in regulations. I understand that it’s so that some of the policy issues can be worked through. Fundamentally, I think what is good law is making sure that whatever is in place is workable, for a start, but it would be quite comforting to hear from the Minister about some guarantee. The select committee unanimously wanted to head down this particular path, and so it would be good to get an understanding as to how that was going to be achieved.

Thank you, Madam Chair. I’ll just take the opportunity to ask the Minister for Racing a very quick question relating to sporting codes. One of the things that did come up during select committee was submissions from sporting bodies around how they are able to access funding and that there was, they felt, some discrepancy there. I do acknowledge that there is, actually, a lot of opportunity for people from those codes to be appointed to the board of the TAB. So it was a particular matter that was raised by submitters during Governance and Administration Committee hearings. One of the things they specifically wanted under the establishment of the TAB New Zealand’s monopoly was for there to actually be a formula written into regulation outlining how different sporting codes would receive the distribution of betting money. They also wanted it actually to be written into regulations about requiring representatives of Sport and Recreation New Zealand or sporting organisations to be represented on the board. This was a particular matter where we received a large number of submissions through that process, so I’m just interested if the Minister did give any consideration to that.

Can I say, experience is a funny thing. I can recall when the sporting organisations wanted to get off the board because they were in a full-scale fight amongst each other, and in the end they decided maybe they’d be better served with none of them on it. That’s the truth.

The second thing is: when I read the Entain contract end to end, I wondered who did the fiscals and who did the legals at the time. But I inherited that; that’s what I got.

The other thing is—if I could answer the first inquiry—yes, you’re right about clause 8, but we have moved the concerns that the Governance and Administration Committee had into the regulation powers and left them open for consideration at the time we acquired the evidence to sustain such a statement as was being made by the select committee at the time.

You can ask me your next question, “Why didn’t the TAB tell us that?” Because they never thought you guys were going to do that; that’s why. At the moment that they did, they panicked, because they could see, when it comes to money-laundering and all their requirements both here and internationally, they would not have the powers to be able to act in the first place. That was our concern.

I’m not saying that it is perfect. I’m saying, though, we need a time to ensure that we have the information to make such decisions. But in the meantime, a critical amount of money is capable of being lost because of the brevity in time that we’ve got available, which will affect not only the TAB but it will affect the sporting bodies as well. That’s why time is of the essence now.

So I’m not trying to obfuscate; quite the converse. I’ve been sitting here waiting for months to get this to where it should have got to.

Members, it is time for us to break for the dinner break, and we will resume at 7.30 p.m.

Sitting suspended from 5.59 p.m. to 7.30 p.m.

Members, the sitting is resumed. The House is in committee on the Racing Industry Amendment Bill. We are currently considering Part 1, which consists of clauses 4 to 14, and members also can discuss Schedules 1 and 2.

Thank you, Madam Chair. I had the pleasure of sitting through many of the submissions in the Governance and Administration Committee, and thank you to my colleagues from all parties who asked some useful questions. I do have some questions, in a couple of different areas, for the Minister for Racing. One would be looking at clause 8 and when bets may be refused. We had a number of submissions that actually talked about the assumption—but it’s only an assumption because they weren’t given the reasons—that some bettors were just too successful. I want to be assured that by amending the refusal to accept all or any part of a bet from an individual, any other grounds would not include just being the winning bettor.

I’ve also got some follow-on questions about the visibility of the distribution, the disbursement, of the profits from betting. Now, I realise that TAB contributes over 90 percent of the racing code’s annual income, and that without the TAB—and potentially without this monopoly—racing would not be viable. But I think many people don’t realise what a big contribution it is to a number of different sporting codes—for example, tennis. It’s apparently one-third of their income, but we only know that because tennis chooses to tell us so. I wonder if the Minister might point me to any of the sections that we’re talking about in Part 1 that could potentially lift that veil of secrecy—in that, as I understand it, each of the code’s agreements with TAB is confidential; whether that should remain the case or whether we should see some more transparency? I look forward to the answers.

