Racing Industry Amendment Bill

on behalf of the Minister for Racing: I present a legislative statement on the Racing Industry Amendment Bill.

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon SHANE JONES: I move, That the Racing Industry Amendment Bill be now read a second time.

This bill amends the Racing Industry Act 2020. I want to traverse a number of the points, for affirmation and reinforcement, that were made in the first reading. Quite simply, it’s designed to safeguard the sustainability of our racing industry, which is almost fully funded by the TAB. This industry should not be underestimated, generating $1.9 billion to our economy in 2022-23, employing 13,500 fulltime-equivalents across the country.

Let it be known that less than 8 percent of the horses in group 1 races in Australia are from New Zealand but, consistent with the renown and the prestige associated with this incredibly important domestic industry, nigh on 22 percent of all races at an elite level are won by our horses. So we have an opportunity to grow the racing industry, both domestically and in terms of international exports, and, in turn, grow the returns in terms of what we believe this industry is capable of generating—an industry that sadly has been overlooked, neglected, at a time where marginal concerns threaten to overwhelm animal industries such as this one. The current system needs to be futureproofed, and we need to do better so that we generate the surplus and every horse or every service that generates overseas income shows that this is a contributor to doubling our nation’s exports.

The legislation will retain betting revenue in New Zealand and enable us to do particularly well given the industry has faced a host of other threats in terms of people being able to engage in betting activity without the nation State collecting a fair return.

Now, let us focus just for a moment on the Governance and Administration Committee’s scrutiny of the bill. This committee—and we have to acknowledge the people who have served on the committee—have recommended that it be passed. There were 101 submissions on the bill, and the select committee showed a great deal of diligence and professionalism in addressing the issues raised by these various submitters. The House should note a vote of thanks for the thoroughness in terms of the submissions process and acknowledge the people who made the effort and came and spoke to this committee of our Parliament. To do what? To improve the quality of the bill. It’s a timely reminder that there are many of us in the House who should always pay attention to what can be learnt through the select committee process, where a select committee process is appropriate.

The committee recommended various amendments, and no doubt they will be addressed in the committee stages, but one or three are deserving of mention. Most provisions in the bill will come into force after Royal assent. Clauses related to the repeal of the point of consumption charge will take effect two years after Royal assent, enabling any outstanding charges to be collected from offshore operators on bets that were placed before the monopoly comes into force. The committee correctly recommends an amendment that would allow this repeal to take place sooner, rather than in two years, by Order in Council if the cost of collecting the charges outweighs the remaining money to be collected. There’s an expansion of ministerial powers to be able to request information from the TAB, and the chief executive of the department shall be empowered to request info from the TAB. Provisions for regulation-making powers relating to harm minimisation and consumer protection will be provided for. And we understand the committee was generally satisfied such powers were broad enough to deal with the kinds of regulations that could be made in the future to ensure that we do not encounter difficulties of an ultra vires nature.

The committee recommended amendments to the regulation-making powers to provide more certainty, given the nature of the requirements that could be placed on the TAB in the future. The committee’s recommendations are sensible changes—however, with one caveat. We give notice of our intention to place and table an Amendment Paper during the committee of the whole House. The committee heard concerns from submitters regarding potential misuse of TAB’s ability to refuse bets without reasonable cause. Therefore, the committee recommended this ability be removed, and the legislation limits its ability to refuse a bet. It is understood this was to ensure that if the TAB is going to refuse an individual’s bet, it should be on reasonable grounds—not, for example, on the basis that an individual is simply a successful punter. We appreciate the good intent this represents, and we are committed to ensuring adequate consumer protections, as this could have unintended consequences for this important industry—i.e., racing and sports.

It will also restore clause 8 to how it was drafted when the bill was introduced. Thus, this will make TAB New Zealand’s ability to refuse bets subject to regulations made under the consumer protection provisions. The Amendment Paper moves the changes at select committee into regulation-making powers, giving us more time and flexibility.

The bill is a positive step towards protecting the future of this industry—something near and dear to the leader of my party, the party we belong to—and it builds on our global reputation as a leading racing nation. Once again, we thank the Governance and Administration Committee, people who made the submissions, and officials for their work. Mr Speaker, thank you. I recommend this bill to the House.

