Skip to main content

Is it the last hurrah for Betfair Australia?

Despite a promising start and a lucrative market, it appears that Betfair's time in Australia might be up. They've not made a profit in Australia since day one and racing authorities, led by Dr Evil in NSW, the self-proclaimed Emperor of all things equine north of the Murray, Peter V'Landys, have done everything they can to make Australian racing unviable for them.

The new set of race fields fees for Victorian racing, the best in the land, will inevitably be followed by other states when their next opportunity to revise their structure comes around.

Racing Victoria announces revised race field fees to be applied from 1 July, 2014

An excerpt: A scale of rates will also apply for all other betting types (non pari-mutuel bets), with a higher rate for premium race days. All other betting types will be charged the greater of, for:

Standard race meetings (440 meetings) – 1.5% of turnover or 15% of gross revenue
Meetings containing a Group or Listed race (45 meetings) – 2.0% of turnover or 20% of gross revenue
Premium Group 1 meetings (10 meetings) – 3.0% of turnover or 30% of gross revenue

Fees for all operators go up - TABs, corporate bookies and Betfair, but it is the exchange that gets screwed the most because there simply isn't any fat in the exchange model when punters only pay commission on their profit per market. Change that model and it dies. They've already raised base commission rates to 6.5% on Aus racing, and warned off all the traders, there's not much hope left for them. And that Federal legislation change to allow in-play betting online like the rest of the civilised world? Richmond might win an AFL Premiership before that happens.

It has already been strongly rumoured that James Packer's 50% share via Crown Resorts Ltd would buy out the parent company and take full control of Betfair Australia. The UK operation has been shedding costs left, right and centre and Australia has been in the firing line for sometime. There's only so long you can wait for laws to change. If that sell-off went ahead, I couldn't imagine them retaining the exchange part, at least for Australian racing. They may just retire the brand in Australia, send it all back to the UK and let punters bet on sports via the main exchange. It has never been Betfair's style to break laws, and as a listed company it certainly won't be now so I couldn't see them offering Aussie racing from abroad in defiance of local legislation. It wouldn't stop them betting on Aussie sport though, those fees aren't draconian enough to defy them or drop local sport altogether. There's always the sportsbook section, but there's no need, or even point, retaining the Betfair brand to operate that.

Rich blokes tend to know rich blokes, and it would not surprise me at all if James Packer teamed up with Matt Tripp to revive the business, in whatever form that may take. After all, Tripp is on public record as saying he wanted to acquire a few brands and work his magic on the Australian punting public again. He's already taken over BetEzy (now BetEasy), rest assured there will be more to come - he has plenty of financial backing behind him.

There will be one hell of a party behind closed doors for Australian racing authorities if and when Betfair shuts up shop, with V'Landys happily pissing away thousands in the process. British bookies and racing authorities need not bother getting excited about this - those copyright laws that were struck down in 1997 in the case of British Horseracing Board v William Hill means the same laws do not apply in the UK/EU and thus that avenue of shutting out betting exchanges isn't available. William Hill might regret fighting that case now....

Disclaimer - this is all speculation on my part, I do not have any inside knowledge of Betfair in Australia these days, understandably inside sources have clammed up.

Comments

  1. Good write up tho Scotty and as interesting as ever , thanks.

    ReplyDelete

Post a Comment

Thanks for your comments, but if you're a spammer, you've just wasted your time - it won't get posted.

Popular posts from this blog

lay the field - my favourite racing strategy

Dabbling with laying the field in-running at various prices today, not just one price, but several in the same race. Got several matched in the previous race at Brighton, then this race came along at Nottingham. Such a long straight at Nottingham makes punters often over-react and think the finish line is closer than it actually is. As you can see by the number of bets matched, there was plenty of volatility in this in-play market. It's rare you'll get a complete wipe-out with one horse getting matched at all levels, but it can happen, so don't give yourself too much risk...

Racing has a Ponzi scheme - and the fallout will be enormous

When the term 'Ponzi scheme' is mentioned these days, the names Bernard Madoff and Allen Stanford instantly spring to mind. The pair of them ran multi-billion dollar frauds (US$60bn and $8bn respectively) that destroyed the lives of thousands of investors who had put their life savings into a 'wonderful' investment strategy. How so many people were sucked into the scheme is baffling to those on the outside. The lifestyle, the sales pitch, the success stories of the early investors - I suppose it all adds up.

So where does this link to racing you ask? A prominent Australian 'racing identity' this week has been reported to have lost access to a bank account with punters' club funds of $194m in it. Firstly - is there a worse term for anyone to be labelled with that 'racing identity'? It ALWAYS ends up meaning shonky crook! Secondly - who the hell has a punters' club with an active bankroll in the tens of millions? It simply can't be done.

The…

damage control when trading goals

When trades go bad, some people will say cut your losses immediately, others will recommend having a bit of patience as events tend to level out (i.e. games with two goals in the first 10 mins never end up with 18 goals in 90 minutes). This is something I like to do on certain matches.

Background:
1. You've backed Under 2.5 goals, trying to nick a few ticks at a time as the clock ticks.
2. You've been caught out by a goal.
3. The market has gone sharply against you.

On this particular match from a couple of weeks ago, there was an early goal (sixth minute) before I got involved. The period immediately after an early goal regularly shows a sharp drop in the Under price, so I was trying to capitalise on that. But Watford then scored again after 14 minutes. The Back price I took (3.95) was now out to 12 - I could close out for a big loss (not my style) or wait and wait for the price to come back to somewhere I could close out for minimal damage. But at 2-0 after 15 minutes, it w…