RITA boss reveals extent of turnover drop, saved from tanking entirely by Aussie boost

TAB turnover on racing and sport was down an alarming 55% last week, Racing Industry Transition Agency executive chair Dean McKenzie has revealed.

In reporting on a meeting of the RITA board yesterday McKenzie said gross betting revenue for the week amounted to $3.7 million, primarily due to better than expected betting on Australian racing.

“Had we lost Australian racing we would have been left with about $600,000. Clearly we want to see Australian racing continue for as long as possible, but we are also planning for what many see as the inevitable cancellation of racing across the Tasman.”

McKenzie said not surprisingly the effect of COVID-19 and the suspension of racing in New Zealand and worldwide sport meant TAB turnover was significantly down on the same period last year. Last week’s revenue was down 51% on that forecasted.

“We’re down about 75% of available product, which obviously impacts on the bets we can sell, and when we can’t sell any bets we can’t make any money. With continuing fixed costs of the business (rent, insurance etc.) we are losing money.

“That’s the dilemma we have and that’s why we are focusing so hard on reducing costs - not only for the next three months but for the period beyond that.”

Dean McKenzie … “With continuing fixed costs of the business we are losing money.”McKenzie said the Board and executive management team have taken pay cuts and a significant number of the organisation’s staff are voluntarily taking leave.

“But all these initiatives will only go part-way to closing the gap that we and all other international bookmakers are facing.

“We are having active conversations with our banks, the Government and the codes and are reassured by the support our industry has, and by the progress being made.”

McKenzie said the coronavirus pandemic would have a lasting impact on the TAB and the racing industry -“we know a return to business as usual is simply not possible.”

“This week, in conjunction with the codes, we have started working on developing a revised calendar with the over-riding objectives of minimising costs and maximising revenue, underpinned by a continued focus on animal welfare.

“We’ll be racing at fewer venues to achieve the desired outcomes. This will require difficult, and at times unpopular, decisions but the alternative is stark.”

* RITA’s net profit for the 2018-19 financial year was $136.7 million, down $9.2 million (6.3%) on the previous year and $36.8 million below the budget of $173.5 million.

Its total operating expenses were $142.2 million of which $61.5 million was on staff expenses.

Racing Integrity Unit costs amounted to $6.8 million and the Judicial Control Authority $1.5 million.