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out come the spin doctors for Tabcorp

Australia's biggest betting company, the once government-owned and still heavily protected by said powers, Tabcorp, are pushing out the tripe to rub Betfair and corporate bookmaker's noses in it after the Racing NSW v Betfair court ruling yesterday. How about this piece of tripe from Sydney's biggest daily paper, masquerading as Tabcorp's weekly newsletter, the Daily Telegraph.

Racing bet case bonanza for NRL

The NRL could receive a $17 million a year windfall - or $1 million-plus per club -following a landmark court ruling on Wednesday in favour of Racing NSW.

Racing NSW had their right upheld in the Federal Court to charge all betting agencies and corporate bookmakers 1.5 per cent of their turnover as the price for allowing them to bet on their product.

The decision has given the NSW racing industry an instant $120 million payday from money already collected but so far held in a trust account. It will also earn the body $50 million a year in future revenues.

But the decision will have ripple effects well beyond racing. It creates a precedent that will almost certainly bring a multi-million dollar windfall to the country's major sporting codes - including rugby league, AFL and cricket. These may now all look to put their own 1.5 per cent turnover levies on the betting agencies.

It sounds perfectly logical to people who have no idea about the economics of betting but the reality is horse racing and rugby league as betting events are poles apart.

Horse racing, particularly through the TABs, which this ruling heavily favours, operates on higher margins due to the number of competitors in each market. TABs take an automatic 16% (actually it varies between 14 and 25% depending on market type, but 16% is the average) of turnover from each market, with an average of about 10 runners, sometimes as many as 24 - but that % takeout never changes.

Betting on other sports revolves almost exclusively on head-to-head options, that is, Team A v Team B for the win, or on the handicap. All the exotic markets such as First Try/Goalscorer, HT/FT take very little in comparison. H2H markets are set to about 106% with no guarantee of winning - i.e. there are no pool bets with margin scraped off the top like racing at the TAB. Impose an exorbitant margin of 1.5% of turnover onto that market and that will wipe out 50% of bookies' profits for the year. Bookies won't absorb all of that, so inevitably it means punters will have to cop bad prices - instead of 1.9/1.9 for a close game, it may be as bad as 1.8/1.8, giving punters no chance of winning over the course of a year. It'd be like trying to play roulette with three zeroes on the wheel.

Don't forget that there are still legal avenues open to Betfair to take this further, and it is almost certain they will, although overturning the verdict without a fresh approach seems a longshot.

Two other points:

1. Bookmakers around the world now bet on NRL, AFL and various other Aus events. They won't be forced to pay anything, so punters seeking value will head offshore.

2. Racing is the only sport geared entirely around betting. Without funding from betting, it would collapse. Other sports survive without it. There is no compulsion for bookmakers in Australia to sign up to any agreement where they pay a share back to the sport. Several betting firms have signed deals with the AFL, NRL, FFA, PGA Tour Australasia etc, but purely so they can invest in sponsorship of that sport to gain customers. Chase a higher payment of levy, and that marketing budget will shrink faster than Kevin Rudd's approval rating.


Sports betting is now big business in Australia. Start imposing disproportional fees on it and there could be plenty of jobs lost. Betting must be about the third biggest industry in the Northern Territory after tourism and mining, not much else goes on there....

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