The question is that that motion be agreed to.

Kia orana, Mr Speaker, meitaki maata. It’s a pleasure to rise on behalf of the Labour Party and speak in the second reading of this bill. I want to pick up on some of the aspects that the Minister the Hon Shane Jones has just noted in his second reading speech. But before I do, I think it’s important to note that this does continue a suite a work that was initiated under the previous Labour Government. The reason for that is because, as the Minister himself has alluded to, this is an industry that is vital and important to New Zealand’s economy, and the sustainability, protection, and support that this House can offer the industry is very, very important indeed.

I think we all have our own reflections on race meetings that many of us may have been to over the course of our lives, and over the course, perhaps, of the last 12 months, whether it’s a meeting at Wingatui or Addington or whether it’s some of those other meetings like the Golden Kiwi, which, actually, my colleague Lemauga Lydia Sosene and I were able to go this year. There are prime examples within the industry, and that is just one snapshot of what happens, of that $1.9 billion value-add that actually is contributed to the New Zealand economy from this very important industry. So the Minister is correct when he says that it’s an industry that should not be underestimated, and certainly one that should not be overlooked and neglected, and that’s exactly why Labour in Government sought to kick-start this suite of changes to do exactly that. So it is pleasing to see that the racing Minister has picked that up and has carried that mantle on.

The number of individuals that are employed and engaged in this industry—I know the Minister has touched on that, but it does lend itself to the numbers—and not just around fulltime-equivalents but the number of volunteers and others that are associated with this industry, is in excess of 40,000 people domestically. That naturally leans into the fact that we are a global leader when it comes to that sense of racing excellence, whether it be breeding or whether it be those that are involved in ownership, training, or others parts of the system as well.

We supported this to the Governance and Administration Committee. It went through a number of changes that the Labour Party were very happy to support, and we will be supporting it at second reading this evening. I want to acknowledge the work of the Governance and Administration Committee. My colleague Camilla Belich chairs that committee, and prior to her was Rachel Boyack. Both of those chairs have navigated this bill through the process. I do want to also acknowledge the many submissions that were received and the submitters that took time to work through that, and also the officials that were part of that process as well.

What this will do is, basically, strengthen the legislative net of the around $180 million a year annually that, effectively, goes offshore from New Zealand in the form of online betting for sports and for racing. Ensuring that that legislative net provision is put in place to, basically, capture that $180 million—I’d suggest that that’s a conservative estimate at the moment—will ensure that that injection of cash or revenue into the industry is maintained domestically to continue to grow the industry and make it strong as well.

One of the changes that the select committee did pursue was around the nature of the TAB being able to, basically, refuse a bet and the circumstances that exist within which the TAB could do that. Now, what we heard from submitters was quite an element of concern that there doesn’t seem to be any guidance or any framework around the decisions that may be taken by the TAB. Certainly, we heard about a lack of communication in terms of, once that decision had been taken by the TAB, often a punter not knowing the reasons behind that. So the Labour Party very clearly supported the change in the legislation to insert particular criteria upon which the TAB could only refuse a bet, and, subsequent to that, to ensure that there was a provision for that to be communicated to the punter in a reasonable time frame so that they knew, actually, that their bet was not going to be accepted and the reasons for that.

I know that the Minister has already tabled the Amendment Paper that has been referred to this evening. The position of the Labour Party—we will no doubt get through that when we get to the committee of the whole House stage—is that there must be legislative provision within this bill for those changes to be made so that the TAB follow through on that and also that they communicate with punters.

So whilst it is pleasing to hear from the Minister in the House this evening that the movement of that from the primary legislation to secondary legislation in the form of regulations is what the Minister and the Government are seeking, the reason for that is to provide the time and the flexibility to do that. So we will have some questions in committee about how that could be achieved to ensure that it does give support and does honour the intention of the select committee who were unanimous around wanting that change.

