What a great time for greyhound racing to buy back the farm – and a way to greater prosperity. Yes, it can be done.
The Victorian government will soon go through the charade of calling for tenders for the right to run the state’s wagering system after 2024 when Tabcorp’s license expires. In 2018/19 its market was split roughly half and half between retail services (betting shops) and digital services (phone and internet), and attracted total turnover of $5.3b.
I say that somewhat playfully because the experience with tenders in other states shows that the incumbent is very difficult to beat due to its momentum and possession of all the signs it has put up in clubs, pubs and leased or owned shops in the main street. However, there is always the potential to do deals which leave one party or the other in a better position. Stuff like discounts to big punters (rebates) might also be addressed (see David Walsh & Co v Unibet and the Tasmanian government, where what helped the big guys disadvantaged the majority). Additionally, there is a chance someone new will own Tabcorp before long.
Today’s structure had its source in the bowels of governments when Treasurers who were selling off state TABs gave the successful bidders exclusive rights for lengthy periods and simultaneously made life harder for bookmakers and others trying to grow their business (which some did, but in the NT, not at home). The selling price was therefore higher than an option which offered wider competition but it did help the government’s short term balance sheet. In a real world that would all be illegal but not when government says it’s not.
Of course, the passage of time and technology soon led to innovative approaches which bypassed the rules. Betting exchanges (Betfair), Northern Territory online bookies and TV pictures did not take long to find holes in the system. Tabcorp, even after buying up Unitab, Sky, radio stations and anything else it could think of; is now handling only half the racing business – down from 80% or so in the old days – while racing’s share of the overall gambling market has plummeted from 50% to barely 10% now. That suggests a lack of imagination.
The Victorian government is now canvassing some apparently juicy inclusions, like multiple licenses, “support for innovation and growth”, “reaching new customers” or “any (new) ideas”. The license period may also be negotiated – 12 years to 30 years has been mentioned.
But what about Tabcorp itself? How is it doing? Not so well.
COVID19 did boost online betting business but penalised Tabcorp’s face to face dominance. So it’s vulnerable.
Potential buyers are lurking in the wings, many of them keen to get hold of the profitable (ex-Tatts) lottery business and set it up in a separate company. Tabcorp is looking for a new chairman and a new managing director. It’s burdened with ridiculous products like the highly unprofitable Duet which serves only to rob the Quinella pool and it can’t resist fooling around with confusing Quinella and Trifecta options and relying overall on patronage from mugs with little idea of what they are on about.
No wonder the corporates are reeling them in hand over foot as their own market share soars upwards. Certainly, for greyhound racing Tabcorp is a waste of space as Tote pools continue to decline to near unusable levels and Fixed Odds bets are subject to minute checking before being approved, rejected or cut back.
But is that a problem or an opportunity? An obvious answer to greyhound’s future is for the code to get its act together, join up with one or other of the bidders and buy into an opportunity to lift the Tote performance and simultaneously give greyhounds a decent share of treatment offered by SKY and avoid the ivory tower occupants telling the code when to jump and how high.
No more diversions to harness pictures showing horses milling around at the start while greyhound coverage is foreshortened or even deleted. No more accepting less profitable spots in racing programs. No more relegation of good races to SKY2. And harness racing is fading away so they should not be a problem.
Greyhounds and the other two codes once controlled the Tote but unwisely sold out and took the same short term reward as state Treasurers, pocketing a lump of capital in exchange for their rights to control the traffic. It’s now time to reverse the order and buy back some control – long term.
Let’s forget Greyhounds Australasia, which barely knows how to tie its shoelaces, and have the big two states lead the way by forming a separate company to buy shares in a new wagering partnership (with whoever wins the licence), thereby allowing the code to stand up in its own right. This is not just a racing challenge, it’s a business matter so the first thing that new organisation should do is to hire some expert advisors to build a case for more power and financial profitability. Look for a win-win venture for greyhounds?
Fanciful? Perhaps, but the last ten years, and the ten years before that, were never imagined in advance by the racing fraternity and outside influences are promising to do it again in the next decade. A new ball game is in the offing. It’s a great opportunity to fight hard to ensure we maintain or even improve our position in it.
Greyhounds already provide by far the highest number of racing and sporting events, thereby contributing mightily towards the daily efficiency of the racing and sporting marketplace. Our participation makes life easier and more profitable for a host of businesses tied up with racing, not just the betting houses themselves. In this case, it’s the quantity as well as the quality that gives industry members the profitable edge they want. Greyhounds are the reason people keep tuned in for a huge portion of the day and night. Any big investor would understand that role.
It’s high time we insisted on proper recognition and the rewards that go with it.
There is a do-nothing option but we would be crazy to take it. Besides, our powerful new position might force Peter V’landys back to the table to update NSW greyhounds’ unfair share of the TAB commission split. That’s a real bonus. Some innovative management would put a halt to AFL/NRL/tennis/cricket sports betting intrusions into our long held market share. Maybe rug colours could simulate club jumpers (for a price, of course). It would also help Victorian authorities overcome any hassles should voters take the unlikely step of putting the Liberals in power. Oh, the mind boggles at the possibilities.
Is This Really Necessary?
Sad to see a non-operational GRV board member like Greg Miller forced to quit for a silly “offence” like betting on an interstate race. I have to repeat an opinion I expressed a few years ago when GRV staff were lumbered for betting on local races. No problem with that but why stop them betting on interstate races? I would be more inclined to make it compulsory so that everyone gets a decent idea of what betting is all about. Don’t overreact and throw the baby out with the bathwater.