Racing NSW bleeding the racing industry

Straight from the shorse. You choose which end it came out of... Short form summary http://www.hcourt.gov.au/assets/publications/judgment-summaries/2012/hcs12_2012_03_30_Betfair.pdf Long form complete http://www.austlii.edu.au/au/cases/cth/HCA/2012/12.html Short form summary http://www.hcourt.gov.au/assets/publications/judgment-summaries/2012/hcs13_2012_03_30_Sportsbet.pdf Long form complete http://www.austlii.edu.au/au/cases/cth/HCA/2012/13.html Regards, Billious

Ads, The flood is about to break. "BETTING firms Betfair and Sportsbet have lost a High Court challenge against..." The Australian at around 1115 this morning. Put this into google... high court decision 2012 Regards, Billious

Billious: this is what makes the situation farcical. The TAB are the natural push behind the scenes for the turnover tax, and yet what do they contribute to thousands of sports globally they field on each year outside Australia? Nothing. Weren't they screaming when offshore bookies were fielding on racing? My mail is they will be making a comeback, irrespective of what happens today in Canberra. Also ASK TABCORP THIS: With the explosion of FIXED ODDS cannibalising their own tote product, what do they pay back to the racing industry: Turnover on fixed odds betting? NO. They pay on GROSS PROFITS!!!!! Ask P VLANDYS and S NATI. See if they will tell you. So talk about being hypocritical. They push and push and push for a turnover tax, but are only paying on PROFITS on their rapidly growing FIXED ODDS products. Racing is a rort from top to bottom. No wonder it is losing relevance in this day and age.

Hang on a second... If this goes ahead, how long will it be before the NRL, AFL and even Little Athletics puts their hand out for a slice of the punter's money via the bookmakers / TAB for the published 'fields' of participant information on which wagering is conducted? Raises a far broader set of issues other than the vested interest's of the gee gees / red hots / dish lickers. Can anyone enlighten me please. Regards, Billious

Ads, I'm not sure which owners think they sit at the top of the totem pole, but a system that works has to be mutually beneficial to all participants, whether it be punters and owners that put money in and hopefully take it out, or the thousands of people employed within the industry that get paid a wage to keep to keep it going. If RNSW losing the case means racing would continue as it has in the past then I'm all for it. But as you say short term benefits to punters will see the industry on a downward spiral. So what's the point of heading down a path where we know the outcome will be bad? No guarantees that RNSW winning will be the answer to the problems either, to be fair. As far as people deciding to bet instead on the PM's undie colour, perhaps that works for some. Horse racing is a genuine sport that relies solely on gambling profits to survive, which is still the attraction for some people. Playing cards and waiting for multiples of cleopatra are not sports, while cricket is a sport that would probably survive without gambling (outside of India, at least). Good horse racing costs billions of dollars a year in operating costs, without income it's all over. The PM's undies probably came in a $10 three pack from Target, and online gambling etc also costs a fraction of horse racing to operate. If RNSW wins they need to think about what they do with the revenue. Simply handing it all back to owners as prizemoney is probably not the simple answer, although certainly a boost to PM of some group races will help. There's a lot of ifs and buts here, but if RNSW win, at least there is the potential for it to be distributed between both prizemoney pools and bookies to maintain some kind of sustainable balance. Whether RNSW knows how to sensibly manage the money is a different issue. As far as bookies managing of profits goes should they win the case, it's laughable to think that they'd have any profits to pay a percentage of back to RNSW.

Racing is damned if it does, damned if it doesn't in some respects. The fundamental flaw in the whole thing is that the model that funds racing is obsolete, and completely non competitive in this day and age. RNSW winning the court case will attempt to force punters to accept a less competitive product. They do that then punters will gravitate towards other betting options and lets face it, you can bet on what colour underwear our prime minister is wearing today. so there are no shortage of options / competition to racing. But if RNSW don't win, then they are stuffed too as the main funding avenue (TAB's) just cannot compete due to the 16% takeout and will continue to lose market share as the pay-packet blowers in TAB agencies around the place evenutally die out. Ian - do you think the short term injection from a RNSW court win will create the flow that you suggested (More prizemoney = better racing = increased interest = increased turnover)? I doubt very much the increase in turnover from the supposed 'betting racing' will be sufficient to offset the drop from people turning away from race betting given how uncompetitive the environment will be, compared to other betting options. Also, where are we going to produce the better horses to produce the better racing from?