The other disappointing fact that we did deal with is the Government’s position that there was not going to be any movement on the TAB’s current—they currently hold a number of class 4 gaming licences; these are, effectively, your pokie licences. What the Labour Party, supported by the Greens, in our differing view—or comment in the report—clearly indicated is that this was part of a conversation when the former Government was initiating this change. We would have liked to have seen that commitment honoured so that in exchange, effectively, for the TAB receiving a guaranteed legislative net of money—so revenue—they would, effectively, give up their ownership to the class 4 licences. It’s disappointing that that has not flowed through. Yes, we hear that the TAB is a gold standard operator and all of those sorts of things, but this is also about harm minimisation, which is also incorporated in the bill. That is pleasing to see.

There are a number of other changes that I’m sure we will refer to at committee stage, but, on this side of the House, we support the industry. As I say, that is why we initiated these changes. It’s pleasing to see that the Government have picked that up and have continued on with that. Along the way, I guess the provision to give the Minister and the Department of Internal Affairs more powers so that they can provide a little bit of incentive around information being forthcoming as well is something that is important. So on this side of the House at second reading, we commend this bill to the House.

E te Māngai o te Whare, tēnā koe. I rise today on behalf of the Greens to speak in support of the Racing Industry Amendment Bill; a bill that, while on the mechanics of who controls online betting, in truth sits at the intersection of racing, sport, and gambling harm in Aotearoa New Zealand.

In many ways, this bill is much less about horse racing and much more about gambling in the digital age, and they’re deeply intertwined. Look, for some people, gambling is a fun and social day at the races; I certainly enjoy the Wellington Cup at Trentham—despite having to buy a new hat every year. For others, though, more seriously, it can be an addiction. It’s one that leads to real harm, broken relationships, and financial ruin.

Let’s be clear: without gambling, the horse racing industry as it currently stands would not be viable. TAB New Zealand contributes over 90 percent of the annual income for New Zealand’s racing codes—that’s a staggering figure. But it doesn’t really end at the track, because gambling on sports now makes up an increasing share of TAB New Zealand’s revenue. Popular codes: rugby, rugby league, cricket, football, basketball, and tennis. In fact, Tennis New Zealand reported that roughly a third of its annual income comes from TAB New Zealand. Over 30 sporting codes also benefit, which is a sign of how deeply gambling has become woven into the financial lifeblood of sport in Aotearoa.

Now, you can compare that to some other countries. China, despite a black market in gambling, only has lotteries. In India, betting even on cricket is illegal—though no doubt it happens; there is a large underground market. Singapore permits betting on only horse racing and football. I remember my grandmother doing the football pools in England. Japan restricts legal betting to a really interesting mixture: horse, motorboat, and bicycle racing—not between them; separately—and some motorsports. It could be fun. But, look, are we really comfortable with making sport so reliant on gambling, particularly when sports that have got really healthy participation but don’t have those bet-able moments don’t score in the same way? Are they going to be supported as much? Again, this is a question of where our collective taxes are going and whether online gambling is letting us off the hook.

In their submission, New Zealand Football highlighted this very tension. They wrote: “The Racing Industry Amendment Bill is … critical for the future of sport in this country, with class four funding [declining], sponsorship opportunities [falling,] and a collapsed domestic broadcast market, sports profits from wagering via the TAB have never been more important.” Mind you, they further noted the lack of transparency in how sports funding is allocated by TAB. I’d ask, particularly: why is every sports allocation confidential?

The bill doesn’t resolve those questions, but we agreed that some of those concerns are worthy of future scrutiny. And while we recognise the financial role that the TAB plays for sport and racing, it’s crucial to acknowledge what’s not being adequately addressed: the global virtual betting market is forecast to quadruple in the next seven years, from US$118 billion to US$448 billion. That’s happening while our environment is being degraded and children are going hungry. That’s the context in which we debate this bill.

Another concern is that funding for harm minimisation is quite a small percentage of the profits. Reducing and preventing gambling addiction remains woefully inadequate. If we’re going to continue depending on gambling revenue, then we must take far stronger action to mitigate its consequences.

I’d also like to reflect briefly on the process. The Governance and Administration Committee received—I thought it was 91 submissions, but maybe the Minister for Racing found another 10. Despite a less-than-ideal consultation period—we’d never have done it at council—running over the December-January holiday, some significant voices were heard, and while the scope of the bill was narrow, there were many important issues raised.

