With the recent news of a National Tote Pool by the end of next year I thought I would share some of my views.
Will turnover increase on Horse Racing in Australia ?
In short the answer is NO, unless Tabcorp can re invigorate interest in pari-mutuel style wagering.
Why it won’t increase ?
Tote turnover is in severe decline and has been for some time now. With no marketing directed at tote betting the young, modern-day recreational punter barely knows it exists, and if they do it’s through a best tote product offered by one of the Corporate Bookmakers. Nowadays very little of this money makes its way back into Tabcorp’s pools regardless of the bet size. In reality, a National Tote will deliver a more accurate final tote dividend due to the larger solitary pool of money with the same market percentage averaging 118%. The majority of punters are extremely habitual, once they are gone it is going to be very hard to get them back.
Ideas to stimulate interest and increase turnover
Jackpots – Punters love jackpots. I believe it would be a smart move for Tabcorp to continually create their own jackpots on exotics bet types for the main races of the day. The increased pool size due to the jackpot will help negate a high percentage of the marketing cost.
Rebates for punters – The way rebates are structured now, the more you turnover the higher your rebate is. In my opinion this is a flawed and unfair system which fails for both the high turnover player and also the recreational punter. The high turnover player, who all tend to place their bets in the last few seconds before jump, nowadays struggle to make a decent profit because not only are the dividends being crunched shorter due to the rebates, but there is now barely any recreational money to win due to the lack of interest and uncompetitive nature of the tote pool.
I think there are two different ways Tabcorp could structure rebates. Firstly, offer an 8% to 10% rebate to ALL punters on ALL bet sizes for winning or losing bets placed over the internet. My second idea is to offer a staggered rebate depending on how early the bet was placed. I think this idea could create enormous interest and really help grow the pools. An extremely attractive rebate of at least 12% could be offered if a bet was placed say 30 minutes or more prior to the race. To keep it simple say 4% to 5% is offered for all other bets. What Tabcorp are giving away with the 12% rebate they will more than make up for with the higher influx of money from the high turnover player who is betting to win a certain percentage of the pool regardless of the size. This idea will only work if the ‘early rebate’ is too good to refuse, as placing your bet 30 minutes or more prior to the race is not an attractive proposition for the majority of punters.
Rebates for bookmakers – I have always been astounded that bookmakers are allowed to use the final tote dividends and offer an enhanced version of it. When corporate bookmakers in Australia first existed they weren’t allowed to offer tote products at all. After 5 or so years this rule changed. Prior to the UK Corporate invasion bookmakers used to trade punters money which was wonderful for all and helped build tote pools. Nowadays this barely exists as bookmakers profile customers and the majority restrict any punters they believe are not going to be economically viable rather than use their trading skills to manage a client. When the National Tote Pool begins many Corporate Bookmakers will once again undercut Tabcorp by offering products like Tote+5% etc with not a dollar seeing the light of day. A solution to this problem would not be to ban all corporates from offering tote products, but coercing them into directly placing all money taken on these products straight into the National Tote and rewarding them with a 8% to 10% rebate.
Bet Types – Punters love being able to win a lot of money for a small investment. ‘Pick the card’ or ‘Pick the exact finishing order’ style exotics could be introduced with a jackpot pool on Saturdays main race.
Marketing – If the National Tote pools are any chance of increasing turnover then Tabcorp must divert a large portion of their marketing away from fixed odds betting. The recreational punter is losing their money at such a high rate now due to the high percentage fixed odds markets, not only are they unable to invest on upcoming races, they are rapidly losing interest in the sport.
Technology and Data – The new age punter is no longer happy to stand in a TAB and place bets through a terminal. Tabcorp need to be encouraging new players into the market by offering free, up to date date, accurate historical data as well as being able to provide state of the art and versatile automated betting platforms for all levels of punters.
To reinvigorate tote turnover on Australian Racing will not happen quickly, but I believe it certainly is achievable if Tabcorp take a long term investment approach rather than focusing on short term revenue.