Oh Scott, No wonder my work PC couldn't access your website - you're a professional punter. Possibly worth declaring your interests when trundling out one sided opinions that are targeted at protecting your own source of income. Your profession is probably the reason for a few uninformed (or lack of) replies to some of the comparisons made in the comments above. It's probably worth keeping in mind that the majority of punters and owners enjoy the sport of racing as a hobby, inasmuch as they have jobs in other parts of the functioning world. I guess there are some aspects of the racing industry that people who make a living from gambling just don't get!

As far I can see it the only thing the corps have added to the betting industry is to introduce the disgracefull betting system that are in the UK and Europe. What the Australian betting industry has created now is 5 betting firms controlling 85% of the fixed odds betting turnover and 4 of those firms are controlled and operated by overseas interests, and now that bet365 are about to enter the market place who are the biggest internet bookie on the planet, we will see the complete death of the local bookie. These corps are only interested in profit margins and the only industry that has benefitted from their introduction in the advertising industry. They have all position themselves in the NT where they take advantage of the lowest tax rates in the country, and even worse they have moved the bulk of their operation to the bigger states so the NT doesn't even get the advantage of the employment they supposely create. They have turned the bookmaking industry into a sterile numbers game. If NSW win the court case, yes Betfair will certainly suffer and may have to re-jigg their betting model for NSW racing, but don't think the corps will suffer in any way what soever. Sportsbet made more than 50mill last year and could easily pay the extra as well as the other high profile corp firms. Also let's not get started on Sportsbet / iasbet and centrebets UK betting tactic's of reducing bets to ludicrous small wagers for many punters and do we really feel they hand on any benefits they will receive to the punter, please spare me.

Great article Scott. I'm more concerned with the case against Betfair (as it's my lifeblood) but I hope both are successful. The fact of the matter is I'll be lost to the Australian racing industry if Betfair lose the case, and other States adopt a turnover based tax at a later stage. Do you think it's likely other States will do that, or given that a jurisdiction like Victoria is going ahead in leaps and bounds (and appear to be on good terms with the exchange) the status quo may remain? I could therefore see NSW in a worse position! As you mention earlier, the impact on turnover is helped by having betfair & if they are on their own.... I have heard from one source that Messara isn't anti Betfair and wants to discuss options should NSW win. That information seems to imply Messara wouldn't be going down the legal path and/or turnover tax option IF he was there a lot earlier. Interested in your thoughts.

Scott. Some very relevant points you made in your article and judging by some of the comments, it has galvanised opinion. Racing is a loser on both fronts irrespective of the result: Racing NSW wins: As you say a less competitive product will exist in a climate where there are so many options for the betting dollar. Betfair will have huge trouble in being able to sustain a turnover tax imposition on their product, while corporate bookmakers (whom scandalously cut punters off without betting to minimum requirements) in some areas might lower their interest on fielding, especially on the lesser codes like harness racing. Some that control racing honestly think if you wipe out corps, their betting dollar will simply migrate to the TAB. At 16% take-out it just doesn't cut it anymore. It did in 1980. Not now. As you so eloquently put it, short term gain comes at the expense of long term on life support. Racing will always be around, but as some figures have shown recently, there are some worrying graphs that show overall interest in the sport - even from once a year bettors, is dropping. Racing NSW loses: Corps don't have to pay a cent, the main avenue of funding erodes even further, prizemoney drops leading to owners getting out of the sport, depressing yearling sales and creating a self-fulfilling prophecy of downward spiral in the sport. Again there are short term gains for punters, but in the long term where they gain benefit (if they can get set) will ultimately cost the sport dearly. I can't cop this rabble by owners whom honestly believe they sit on top of the totem pole. I have been an owner of racehorses, and yes copped the losses too, but without punters we have no prizemoney. You waltz through the members enclosure and ask many upstairs quaffing on their champers about whom is most important, and the percentage silly enough to say owners will beggar belief. The long and the short of it is that Racing in general is facing a very tough task in maintaining its relevance in this day and age, and certainly in the future. Find me 25 year old willing to pick up a form guide and actually do form study like 20-30 years ago and invest. Not easy. Gen Y just aren't interested. Most people 40+ grew up with racing as part of day to day life as was the betting that went along with it. The younger generations only enjoy the races for a knees up and to chase the young ladies whom like to drench themselves with alcohol. Racing has sadly neglected the younger generations, sitting up in their ivory towers pontificating. What is the answer? How much room have you got?

