Tabcorp + Tatts/Ubet = a non starter for now
NOT for the first time, Tabcorp and Tatts/Ubet have been talking about a merger, thereby giving the country a single tote-TAB operator. It was on then off-again as share fluctuations messed up the arithmetic done by each party. Tatts, which is the bigger company, now wants preferred treatment due to its higher profitability, mostly due to the lottery business which makes up over 60% of its activity.
Unfortunately, all the finance commentators have come to one false conclusion. Any merger would have no immediate effect on horse and greyhound tote prices or their operations. That's because each state's tote business is licensed as a long term monopoly by individual state governments under strict rules as to deductions etc. Six states and three territories would have to re-negotiate contracts before any change could happen. WA is also complicated by an imminent privatisation of its government-owned tote, while Norfolk Island is losing its independent status.
Alternatively, a takeover of just Ubet's wagering operations by Tabcorp would offer a much cleaner opportunity to achieve national wagering consistency – but still at the whim of each state government.
Previous merger attempts were thwarted by the ACCC which was concerned at the resultant reduction in competition (no longer such a problem) and a NSW/Victoria pool merger by Tabcorp was denied by the NSW Minister for reasons which never made sense.
Consequently, customers should relax for the moment.
All this is occurring as wagering changes are still taking place. Both Tabcorp and Ubet are losing tote volume – by 2.1% and 1.5% respectively in 2014/15 – as punters shift to fixed odds and the mechanical monster Trackside, a pretend poker machine. They are also moving across to digital transactions which now account for around one quarter of all betting. Still, both companies claim useful growth in the September quarter.
These moves are of mixed value to racing codes as they get smaller cuts of Fixed Odds bets, compared to the standard tote, where commission is government-controlled.
Having said that, should a merger or takeover occur, greyhound racing could benefit if all those governments agree to the creation of a national betting pool, irrespective of who owns it. That would immediately generate bigger and more attractive pools for greyhound customers.
Please get the story straight
While we welcome all sorts of readers' comment for these pages, providing they are polite and preferably factual, the reverse is sometimes the case.
It is also frequently annoying for me to be “verballed” as someone tries to add weight to their own opinions by distorting mine. I can only wish they would read the column more carefully next time they have a go. Normally I let these go through to the keeper but at the moment we have some really important matters at hand so some corrections are necessary.
In particular, whoever “Dezzey” is, he keeps getting it wrong. Here are my comments on some of his recent posts.
Dezzey says I want to “wait until all appropriate data-collection measures are in place” before assessing the breeding situation. No, this is misleading. I have not said that at all. Breeding and “wastage” numbers are massively important to the current debate on alleged “overbreeding”, according to all three state inquiries, yet those being bandied around are plainly wrong. However, a strong and prompt investigation should be able to obtain more reasonable estimates providing, of course, that it is done nationally. Looking at a single state is a waste of time.
More accurate data can be obtained only when all administrations put reliable systems in place, and not before. That process has already started but it has a long way to go.
“You don't like how the Commission is run, don't rate the evidence, and stop short of accusing them and the Government appointed SC's of bias”. True, true, and I am not sure what he is saying. The Commission is using highly aggressive tactics in its questioning but everything to date is biased towards what its counsel, in his opening address, called a “shut down” of the industry. Further, it is using faulty data to press the case. On top of that, the Racing Minister briefed the Commission to assess the worth of “the continuation of the industry”, which is very suggestive language. A proper investigation would first establish all the facts and only then would it decide on what course of action to recommend – as would a judge in a normal court.
Dezzey posed the possibility that “if the Government has crunched the numbers” then certain things might happen. Wrong, that is not possible. The Commission, anti-racing organisations, Greyhounds Australasia and the media are all using faulty numbers (GA even admitting the problem) so, by definition, government does not have the numbers to do any crunching.
Apparently we agree when you call on me to “lobby harder for safer track-designs and a real national Governing body”. That's fine but it ignores the elephant in the room. You see, I have been doing exactly that for 20 years now – to Racing Ministers, state authorities, GA, and clubs – in great detail and with lots of supporting evidence, but all to no avail. Suggestions and proposals have been completely ignored. In fact, no-one has even bothered to respond, much less discuss the subject. Worse, authorities have a worrying habit of repeating past errors. And clubs get very touchy when you point out problems with their “baby”.
That scene suggests either that they don't care or just don't know what to do, and would prefer I went away – which may be why another reader claimed I was regarded as a “serial pest”. Pest perhaps, but I have been shown invariably to be correct – as emphasised by recent support for my complaints about bend starts. That being the case, the obvious corollary is that the people I am writing to are not interested in improving standards, or avoiding causes of injury. Why not?
Let me take that one step further. On the matter of creating “safer track designs” I suggest the Commission is simply not competent to take on that task. It has neither the expertise nor the necessary background information. Nor does any existing person or group in this country. No-one has bothered to do the investigation and analysis of the many factors involved and then put them all together to come up with substantive design parameters. Current practice could be equated to engineers designing bridges without knowing how strong steel girders should be.
Finally, you protested that mentioning “child abuse is way out of proportion”, but took this out of context. The item addressed only the conduct of Commissions – Royal or otherwise – and quoted statements from the Commissioner of the NSW ICAC to the effect that normal court procedures did not apply to it – hence they were able to adopt an attack-dog approach which would not otherwise be available. This, of course, is why some findings of Commissions cannot be referred to law enforcement authorities. It is also why legal cases have not been mounted against live baiting offenders – i.e. the evidence was almost certainly obtained illegally (by trespass).
That alternative – bung rules – is not acceptable to Australian society. To digress, it is also a factor in the lengthy and sustained criticism of ICAC processes now hitting the headlines.
Live baiting is a disgraceful, historically-based but illegal practice which we all hope has now been eliminated for all practical purposes. The future should involve the discovery of why it has been allowed to occur, followed by the creation of management systems which stop anything similar ever happening again. That is, or should be, the real objective for the Special Commission and the Racing Minister.
Bruce, I tried to include a photo of the ‘Dunk Grey Cycling Velodrome’ in Sydney, but the file was too big. I did that to demonstrate the need to bank the turns so that the cyclists can stay upright, without it they would just fall over. The velodrome is only a 250 meter circuit, whereas the average greyhound track is around 420 meters circumference, so the banking would not have to be as severe. Without it they would simply smash wrists and break hocks which is what is happening. Anyone with half an interest should go and have a look… Read more »
Any punter who cannot see the value of betting fixed odds has got more money than sense. You’re betting against yourself….
Bruce, I tried to include a photo of the ‘Dunk Grey Cycling Velodrome’ in Sydney, but the file was too big. I did that to demonstrate the need to bank the turns so that the cyclists can stay upright, without it they would just fall over. The velodrome is only a 250 meter circuit, whereas the average greyhound track is around 420 meters circumference, so the banking would not have to be as severe. Without it they would simply smash wrists and break hocks which is what is happening. Anyone with half an interest should go and have a look… Read more »
Any punter who cannot see the value of betting fixed odds has got more money than sense. You’re betting against yourself….