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If every punter in New South Wales had a bet from their heart on the outcome of this week’s landmark court case in Sydney, when leading corporate bookie Sportsbet and exchange Betfair take on Racing NSW, then surely it would be a one horse race.
The most important participants in the racing industry are the punters, as they fuel the clubs who provide the prize money for owners, and they will be cheering for a positive verdict for Sportsbet and Betfair as they strive to provide a better and more competitive product for punters.
The punters of NSW do not even get a mention when Racing NSW CEO Peter V’Landys discusses his concerns about providing for participants.
Daily Telegraph racing editor Ray Thomas recently asked V’Landys: “What do you mean by not providing an
adequate return to participants?”
V’Landys replied: “The racehorse owners in NSW subsidise the industry to the tune of $100 million per annum that’s the difference between their training bills and prizemoney they receive. That loss doesn’t even include the initial cost of buying the horse.
“We need to minimise the gap between owners’ costs and prizemoney. Because owners are losing as a group means that income levels of other participants in the industry remain low ie returns to trainers, strappers etc. Eventually it may get to a point when owners decide not to invest any more so we must close that gap and make investing in racing more attractive”
So there we have a direct quote from the man in charge of Racing NSW clearly stating that he believes that the owners “subsidise the industry”. Maybe he should look at the industry in Hong Kong, who like Victoria, have gone straight past NSW and are thriving, thanks to the punters dollar.
It is simple, give the punters a fair and competitive model and they will invest and the industry benefits.
While Racing NSW continue to campaign for the wealthy breeders and owners of the industry and actively endeavor to maintain an uncompetitive product as a monopoly for their punters, the state will never bridge the gap on Victoria as their strategic priorities are out of order.
Racing NSW are “in bed” with wagering giant Tabcorp, who are trying to take us back to the dark ages where the “jolly green giant” enjoyed a monopoly and could dictate to punters with rude and unfair take out commissions between 15% to 25%, and 10 cent dividend round downs.
Racing NSW care not that 98% of punters lose under the Tabcorp model.
Peter V’Landys has stuck to his guns and has demanded that all corporate bookies and exchanges pay a 1.5% race fields tax based on betting turnover. The bookies claim that this model is not viable and have agreed already with Racing Victoria to pay a 10% fee based of gross profit.
We can excuse a single individual for not understanding how a bookmaking business is funded and what it takes to survive, but V’Landys dogmatic stance has not been challenged by his chairman Alan Brown or any of his board members who include former Tabcorp Board Member Ken Brown and Kim Harding, the former GM of Sky Channel, part owned by Tabcorp.
Maybe the punters have had a bet after all, do they know something?
Corporate bookie Centrebet are not involved directly against Racing NSW, but their shares have surged from 1.13 last December to today’s 1.50, while Tabcorp have remained static around the 7.22 mark for the same period indicating a clear market preference.
This court case is a very expensive exercise for Racing NSW if they are unsuccessful as the industry is struggling under V’landy’s management and the millions required for court costs are valuable funding that could have been invested into the industry.
V’landys is also sitting on $50 million of corporate bookies money that he will have to return plus interest that has been paid pending the court decision.
If the share market has got it wrong and Racing NSW is successful, then the corporate bookies will likely be forced to take their business and hundreds of jobs off shore.
The Victorian model, where the corporate bookies are taxed on gross profit, has proven a winning formula as the state continues to thrive and increase their lead as the premier racing state.
The NSW racing Minister Kev Greene, a prohibitive 1.18 to lose his job at the next election, promised plenty when he was appointed but he has sat back and watched the racing industry in his patch continue to decay under a dinosaur administration.
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