Out Of The Frying Pan, Into …. Where?
Australian wagering has moved on to yet another stage following Racing NSW' negotiations with online bookmakers and others to ensure they take all reasonable bets. Or so we are assured.
CEO Peter V'Landys has announced the terms of a new deal requiring the online bookies to accept a minimum bet to lose $2,000 on city gallops, or $1,000 on country races, from September 1, 2014. An operator turning over less than $5 million can halve those figures. It applies to Fixed Odds bets and apparently will bind Tabcorp as well.
Under the new agreement bookies will not be able to cancel accounts for successful punters unless there is an integrity issue involved (which introduces a disputable area right away).
Punters who feel hard done by can appeal to Racing NSW, much as occurs with traditional oncourse bookies.
We will await announcements by other jurisdictions and other codes. Racing Victoria has already said it will be watching with interest to see what happens.
The big question is what will happen when the crunch comes if the Darwin bookies are found to be in breach of the agreement.
In the matter of racefield fees Racing NSW theoretically had some leverage in that it could deny access to the primary information – ie a list of runners – using copyright legislation. That was never really tested. From the beginning, the bookies had always agreed to pay a fee and, in fact had appealed to the NSW Racing Minister to allow that to happen. At the time, Racing NSW (and others) did not want a bar of them at any cost. It tried all sorts of avenues to prevent them from starting up, including an appeal to the Commonwealth to declare it illegal. That was denied.
The subsequent High Court argument was never about paying fees, only about how it was calculated. Racing NSW won there, too, as it should. After all, it is the principal and bookies are simply agents or service providers.
The irony of all these goings-on is that racing authorities are now rubbing their hands with glee as the money flows in. Enemies are now best of friends and a once moribund wagering sector was revitalised.
But only for a time. As online bookies gained ground, tote volumes fell away, suggesting amongst other things that the market had been fully exploited under the existing conditions, which included substantial increases in the number of races on offer and the confusion caused by clashing races. In turn, that meant that cracks were appearing in the foundations, particularly for smaller meetings (like greyhound meetings), and the reliability of the tote prices came under pressure. Yet they have been, and still will be, the guiding force for all wagering. The recent boost to Fixed Odds betting is still based on likely tote prices, erratic or not.
So the online bookies have actually had a mixed influence, varying from good to now questionable.
The pity of it all is that it might be argued that online bookies are now looking at the possibility that they will move from being highly profitable to just normally profitable. Their bet acceptance policies, coupled with high Fixed Odds prices (up to 130% books), form a base for them to achieve very large surpluses, especially when much of their clientele is in the “mug gambler” category. This is clearly why overseas organisations have been paying hundreds of millions of dollar to buy out the local firms.
That last trend has been clearly indicated by GRNSW when it demonstrated that its agreement with online bookies is proving more lucrative under the “share of profits” model than under a commission on turnover. That is the exact opposite of the experience of the big players such as Racing NSW and Racing Victoria, both of which are now tens of millions better off using a turnover base. Obviously, NSW dog punters are not much good at what they do, so bookies are now able to buy a second Roller for the wife.
Perhaps you can take that a bit further. The rapidly increasing use of hand-held devices for wagering can only encourage quickie bets by people without serious racing knowledge. On the run, they would obviously not be able or inclined to study form and odds to any depth, no matter how many apps are made available. The only possible result is a loss over time, and a nice win for the bookies.
And the outcome of gambling on Swedish trots or whatever is a no-brainer. Bookies 1, gamblers 0.
As indicated in earlier columns here, the entire wagering caper has got completely out of hand. The concept of providing useful services to the racing industry is long forgotten, to be replaced by a bank of gambling options similar in shape to the long line of poker machines in your local club and pub. At the same time all power has switched from racing authorities to the wagering sector
An even greater problem is the loss of appreciation of the worth of the greyhound breed. The artificial images on Trackside machines are now little different to the real thing on SKY. Education is light on and so genuine knowledge is scant.
Both trends are manageable but only if governments and racing authorities can see where the failures are and take action to fix them.
As for V'Landys and Racing NSW – good luck to them, but can they make it stick legally? I doubt it. What will happen then? Rafferty's rules?
(A note. The NT firms have become known as “corporate bookmakers”. In a sense that is correct but it is also confusing as some conventional oncourse bookmakers in the south are also incorporated, but they can do that only between family members because of restrictions imposed by racing authorities. Together with such things as high stand fees and taxes, earlier bans on mobile phones (or any phones) and the inability to set up shop outside a racecourse, these arbitrary policies were the prime causes of the establishment of operations in the NT in the first place. Had the industry been more attuned to the modern world and also less inclined to discriminate in favour of TABs, none of this mess would have come about and the NT would have been left to the crocodiles. Racing has been the loser).