He claims Dr Nick has blamed taxes and levies on bookmakers, which ultimately affect a punters bottom line by diminishing the prices they are offered. The percentages do not favour the punter any more. The bookmakers are saddled with a point of consumption tax and other charges, which vary from state to state, and punters, big or small, are finding fixed odds betting unprofitable.

I can see where he is coming from but I suspect there is more to the reasoning than that. The clue is that Cormick finds that any future wagering Dr Nick does in Australian may only involve tote pools.

That has little logic as the takeout by the tote is far greater than any new taxes applied to corporate bookies (perhaps 16% v 7%). However any deals are fiddled, the bookies still have large leeways to permit them offering competitive pricing.

More likely is that there are now so many bookies stirring the pot that it is harder for any of them to turn a profit. The pie is sliced too many ways. Hence all the takeovers and mergers seen in recent years (Packer, Tripp, etc).

At the core is the ease and cheapness of entry to the business under lax NT regulations. Unlike the totes, the bookies themselves set the rules, limiting or denying bets and cancelling winning accounts.

Greyhounds do worse than others because its tote pools are so small in the first place. But more power to those jurisdictions pushing for a combined national betting pool. It wont solve all the problems but it will help.

David,

The short answer is not really. Most corporates are "domiciled" in the NT where a kindly government charges them very little. In round terms, as verified by the Productivity Commission, the corporates have total costs of the order of 6% of the betting dollar whereas the TAB deducts about 17% - shared between government tax, racing codes, internal costs and shareholders (eventually).

The corporates have then negotiated commission rates with each code and state racing administration to allow them to use copyrighted field lists. That may be one or both of a fee on the bookie's surplus or a fee based on a percent of turnover, say around 1.5%. This does not apply to TABs, which are considered to be paying it in a different way.

More recently, the state governments realised the corporates were getting away with too much and introduced a tax (a Point of Consumption tax of 8% to 15%) on their race to race surpluses (never on turnover). This is not a huge figure in the end but it is an extra cost.

In parallel, the corporates have dived in to sponsor racetracks and individual races, using funds drawn out of the big differences between their costs and the TAB's. Of course, the TABs do some of that as well but it is hard to know exactly how much each invests.

The other side of the coin is that TAB payouts are fixed and legislated (except F/O) whereas corporate payouts may depend on their marketing offers and their internal rules. It is reasonable to expect that these benefit the bookie in the end. Frequent dissention is normal.

At the moment, the corporates as a group are doing OK because their business model is based wholly on electronic access (phone and internet) whereas a major source of turnover for TABs has disappeared as Pubs and Clubs have shut down. Hence the corporate's market share is rising even further than it was previously.

A barrier to corporate profits is that the corporates' share (say 50% to 60%) is split between several operators - hence the numerous mergers and failures over recent years. What used to be lucrative may well be less so today - hard to know.

All the hoo-haa you read in greyhound Annual Reports about how marvellous the corporates are for greyhounds is a function of two things in the main - (a) the progressive movement of business from TABs to corporates, albeit at lower commission rates and (b) the absence of incentive to use TABs because of the small pools.

Possibly a third underlying influence would be the rapidly increasing use of smartphones in the community. A fourth would be the progressively increasing proportion betting by mugs, as opposed to knowledgeable punters - that's been a long term trend.

For the greyhound code, a TAB dollar is worth more than a corporate dollar in our accounts but there are fewer and fewer of them. The now-merged TABCORP/Ubet company will help that a bit but bigger gains will come only when the states agree to create a national pool. Obviously, that will not gear up before coronavirus restrictions end.

Meantime, sports betting is doing really well - much better than greyhounds.

It is impossible to fact check as it involves info from all states/codes/corporates. And much corporate info lies overseas anyway. Good luck with that.

TAB license agreement expires August 2024.

Entirely true your statements Ray but let's not forget that TABCorp did indeed try buttering their bread on both sides and having it both ways with their now failed Luxbet venture.