Thank you, Madam Chair, for the opportunity to be able to ask some questions. Whilst I am a member of the Governance and Administration Committee, I only listened to some of the contributions from different submitters—certainly with the racing. I want to draw the attention of the Minister for Racing to clause 9, in terms of the department who will monitor the compliance. I know in the following couple of pages it is outlined with regards to “Regulations relating to harm prevention and minimisation”. When I did have the opportunity to make a contribution to Minister Jones, it was to highlight the issues of online gambling harm, particularly in South Auckland. Specifically, I appreciate that this is the racing bill that will permit, once the bill goes through, the online aspect of it. My concern is that for Māori and Pasifika and young people who are very interested in online gambling, the whole portfolio of racing is a good thing because we are looking at the sustainability of the industry.

I have read the Minister’s legislative statements, and my question is with respect to section 92A, the “Department to monitor compliance”. I wanted to ask—it says, at new subsection (2), “TAB NZ must pay the reasonable costs that the Department incurs in carrying out the monitoring functions”; and, in new subsection (3), “The chief executive of the Department and TAB … must enter into an agreement relating to the recovery of the reasonable costs that the Department incurs in carrying out [those] monitoring functions.”

I wanted to ask, Minister, what progress reports will you receive from the department—what will they look like, and are you able to elaborate further to help me understand those? Because whilst Labour is supporting this bill, it is important to understand the harmful effects—which I have another question about a little bit later—with respect to that relationship. Because I know, under the new bill, the Minister will from time to time have the ability to question the board, but also to get progress reports. And I wanted to understand what they would look like—what kind of information will the department get, and will they specifically focus on the problematic groups such as Māori, Pasifika, and young people? It’s the areas that I come from in South Auckland where class 4 licences are a problem, and I understand the Minister didn’t want to go down that road but it is important, because when I go back to the community, Minister, they will be asking me those questions and why I didn’t ask questions around that. Thank you, Madam Chair.

Thank you, Madam Chair. I just want to pick up on the response that the Minister for Racing gave before the dinner break. It is around his new Amendment Paper that he’s tabled that changes section 92. The answer from the Minister which we heard was that shift to the regulation is because the TAB didn’t expect the Governance and Administration Committee to make this change. Well, that is unfortunate because, effectively, we are moving into a monopoly.

One of the things that I’d be quite keen to hear from the Minister around is some certainty to allay concerns that submitters had put before the select committee, which is why the committee made that unanimous change to put it in legislation. I know that the Minister has said that there needs to be policy that’s worked on, but I do think it would be helpful if he was able to give some certainty around what his expectations would be, as racing Minister, around the haste within which the TAB would be expected to undertake—or the Department of Internal Affairs—the policy work to give effect to the intent of the select committee, bearing in mind that there is going to be a change there, which we on face value are certainly happy to support. But I think getting some idea of what his expectations are in terms of how quickly those regulations could be worked upon would be quite helpful.

One of the things, Minister, that the select committee did hear about were those who had placed a bet or sought to place a bet with the TAB and their bet had been refused, but there was no communication with them from the TAB as to why the bet had been refused or rejected. Now, that’s why there is a provision in new section 92(2), inserted by clause 8, that says, “If TAB NZ refuses a bet under this section, it must inform the individual seeking to make the bet of the reason for refusal as soon as practicable after making the decision to refuse the bet.” My question is: given that there is a move to, effectively, transfer across to have some regulatory function there, is the Minister concerned that there is that lack of communication provided from TAB and New Zealand to bettors? I think that is still important.

There is the issue that my colleague Rachel Boyack touched on around those national sporting organisations who do receive an element of funding, and, as Celia Wade-Brown has said, that’s somewhat shrouded in some mystery. The response from my recollection from officials was that there is already—because what the sporting organisations were calling for was, again, a guaranteed seat on the board of the TAB—that power granted to the Minister to consider a full range or suite of matters in making an appointment. So whether he’s prepared to make some response—I know he referred to this in his initial comments, but just to respond to that specific question.

