Move On. Nothing To See Here!

Not much there isn’t!

It was wonderful to hear the Queensland Racing Minister and Racing Queensland boss (Dickson and Dixon resp) tell assembled throngs at the annual award night that everything was looking fine and dandy, including the start of work on the new track at Logan, southwest of Brisbane, on May 19. That’s this year, not next. No further details are available yet but no doubt someone is there with a shovel or two.

The usual noisy objectors have been around, claiming greyhound racing is a dastardly affair and that the $12 million investment should have gone to hospitals and schools. That’s odd logic because that’s precisely where the gambling taxes go anyway. Demonstrators at the parliamentary Inquiry in Sydney also got their facts wrong in the same way.

Hovering at the moment is a decision on who will end up with the Queensland tote license, currently in the care of Tattsbet. The government and RQ have been looking for “innovative” submissions, whatever that means, yet the Minister seems to have missed the point that the tote (whoever runs it) has been losing traction for many years now. That may be partly due to its smaller size, partly due to the way it is run, but more importantly it is due to the fact that customers are fewer and/or are going elsewhere – ie to corporate bookies or to interstate and overseas operators.

The Minister’s joyful forecasts has also failed to take into account the continuing decline in animal numbers and nominations in all codes and owners’ preferences to move good racers elsewhere in search of better prize money and opportunities. Albion Park’s major weekly Thursday meeting now routinely includes one, two or three Maidens or Novice races and, last week, two 395m fillers to make up the numbers.

With the possible exception of NSW, racing authorities have all been putting on a bright face and trumpeting about what they term great results over recent years. GRNSW has at least pointed out it will be running out of cash before long as it is unable to negotiate a better split of TAB commissions, and may then have to rationalise operations.

None of these hopes have much substance behind them as progress has so far been funded by extra races and mug gamblers prepared to have a crack at anything. You will not hear much publicity about that, though. Interestingly, it all bears a great resemblance to the picture of the Australian economy, or at least the national budget.

Peter Van Onselen, a WA University professor writing in The Australian (June 14), surmises that the Commonwealth government is getting beaten about the head “because the community is yet to embrace the seriousness of the fiscal challenge in the years ahead” – that is, people will not accept we have been spending more than we can afford.

He agrees with the Abbott/Hockey objectives although not always the methods they have chosen to get there. To bring matters to a head, he claims that voters first need to realise the extent of the problem. “Three proofs are needed: (that) Australia has a fiscal problem, the government’s approach is flawed, and there is a better way”.

Many folk might not agree that greyhound racing has such a threefold problem. Yet, in real terms, industry incomes are flat or in decline. Field quality is getting poorer by the day as more and more races are being screwed out of a dog population that has not changed much for several years. And the betting market lacks enough real competition to generate attractive prices – largely due to the cartel nature of the system’s members.

In the last case, note that Fixed Odds operators all offer much the same price structure, more or less, while tote pricing sets the base for the former products (or perhaps vice versa).

An interesting pointer came from Ross Gittins in the Sydney Morning Herald (May 31) when he examined the so-called competition now being promoted between universities following the latest series of budget changes. He suggests there is no genuine competition there as “we have a relatively small number of large and larger organisations, selling differentiated products of uncertain quality. We have oligopoly rather than perfect competition”.

Consequently, they “usually try to avoid competing on price rather than marketing. They have a degree of pricing power and their competition takes the form of “rivalry” – focusing on the behaviour of competitors rather than the needs of the public”.

Is that any different from what we are experiencing amongst betting operators? It seems not, thereby helping to explain why the overall market is static or falling, and has been for 20 years now.

At the core, the underlying reason for that situation is that state governments control the major operators directly as well as approving the rules under which the others work. But when have governments been good at running commercial enterprises? When have they updated or brought about reforms? Not in recent memory.

Indeed, the reverse is the case. The only significant change to the racing system over the last few decades has been arrival of corporate bookmakers, starting in the 1990s. Yet, almost to a man, state governments and racing authorities opposed them violently, giving way only when the Northern Territory and Tasmania broke ranks after they got offers too good to refuse. Although customers had always welcomed the newcomers, their views were coincidental and had little impact on the big decisions.

Hence the artificiality of the wagering system as we know it. It’s set by power brokers – in an oligopoly – rather than by customer demand. And it is expensive to use, which is why we have seen the increase in mug gamblers as a proportion of the betting public. Greed wins over rationality. Genuine punters have either insisted on big discounts or given the game away.

So there is nothing new about racing trends; it’s just a matter of whether we recognise them and take corrective action.