NSW Office of Liquor , Gaming and Racing

 

Review of the Greyhound Racing Act 2002

 

Response Paper

Submitted by the NSW GBOTA

November 2, 2007

 

 

1.   INTRODUCTION

 

1.1   NSW GBOTA Profile

This submission is submitted on behalf of the NSW Greyhound Breeders, Owners and Trainers Association. The NSW GBOTA is a state-wide Racing Association and Participant Representative Body.

 

It has racing operations at the following venues:

 

 

The following NSW greyhound racing clubs are also affiliated with the NSW GBOTA:

 

The Affiliation relationships are based on the fact that the NSW GBOTA and its affiliates seek to foster the development of greyhound racing co-operatively and with industry outcomes in mind.

 

In addition to its racing function, the NSW GBOTA is also a highly organised representative group on behalf of owners, trainers and breeders. The Association currently has approximately 1200 members and 30 Branches throughout NSW. The Branches meet on a monthly basis and promote suggestions via the Directorate. The NSW GBOTA believes this process enables it to represent the position of average participants accurately and effectively.

 

The NSW GBOTA Directorate comprises 10 members, all of whom are elected for two year terms by members.

 

The NSW GBOTA is represented on a number of State and National bodies as follows:

 

1.2   Purpose of the submission

This submission comments to the efficiency and effectiveness of the greyhound Racing Act (2002) which, in effect, can be described as the enabling tool for the separation of commercial functions (and creation of GRNSW) from the previous combined commercial and regulatory model (Greyhound Racing Authority).

 

Under the terms of the Act, the Minister must –

 

1.3   Policy objectives of the Act

The Act does not have provisions which expressly state the objectives, but they may be inferred from Government racing policy, the Hansard of the Parliament when the legislation was debated and the provisions of the Act.

 

A summary of the objectives on this basis is as follows:

 

1.4   Questions to be addressed

To assist with the review of the Act, the NSW Office of Gaming and Racing has released a Discussion Paper which suggests the submission consider a number of questions including the following:

 

•  Do the provisions remain appropriate after five years of the Acts' operation?

 

•  Has the separation of the commercial and regulatory functions been effective?

  Is the  dual Board structure appropriate?

•  Does the independent status of GRNSW and HRNSW continue to be appropriate?

•  Does the composition of GRNSW continue to be appropriate?

•  Do the appointment processes for GRNSW continue to be appropriate?

•  Do the functions and powers of GRNSW continue to be appropriate?

 

This submission makes observations as to (a) whether the current statutory framework has cost efficiently and effectively met the intended objectives and (b) the questions suggested by the Department. It also submits recommendations regarding what would be viewed as a superior statutory framework for the future.

2.   OBSERVATIONS

 

2.1   Ongoing Relevance of the Objectives of the Act

 

2.1.1.   Provide a statutory framework for the sustainable economic development and   future viability of the greyhound racing industry.

 

The NSW GBOTA believes that this objective remains relevant. The NSW greyhound industry sits very much at a crisis point. It trades with competitive disadvantage against some States with regard to taxation arrangements, it does not have the advantage of Gaming revenue as provided in Victoria and is disadvantaged financially with regard to Intercode arrangements whereby it receives 13% of total Wagering earnings whilst actually generating 16% of earnings. In addition, NSW greyhound racing faces emerging changes to the wagering industry with regard to Corporate Bookmakers and Betting Exchanges. It is essential that the statutory framework emerging from the review of the current Act is able to nurture the key requirements of ongoing economic development and future viability.

 

2.1.2   Provide a statutory framework for the integrity of the conduct of racing and   associated wagering on racing.

 

The NSW GBOTA recognises the importance of integrity of both racing and wagering activity. The objective remains relevant but concerns exist as to whether the current statutory framework ensures that integrity is undertaken as cost efficiently and as effectively as possible.

