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Betfair v Racing NSW

This case has been running all week and will continue for a few days yet. Numerous articles about it in the Aus press with Racing NSW gaining some ground (they couldn't really lose much more) and legalese choking proceedings to a very slow grind. One quote from tomorrow's article in the Sydney Morning Herald I wanted to highlight though:

Racing NSW argues that the fee should be calculated by turnover because turnover is easier to assess and ''less susceptible to avoidance or manipulation'' than gross revenue.

It also argues that turnover is not influenced by the particular business model or business decisions made by the company.

Turnover is also preferable to gross revenue because it cannot be manipulated by inducements, rebates or benefits given to valuable customers, Racing NSW argues.


Rubbish, there is not one system in the world which is manipulation-proof. On-course bookmakers in Aus have been caught over the years taking bets on a second set of books - specifically to avoid turnover tax. Certain corporate bookies have added zeros to significant bets to make them into sexy press releases to send around to all the nation's journos. Turnover is very easy to influence by business model - accept bet, reject bet, tighten margins. If the TABs moved to a 4% margin (instead of 16+) tomorrow, do you think their turnover wouldn't see an enormous increase??

Turnover is only an important performance indicator for the totes, bookies have little interest in turnover, it's the bottom line which counts. And since profits of these companies have to be reported to the government and to the stock exchange for some, then there should be more checks and balances in the gross profits model.

Totes have a place in the betting market, and so do corporate bookmakers and betting exchanges. Trying to protect one will just kill interest across the board and allow the TABs, which one has to remember are not government-owned anymore they have shareholders too, to increase their margins as they see fit as regulations change and more matey agreements are struck behind closed doors....

Ever been to a racecourse in a country with only totes? If you're a punter, it's like watching paint dry (with the exception of rare feature days and Hong Kong which is an isolated case because they understand the balance of quality v quantity).

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