Well, first of all, trying to deal chronologically with the questions raised—bear in mind, as an overarching statement, this is a regime that I inherited. This is a regime that had a contract which, in my view, at the moment I saw it and well after the event, and weeks after the event of my responsibility, I was gravely concerned about, but it was a fait accompli. So I’m trying to deal with that.

The second thing is the Greens asked, sequentially, first of all, about some bettors maybe being too successful. Well, just go back to the fact of the casinos: which industry asks you to go along and say, “Here’s all my money. I hope I might win some of it back.”? Now, this is not what I’m talking about. I’m talking about an industry where people can be studious, they can study, they can understand form, get a good tip, make a fortune if they get the right tip, or just sometimes—somebody I knew very well was at the racecourse in Randwick in Australia and he saw a horse that had the name “Mary” on it. Mary was his wife’s name, and it came in 35 to 1—total outsider. Of course, he was a very happy person at the time. People have all these sorts of reasons to be making a punt.

But my point is, some being better than others, well, there’re some who are so much better than others, but usually they bet on a place—not first place. They bet for a place, they take lower odds, and are just so much more successful. I can’t really explain that, because everybody else out there thinks they’re lucky and they’ll have a go. Some people only have a punt maybe once a year—maybe it’s just the Melbourne Cup—and there are some who make it part of their lifestyle.

As for the disbursement of profits, well, you see, the sporting codes originally asked for confidentiality. I find it very confusing, because over the years there’s been such a disparity. First of all, they wanted to all be on the distribution group, then they found they were at loggerheads so often that it wasn’t worth it. They wanted to get off it and leave it to the then established committee, and, as a consequence, aspects of the confidentiality remained. But I might just say this, you know: sometimes—and I’m not making any defence of anything, but this industry used to be supported by tobacco sponsorship, and then one day a certain party said, “That’s out.”, despite the fact that they were giving people a smoke before they got into an aeroplane and were possibly going to die within the next 20 minutes. They then banned it from the Returned and Services’ Association. So there’s a consequence to all that, and we had to find a new way of funding this operation, and differently. No one can go backwards; that’s the way the world is, but as I say, there are always consequences.

As for compliance monitoring, well, certainly we’ll be monitoring compliance, and we rigorously—well, my ministry office does; it watches out for reports all the time. Somehow, we suspected you were going to ask that question, so I got this report ready for you: class 4 gambling has been funding the racing rejuvenation fund for the past two years and the primary funding source of the Racing Integrity Board. The TAB operates 449 machines across 39 venues. That’s only 3 percent of the class 4 market, which the previous Government in its final days said they didn’t want them to engage in, even though it was only 3 percent of the class 4 market. So 97 percent of the problem we’re not going to deal with.

💬 Tangi Utikere: More than 400?

This one’s—see the convenience of that?

💬 Tangi Utikere: More than 400?

Yes, 449, but only 3 percent of the class 4 market. What’s happening with 97 percent? What’s going to happen to the 97 percent, or out of sight, out of mind? Anyway, it’s only a question.

Stand-alone TAB venues where they’ve only been able to operate within don’t sell alcohol, which is a contributing factor to the risk of gambling harm. TAB stores mainly operate moderate hours—that’s 10 to 10 p.m.—compared to other class 4 and casino offerings: all hours of the day and night, as you well know. All stand-alone TAB NZ venue staff receive ongoing training for harm minimisation. Do the rest? Do the other 97 percent? All stand-alone TAB NZ venues have CCTV and facial recognition technology to monitor for the signs of harm and to ensure application of exclusion gallery. TAB NZ contributes both wagering and gaming contributions to the problem gambling levy. So I just thought that might be some information you need to know in the background of that question.