 

2.1.3   Give greater autonomy to the greyhound industry in relation to commercial decision making.

 

The NSW GBOTA believes that this objective remains highly relevant. The commercial direction of the NSW greyhound industry should remain an industry decision as opposed to one impacted upon or determined by Government.

 

2.1.4   Separate the commercial and regulatory activities of the controlling bodies for the   greyhound and harness racing industries, and expressly create the commercial   Boards as independent of Government to enhance the strategic and commercial   governance of each code of racing.

 

The NSW GBOTA accepts that the NSW greyhound industry does require peak body management of both commercial and regulatory functions. We question the need for the functions to be driven by separate organisations. The NSW thoroughbred industry has just the one peak body which undertakes both commercial and regulatory functions effectively. With regard to greyhound racing in many other States of Australia, the commercial and regulatory functions are managed by the one peak body effectively. The NSW GBOTA accepts the point that commercial and regulatory functions are different and separate functions but remains completely unconvinced that the management of these functions required (or requires in the future) the creation of separate managing organisations.

 

2.1.5   Retain the regulatory activities under Government control and amalgamate the code specific regulatory bodies (the GRA and HRA) for reasons of best practice   and economies of scale.

 

The NSW GBOTA does not believe this objective remains relevant. The NSW greyhound industry does have the capacity to self regulate. As stated in 2.1.4, the NSW thoroughbred industry self regulates and there appears to be no logical reason why the NSW greyhound industry is not afforded the same right. The cost efficiencies forecast to arise by the combination of the harness and greyhound codes regulatory functions are not apparent. There seem to be far greater scope for economics of scale and integrated best practice by the one organisation assuming responsibility for greyhound racing's commercial and regulatory functions.

2.2   Response to questions raised in the Discussion Paper

 

2.2.1    Do the provisions remain appropriate after five years of the Acts' operation?

 

The NSW GBOTA holds reservations as to the following terms of the Greyhound Racing Act (2002)

 

2.2.2   Has the separation of the commercial and regulatory functions been     effective? Is the dual Board structure appropriate?

The NSW GBOTA does not believe the separation of functions has been successful. The industry has benefitted by the autonomy associated with granting it commercial decision making autonomy. However, separating the regulatory function seems to have clearly failed. The primary drivers behind the splitting of the functions were (a) the Government retained a role in the code's regulation and (b) it would drive cost efficiency. As previously stated, the NSW GBOTA does not support the view that the NSW greyhound industry cannot self regulate. And the separating of commercial and regulatory functions has seen peak body costs rise from $1.47M in 1997/98 to $4.67M in 2006/07. It has not been cost effective. The NSW GBOTA believes that a superior option for the future would be as follows:

2.2.3   Does the independent status of GRNSW and HRNSW continue to be appropriate?

The NSW GBOTA believes that it is essential that the commercial role of GRNSW and HRNSW remain independent of one another and free from Government intervention.

2.2.4   Does the composition of GRNSW continue to be appropriate?

The NSW GBOTA believes that the current structure of GRNSW can be improved. As stated 2.2.2, the NSW GBOTA favours a combining of the commercial and regulatory functions into one organisation serviced by two Boards of direction. We believe that the regulatory functions should be restricted to stewarding and rules, drug testing and appeals. Some functions currently determined as regulatory such as grading and licensing should be classified as commercial functions. We believe that the commercial Board should continue to include within its composition current nominees plus a further two nominees to be appointed on a skills basis. The NSW GBOTA believes that such structure would ensure that the commercial Board had an appropriate blend of industry, knowledge, management skills and outsiders' perspective. We believe that the Chairman and the Chief Executive Officer of both the commercial and regulatory Boards should be common. This is to say, that the Chairman would chair both Boards and the Chief Executive Officer would serve, managerially both Boards. In addition to the Chairman, the regulatory Board would have two other members determined by the Minister and anticipated as having appropriate legal and regulatory backgrounds.