Scott, very good article. Agree with your views wholeheartedly. And as for P V'Landys, what a waste of space. How he got that job from his previous debacle in NSW harness racing is beyond me. The lunatics are running the asylum.

Pinning the demise of the hp bookies on v'landys is unfairly harsh. This is a global problem that you will find in all forms of racing post the advent of the online bookie and live racing on tv. Wasn't it V'landys that was at the helm about ten years ago when hp introduced the 10/30 nights that regularly drew crowds of around 8000 to the trots when 1500 would otherwise have been expected? And isn't it v'landys at the helm of racing nsw on eve of a court result that possibly could propel racing in nsw to the forefront in not only this country but the world? Maybe judgement on v'landys should reserved for a few years especially if he wins this landmark case.

The corp bookmaking scene has taken the art of a bookmaker straight to the greedy heights of the English/Irish system. five bookmakers now control over 85% of the fixed odds betting in this country and have turned the betting industry into a sterile numbers game. Don't by any means think they are giving more back to the racing industry, the only industry that has benefited from them is the advertising industry. We have created a betting industry that other than the TABs is controlled and run by overseas interests that are only concerned by profit margins. Four of the 5 big betting firms are overseas companies and now with the entry of of bet365 the biggest Internet bookie in the world we have just about totally killed off the local bookie. Also these bookies have all located themselves in the NT were of course has the lowest tax rate in the country. If the court ruling comes down in favor of the NSW tab the only major change will be that Betfair will have to seriously re-jigg there betting model, but the likes of the big corps can easily handle the extra tax, after all Sportsbet made around 50-60 mill last year and Sportingbet about the same. And let's not get started on the way the corps are treating a lot of punters these days with the totally unfair betting practices they have introduce from the UK. The likes of Sportsbet / IASbet / Centrebet total deserve to get it in the neck for the direction they have taken the industry in the last few years, they are a disgrace to the art of bookmaking.

Also Scott, regarding the comments on prizemoney, races like the Slipper and BMW are exceptions, correct me if I'm wrong but I suspect the likes of Emirates, AAMI and BMW shell out large sums specifically for naming rights to these few marquee races. I'm sure you've seen where Sydney trainers will send a horse to Melbourne (or vice-versa) just for the sake of the extra $30k step from standard Saturday metrop prizemoney to Listed prizemoney.

Scott, What is your opinion on the amount of racing that takes place in NSW? Taking a cliched "market share" position, it's probably seen as a good thing to have more meetings. This is a similar situation faced in all sporting codes. Look at the ODI's in cricket, no one watches them, they are on the way out as there is just too much cricket on, and it's all in the name of market share. A reduction in the number of race meetings would increase interest in those remaining while also reducing the cost to operate the sport via contractions to the breeding and training aspects.

Demand for minerals is what grew the mining industry in spite of a royalty based turnover tax. Demand for a better racing product will grow the gambling industry in spite of the potential turnover tax. I have probably left little doubt as to where I stand with this issue :)