One aspect I was pleased to see clarified is that remote gambling, while illegal in most cases, does not criminalise the individual gamblers, so it doesn’t contribute to extra harm for them, but the rules in this bill prohibit any operators other than TAB New Zealand from offering online racing or sports betting to New Zealanders. It’s interesting how, in this whole House, we’re all supporting, in this case, a monopoly. It’s a pragmatic and just approach.

I was concerned to learn, to my colleague’s point about class 4 gambling machine licences—I didn’t know until after submissions had closed, because, unfortunately, I don’t think any of the submissions mentioned it—that the previous Government had floated the idea of taking away the class 4 gambling machine licences in exchange for that online betting monopoly. Class 4 gambling is the most damaging form of gambling with pokies outside of casinos. We learnt a lot about that on council; we all have our gambling venues policy.

When I was mayor in 2015, we did limit the number of gaming machines, and then in 2021 they did a better job and adopted a no-new-venues policy, a sinking lid. I mean, we’re talking about pokies outside casinos. Some here will remember some debates about establishing a casino in Wellington. Andy Foster will remember the 1990s proposal by Casinos Austria. It never went ahead, partly due to central government placing a moratorium. Good old former mayor Mark Blumsky changed his stance after seeing overseas casinos up close, and he joined some of us in concluding that the social harm outweighed any financial benefit. I’m pleased to see no such proposal has gained traction since.

But coming back to this bill, the select committee process was limited in scope. We didn’t address broader questions around the class 4 venues, direct funding for sports participation, increased animal welfare in racing, or comprehensive protections from gambling addiction. These are all issues that matter deeply, and the Green Party will continue to push for them.

I want to close with a statement quoting from TAB New Zealand’s submission itself: “[The Racing Amendment] Bill seeks to catch up with the digital transformation that has occurred this century, and accelerated [over] the last five years, to protect the original intent of [the] TAB”. So, yes, this bill updates the law to reflect a digital reality, but it also leaves many complex ethical, social, and public health questions unresolved. As virtual betting, fantasy sports, and novelty gambling continue to grow, we must remain vigilant. We must ask not just what makes money but what kind of society that money builds.

Thank you, Mr Speaker. I’m glad to get a chance to rise and pass some remarks in the final stages of this House’s nocturnal activities. The ACT Party supports this Racing Industry Amendment Bill. The racing industry is a hugely important part of New Zealand’s economy; our employment base, as we’ve heard; and also, in a way, our national pride, as the Minister for Oceans and Fisheries alluded to with New Zealand bloodline successes over the Tasman, and also a shared experience that New Zealanders have.

I’d just like to pass a quick story about my son. A couple of years ago, when he was about five, he came running into the house and said, “Mum, mum, can you spot me $20 for the ponies?” That was his grandfather who’d put him up to that. And I thought we all know what that lingo—

Tom Rutherford: Not Lucko!

CAMERON LUXTON: Yeah, Lucko. We all know what that lingo means; what a punter means. It’s part of the New Zealand culture and it’s an important part of our economy and also it needs to be supported.

In this second reading, as reported back from the Governance and Administration Committee, I’ve taken our chance to stand up and say something on this because the ACT Party doesn’t have a permanent member on that committee. So I think the initial comments we’ve had about monopolies and monopolistic power and other things—we’ve got an amendment that I think the committee did a good job highlighting in the process, and I’m glad that the Minister for Racing has tabled an amendment to actually address those concerns. It’s something that I’m looking forward to hearing the Minister address further in the committee stage, because when you’re going to start having section 92s, where you can refuse any bet, you’re going to have to do something about making sure that that’s restrained. So moving it into regulatory powers, I hope that’s the right thing to do. I’m looking forward to hearing the Minister get some questions on that. But I’ll leave it at that. ACT supports this bill. Thank you.

This debate is interrupted and is set down for resumption next sitting day. The House is suspended and I will resume the Chair at 9 a.m. tomorrow for the extended sitting. Pō atarau, pō mārie.

Debate interrupted.

Sitting suspended from 9.57 p.m. to 9 a.m. (Thursday)