2.2.5   Does the appointment processes for GRNSW continue to be appropriate?

The NSW GBOTA is comfortable with the appointment process that applies to all current GRNSW nominees with the exception of the participant appointment. Currently participants nominate for the position but are appointed by a selection committee. We believe this appointment should in fact be subject to an election process, whereby all registered participants be permitted to vote.

As to our proposed model, the appropriate composition and appointment or selection process would be as follows:

 

Commercial Board

 

Appointee/Nominee	Process
(1) One member nominated by the NSW GBOTA	Nomination determined by the NSW GBOTA Board of Directors
(2) One member nominated by the NSW National Coursing Association	Nomination determined by the NSW NCA Board of Directors
(3) One member nominated by TAB Clubs	Nomination determined by the members of the Metropolitan and Provincial Greyhound Racing Association
(4) One member nominated by the Non TAB Clubs	Nomination determined by the members of the Greyhound Racing Clubs Association
(5) One member nominated by registered participants	Nominee to be a registered person. Nominee to be determined by an election.
(6) Two members appointed by a Ministerial selection process	Appointee (1) required to have marketing skills and experience. Appointee (2) required to have commercial skills and expertise
(7) Independent Chairperson	Appointee required to have strong commercial and/or law skills and expertise Appointee to be determined by members (1) to (6) inclusive

 

Regulatory Board

 

 

The NSW GBOTA also takes the opportunity to comment as to the composition and appointment process for the Greyhound Racing Industry Participants Advisory Committee.

This Committee comprises in its membership the following: (a) an owner; (b) a breeder; (c) a licensed trainer; (d) a licensed bookmaker or clerk and (e) a consumer of racing and betting services. It is charged with providing (a) strategic advice to GRNSW and GHRRA; (b) communicating between industry stakeholders and GRNSW and GHRRA, and(c) providing a discussion forum for industry concerns and making recommendations to GRNSW and GHRRA.

The NSW GBOTA would argue that its own membership structure is far better equipped to undertake the activities required of GRIPAC. The NSW GBOTA has 30 Branches and approximately 1200 members throughout NSW. It also has District Associations in the metropolitan region and the Hunter Valley. All Branches meet monthly to discuss industry relevant issues and the NSW GBOTA membership would have a far superior capability to genuinely reflect industry participant views and provide advice to the peak bodies (or body) based on this.

The NSW GBOTA notes that Greyhound Racing Victoria formerly recognizes the Victorian Greyhound Breeders Owners and Trainers Association as an adviser and regularly refers matters to the Association for advice.

The NSW GBOTA accepts that GRIPAC is unlikely to be replaced in total and will exist in some shape and form in the future. Accordingly, we would suggest that its composition be expanded to include two representatives of the NSW GBOTA membership. These representatives would be determined by the Association's District Associations as opposed to the Association's Directorate.

 

2.2.6   Do the functions and powers of GRNSW continue to be appropriate?

The NSW GBOTA believes that the functions of GRNSW should be expanded to undertake grading and licensing, thereby reducing the functions classified as regulatory.

 

3.   CONCLUSIONS

3.1    The NSW GBOTA believes that the separation of commercial and regulatory   functions has not been successful. It has failed in terms of cost, it has created   needless areas of administration duplication and greyhound racing's overall peak   body decision making process has been more complicated than it needs to be.

3.2    The NSW GBOTA believes that the NSW greyhound industry faces a very   challenging future. Strategic issues before the peak bodies include:

3.3    The NSW GBOTA believes that its membership is highly organised, professional and democratic. Given this, the membership of the NSW GBOTA should be granted appointment rights in advisory committees such as GRIPAC or its replacement.

 

 

4.   RECOMMENDATIONS

 

5.  That the regulatory function of the new organization be directed by a Board composed of –

 

6.  That the Advisory Panel supporting the commercial and regulatory Boards include in its composition two members of the NSW GBOTA, determined by the Association's Metropolitan and Hunter Valley District Associations.

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