HALF yearly results for Tabcorp and Tatts (Ubet) have been overwhelmed by disappointing performances in the High Court where both were disputing actions by the Victorian government in respect to poker machine rights (which were lost to pubs and clubs). Tabcorp had hoped to get compensation but did not, while Tatts had to give back compensation already paid to it, each amounting to more than half a million dollars.
Neither event affects racing directly but financial observers are predicting that Tatts slightly weakened share price will prompt renewed thought about a merger of the two betting giants.
Meantime, the trends continue remorselessly. Ubet retail sales declined 1.6% (down 1.8% in the previous period) but overall turnover rose 3.0% (minus 0.9% in FY15) mostly due to improved fixed odds business (up 25.2%). Tabcorp was much the same with tote revenues down 3.7% but a 19.6% rise in fixed odds betting. Digital access is also becoming more common for both companies.
So both came out with reasonable racing income, which is more than you can say about the squeeze on racing authorities which get smaller commissions from fixed odds than from the tote. Similarly, fixed odds customers are contributing nicely as they pay a higher price for their bets, compared with the tote. Fixed odds pricing is not state-controlled while the tote deductions are.
Meantime, Tatts/Ubet has had its NT licence extended for another 20 years.
Should the merger talks be re-started a major benefit for racing would be that the likelihood of a national betting pool would have some real legs. That would provide a huge boost to greyhound racing and its small pools, particularly when relegated to SKY2.
Don’t run up stairs and don’t take odds-on – Ken Howard
Remarkable. Off probably the most disruptive start in the country – The Meadows 600m – three dogs went out at odds-on in Wednesday’s “Provincial” standard meeting – at $1.30, $1.90 and $1.60. All lost.
Two of these were maidens and the other a novice grade 7, making it even more difficult to understand my fellow punters’ approach. The last thing a badly located start and mediocre form encourage is a short priced favourite, let alone odds-on.
On the same day, it was a little more understandable that Mighty Sprite was backed in to $1.10 over 311m at Cranbourne. Sadly, its jump was ordinary and it was never better than 4th. Still, there was some excuse for the price this time as the dog had won its last six in a row and 22 of its last 26 starts. But it still lost. It happens.
Too much politics
We need a final word about the worth of the NSW Racing Minister’s “help” for the industry. Readers have pointed out the anomaly of the disposal of the agreed tax relief – via a reduction of NSW taxes to Victorian levels over five years – where the Minister is not going to distribute it directly to the codes but will hang on to it himself until suitable proposals are put to him from the three codes.
1. This is legal blackmail. The cash belongs to the codes as it is contributed by their respective customers. Any commission should be passed on directly to the code. The Minister is supposed to operate at arm’s length from the industry, not meddle with it.
2. In working out how to break up the total amount, the Minister decided to use a split developed by consultants IER – hence greyhounds will be credited with only 10% of the total, or less than the 13% under the 15-year old agreement or under the current performance level of around 20%. The IER report – as it clearly indicates – was not an economic study but simply an accounting exercise to determine the statewide investment attributable to each code. As stables are bigger and more expensive than dog kennels they naturally added up to a bigger figure. Yet the facts show that greyhound racing is more efficient as it produces a relatively higher amount of betting turnover (and taxes) than the larger code. Everyone gets more bang for their buck. That would necessarily have been the finding of a true economic evaluation.
3. The Minister’s announcement was quickly followed by a media release from the interim CEO of GRNSW fully supporting the new policy. Not only was that incorrect from a business viewpoint but it bypasses the fiduciary obligation of GRNSW chiefs to press for better and fairer treatment of the code. Indeed, had the sacked board not done that it would rightly have been castigated for ignoring its duty. (It also contrasts with the Our Fair Share campaign from a previous board).
There was always a hint, but never a promise, that the reduced tax burden might be used to compensate for the nonsensical position the code finds itself in as a result of the lopsided 99-year commission sharing agreement.
But not only did that not happen, the Minister rubbed salt into the wound by further penalising the code. What a nasty effort! It’s enough to ask the citizens of Dubbo to vote him out of office.