A Valuable Lesson From Canberra

As the country goes, so might racing. The current national debt crisis demands all sorts of cuts to and changes to government programs, according to the government’s Commission of Audit. It summarises the need in this way:

“It will require an integrated approach with hard-headed decisions on spending priorities, a preparedness to embark on meaningful tax reform, an ambitious approach to recasting commonwealth-state relations and, above all, a concerted reform agenda to support productivity and growth”. (Commission chairman Tony Shepherd in The Australian, 2 May)

That immediately brings to mind a great many things happening in the racing industry. For instance, take the subsidies being handed out to mostly well-off breeders and mediocre distance dogs – are they producing anything worthwhile? The industry’s national forum, , not only has no power but fails to communicate much at all and deals only with a very limited number of subjects. By default, individual states rule in different ways to each other and therefore at a greater total cost to the industry.

As for reform, a clear need exists to rein in a rampant betting sector which is dedicated solely to making excessive profits from mug gamblers while ignoring the impact of its reduced level of service to the industry. There is nothing wrong with seeking bigger profits but not if you risk killing the goose that laid the golden egg. Or even growing more eggs. That makes no sense for anybody, including the betting houses.

Totes are expensive enough to start with as their deductions far exceed those for poker machines and casinos with which they compete and which people understand much better than they do racing. But now around a quarter of betting turnover (Fixed Odds) is completely out of the control of governments, given current , with the result that betting operators like Tabcorp can make up their own as they go along.

Those same Fixed Odds books are not only over-priced but are also subject to the whim of the operator as to whether it accepts the bet or not. It acts not like a tote or a bookmaker but more like a shifty SP bookie’s agent on a street corner.

Consider what the current greyhound climate involves:

  • Volatile betting prospects in a flat or declining 20 year background. Tabcorp’s tote turnover – the main game – is doing poorly while Fixed Odds betting is rising but at a greater cost to the consumer. The number of online operators is rising almost by the month.
  • Gamblers who do not know what they are doing. Favourites are over-bet everywhere. For example, in the last two months at major tracks 42% of odds-on favourites lost and 58% won. Since some of the winners were priced down to $1.20 or so that means the gamblers lost significantly over time.
  • Overcrowding of racing calendars continues unabated, meaning pools are now much smaller and frequently unusable, thereby discouraging serious punters. Product supply has long exceeded customer demand.
  • Breeding numbers have been declining over the last decade (as has thoroughbred ). Lower standard dogs are being pushed into extra TAB races.
  • State imbalances are increasing as the TattsBet states continue to lose ground. (And, in the last quarter, for all codes Tabcorp NSW tote figures improved but those in declined. That’s odd).

All this is part of a steady process that will continue on its present course, short of significant reform. In effect, what the developments of the last 20 years have done is to devolve control of the industry to betting houses and so pander to the interests of their shareholders (who are doing very well).

Racing, particularly greyhound racing, does have some options.

First, with due notice, it can tell the totes that it no longer wants to supply races willy nilly to the betting sector, rather only when it can provide a decent product for future customers. That would require a national consensus, of course.

Second, it can use its initiative and imagination and find other outlets for the low class racers that are now clogging up the system. Empty boxes can be replaced by competition for spots, as occurs in all other walks of life.

Third, it can improve that system radically by creating fewer but better races, partly by culling bad stock and partly by building better racetracks to replace the disruptive shambles that now persists

Fourth, it can get off its behind and explain the industry properly to a public that is ignorant of the greyhound’s unique history and capabilities.

Fifth, it can then start seeking new high value customers to utilise an interesting and fascinating new product, expertly put together and supported by a wide range of professional services, all making a major contribution to the economy and the wider community.

None of that will happen overnight, but it can be done. Certainly not by the existing industry structure but by modernised and well co-ordinated national organisations and programs.

The vital first steps are to reform the almost irrelevant Greyhounds Australasia set-up and give it some teeth, and then to convince all the state Racing Ministers of the need for that modernisation, especially by creating a national betting pool. It goes without saying that state and national administrations need big changes in order to bring their governance structures into the 21st century. The industry has to be managed, not just administered.

As the Commission of Audit warned, “There are too many government bodies in . This leads to duplication and overlap, unnecessary complexity, a lack of accountability, the potential for uncoordinated advice and avoidable costs. There is no central repository of information on these bodies”. So, too, with racing.

Failure to act does not bear thinking about. If you don’t do something about the national debt, the outcome is that a bigger interest bill forces it to keep rising until you eventually go bankrupt. If greyhound racing morphs into nothing more than a succession of four-legged poker machines, what then happens to the breed?

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