Somebody’s asked about dysfunctionality and the reasonable cost, the industry needed to be studying now. It is an ongoing matter, but I think they’re learning fast in the changing environment. I mean, it wasn’t so many years ago that Minister McAnulty made the change at the Entain deal. As for Labour talking about some certainty around a haste to effect Governance and Administration Committee intent, yes, there is a lot of haste to do that. The TAB was asked, “Do you not foresee that they might go to select committee and then”—what’s the word?—“go rogue and go down their own pathway?” They said no; they thought they would see the common sense of a very balanced, cross-party, bipartisan-generated paper, and if they had an intent they might ask them to come along and make a further submission.

💬 Tangi Utikere: It’s unanimous.

Well, it’s unanimous now, yes, but it wasn’t then. I’m not blaming Labour for this; I’m just talking to the rest of my colleagues on the committee that sometimes if you think that something needs to be done, it may be just to go and ask the number one player in operation of the consideration before the select committee what did they think. It might’ve been a good idea—just suspend it, have it passed in motion, reliant upon further consultation with the number one body. So I don’t think there’s any malignancy here, but I do accept this, and I made it very, very clear: if there are concerns that emerge in the select committee and they are valid, then we want to ensure that going forward there’s agreement across at least three-quarters of this House. Otherwise, it’s here today, gone tomorrow.

Now, this is an industry that should be making $3.5 billion for our economy. Truly, if we were performing like the Irish, we’d make $3.5 billion for our economy and we’d be doing far better in exports, and as the rise of China happens in terms of the racing industry, we’d have far more mares and far more exports. But here’s the good news: we went off to Saudi Arabia recently, and they’re coming to take a good, hard look, because they could be very interested in investing in this industry in this country.

So early days now. We do take your concerns on board and we will be monitoring that over the next year, and we’ll certainly be reporting to you when you have the breakout week where you ask Ministers what’s going on.

Thank you, Madam Chair, and thank you, Minister, for your answers. I’ve got a quite specific one about what recourse is there for a bettor who feels they’ve been unjustly refused or restricted? It’s pretty clear, the grounds that TAB will exercise that refusal. But where a bettor thinks they have been unjustly refused, what are their options? I mean, most bettors are not going to be in a position to take the TAB to court or anything. I guess that speaks to the challenge of the creation of this monopoly—which we are supporting and we understand the reasons behind it. But who checks the TAB in the exercise of the power that they will now have to refuse bettors, where those bettors have no other place to go?

Thank you, Madam Chair. I just wanted the opportunity to take a brief call on this bill. I wasn’t there for all of the deliberations on it, but I was able to participate as chair of the Governance and Administration Committee when the report was signed off. One of the sections that we were particularly interested in when we scrutinised this piece of legislation was the section around specifying the circumstances in which the TAB may exclude a person from betting. Some of the discussions that we had around that were focusing on the current situation, but also on the situation that we thought was undesirable, which was when someone may be treating TAB staff in a way that is not aligned with the type of behaviour that we would accept in any workplace. So that was quite a bit of the discussion at select committee.

I note that the Minister for Racing has brought in Amendment Paper 287, which replaces new section 98A(1)(b) in clause 12 of the bill, and I just wondered if it would be possible at all to set out his reasoning for that. I’d understood at select committee that we were looking at regulations to perhaps address a situation where someone, if they were putting in a bet in person, might be putting TAB staff in an awkward position. They might be harassing them or annoying them in a way which was inappropriate, and I think that the Minister agrees that that is not a situation where the TAB should be required to continue to service that person as a customer.

I note that in his Amendment Paper, that is borne out in further detail. I just wondered if the Minister might want to reflect on the reasons for that, because I think this is an important part of this piece of legislation because of this fundamental change of having to give reasons, and also specifying the types of workplaces that we expect to have in New Zealand, and the type of behaviour which we think is appropriate for people to have to deal with. That was a particular area that the select committee was interested in, and I just wondered if the Minister might like to comment on that in relation to his Amendment Paper.

I move, That debate on this question now close.

The question is, That the Minister’s amendments to Part 1 set out on Amendment Paper 287 be agreed to.