Racing VIC drop a bomb

Racing Victoria has set the cat among the pigeons today with their announcement of a new set of product fees for betting on Victorian Racing product, all to take effect in just over six weeks.

Instead of the current 1.5-2% turnover rate, the new scenario would see 1.5-3% turnover or 15-30% of gross revenue – whichever is greater. Racing Victoria had previously supported the turnover model fought so hard for by Racing NSW in its court battle with the corporates.

Interestingly, it is to be applied on a per meeting basis, which does seem unfair. i.e. If a Corporate turnovers $1 million on Melbourne Cup day and wins $300,000 they pay $90,000 to RVL – they then back up on Oaks Day and turnover $1 million again and lose $300,000 they pay RVL $30,000. They’re square for the 2 days but they’ve paid RVL $120,000. If they’d broke square both days they would have paid RVL only $60,000. Corporates and on-course bookies have a right to be upset about that.

Australia’s biggest operator TABCORP, were supporting Racing NSW in it’s corporate battle. Now that the Victorian racing authority has changed tact with a gross revenue model, TABCORP won’t escape this money grab. They have already announced a $4 million earnings hit for the next financial year.

So what does in mean for punters and the continuing battle for fairness in the Australian wagering landscape?

It’s quite difficult to get an accurate idea, but you can bet that it will be the punters who in one way or another will end up the losers.

Foreign corporate raiders are hardly going to settle for a lower return on their investment here – and the local giants TABCORP and Tatts have shareholders to answer to and revenue targets that won’t be reduced.

Further restrictions and account closures on winning punters will be inevitable. Perhaps we will even see more restrictions on punters who only lose 1-5% of their money. That makes it more important than ever that regulators such as the Northern Territory Racing Commission finally stand up and do something about fairness.

The Australian (or is it European?) Wagering Council’s (AWC) response smacks of hypocrisy as usual. Firstly, let’s acknowledge that the AWC is made up of Bet365 (UK), Sportingbet (UK), Ladbrokes (UK), Paddy Power (Ireland) and Unibet (Euro). There isn’t too much “Australian” about it – it’s a lobby group for foreign interests.

The soon (if not already) to be 100% Crown-owned exchange Betfair are also a member. We’re not quite sure why as in the past they have even disassociated themselves with AWC statements. (Mind you, this decision does have a huge impact on their business also – could they dump Australian racing altogether?)

Anyway, the main argument put forward by the AWC is about integrity and the risk that less competitive prices will lead to a rise in “illegal and offshore betting”.

This may well be the case, but how convenient is the argument now?

Closing winner’s accounts, restricting punters to $1 bets, advising punters that they are “uneconomical” because they have the temerity to win – all factors that drive punters offshore or underground. Integrity doesn’t seem to be an issue when punters are the ones being disadvantaged through a money grab.

Perhaps racing needs to sort out its sustainability issues on its own. Is there too much racing? The answer is most certainly yes.

You can’t help but feel this new fee structure is aimed at getting more of a return for the industry from corporates betting tote odds. Maybe restricting Corporates to only being allowed to bet fixed price and charging them a 1% turnover tax and then 2% turnover tax on Group 1 racing days would be advantageous to all.

If this were adopted, racing regulators and the Tab would have to look seriously at dropping tote pool take-out rates. They’d be loathe to but they are staring down the sports betting juggernaut that charges its customer on average 13% less than racing.

It’s a fine balance between having enough money to sustain a healthy racing industry and then starting to drive punters away to lower margin sports betting.

One thing is for sure, bookies will be passing on most, if not all of the added cost to punters through greater risk-management. Winning will get a lot harder – if it wasn’t hard enough already. If it becomes too hard to have a win, then racing and its direct participants will be the ultimate losers.

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