It's not that they didn't understand the tax and competitive benefits of opening up an online arm in the NT, it's just that they had an inferior product and it was wound up consequently. The launch was poorly timed as this was prior to Sportingbet plc acquiring Centrebet, BetEasy/Crownbet/WilliamHill merger, and a myriad of other acquisitions and mergers. William Hill? (lol)

Consolidation in online wagering continues much in the same way as TAH (TabCorp Australia Holdings Ltd) acquired Ubet (Tatts) assets in Qld/SA retail and online sectors.

It did make some sense for TabCorp to offer an online product to take money away from Tatts based states. Once the merger happened, why cannibalise themselves? Once the assets in competing states were owned by TABCorp, it was time to exit that market. Time will tell whether that was a smart move or not...

(disclosure: I hold stock in TAH and enjoy their dividends with full franking credits)

True that Luxbet was purely a device to allow them to compete with the turbulent but growing influence of the corporate bookie group.

It never really worked but then neither did many of the corporate group - hence all the mergers and acquisitions. With open and easy entry, all sorts tried their luck with the result that the pie got cut into too many slices.

The gallops business (plus Keno and lotteries) is enough to keep them going but unfortunately the big loser has been greyhounds which had mediocre pools to start with. Closure of retail outlets has made the TABCORP position even worse and so the corporates are now enjoying an even bigger market share - now way past 50%, it seems.

At heart, greyhounds now lack a reliable and potentially useful betting product from anyone. It will get worse before it gets better and more juice can be extracted from the TABCORP/Ubet combo. but only after COVID-19 goes away.

Meanwhile, greyhounds should be pushing hard for a national betting pool (note WA is still up for grabs) and heavier regulation of the corporates (mainly their rules). Remember that all Fixed Odds betting (including TABCORP's) is basically unregulated, meaning that consumer rip-offs are untouchable.

That goes against the grain for me but it seems there is no other alternative that can work well in the Australian market. With the NT as it is we have a tiger by the tail.

David,

I do not follow the red hots closely but I can note that turnover has been falling for years now and integrity is forever under question. They are running 4th behind gallops/sports/dogs.

Interesting on Betfair. I understand the vast majority of its custom is not from Australia but most of us would have no idea as it does not publish overall turnover figures and you would have to make estimates based on what you can add up from race to race.

I have no clue about "one bookmaking company" but a figure of $70k to $100k of turnover for a single Tabtrack race is not believable. Were that so (and there are 7 or 8 prominent corporate bookmakers) the returns to state authorities would be through the roof. This contrasts sharply with what all the state bosses are telling us, including GRNSW which is responsible for Bulli commission. So somebody is telling lies.

Those figures are also inconsistent with betting at Bulli from all sources over the last 50 years.

However, if you are correct it means NSW prize money should be doubled smartly, staff should be re-hired and covid-19 worries cast aside.

NB: Betfair and "one bookmaking company" are normally not the same thing. A bit confusing!

Equally problematic is the claim that the dogs out-pulled the gallops. Thursday contains several popular dog meetings but not a great deal for the gallops code but even so ......???

To the other gentleman who uses your claims to rubbish what I have been saying, I have some shares in the Sydney Harbour Bridge which I would like to get rid of to improve my liquidity. A PM would help.

Barry,

Barry,

We are saying much the same thing about Betfair one race at a time, not overall turnover. This is an international group so it is hard to be sure what commission accrues where and how big it is. Does a bet matched in London provide the same benefit as one placed in Sydney? Betfair has obligations in both countries but I am not sure what kind of deals it has in place.

In total, the rewards to state admins are all on the decline as business migrates from the tote to digital operators such as Betfair and corporate bookies or even Tabcorp F/O - but not sufficiently enough to balance the books. See the recent statement in SA Kennel Capers about the failure of many punters to shift over from one to the other and the consequent reduction of salaries, hours and prize money. NSW and Vic have said much the same thing.

It all needs auditing, including your sons claims.