Will Betfair Take on NZ TAB?

[Chief Stipe]

Betfair Australia ignores Jockey Club’s cease and desist demand

The wagering outfit continues to host markets on Hong Kong racing

Betfair Australia has defied the Jockey Club’s demand, continuing to host markets on Hong Kong racing.

On Wednesday, the Jockey Club wrote an open letter to the company, ordering it to cease and desist, but that request was ignored with the betting exchange operating on Sunday’s Sha Tin meeting and promoting the fact it was doing so on Twitter.

A total of A$472,165 (HK$2.52 million) was matched across the 10 races – an increase of about A$50,000 (HK$267,000) on last week’s meeting – with the biggest hold of A$87,733 (HK$468,896) coming in the Class Two.

The Jockey Club remains adamant the biggest issue is the threat to integrity – the ability for punters to profit off a horse losing and the potential for that to be exploited.

While the Jockey Club declined to comment on the record about Betfair Australia continuing to operate on Hong Kong racing, the fight is definitely continuing behind the scenes.

The addition of Betfair to the marketplace (for punters in Australia) hasn’t really affected the Jockey Club’s turnover, which again increased on last year’s figure, up HK$30 million to HK$1.393 billion.

[Freda]

Not an area I have any experience/expertise in...but I can't really see how HK can enforce Betfair's compliance?

[Chief Stipe]

44 minutes ago, Freda said:

Not an area I have any experience/expertise in...but I can't really see how HK can enforce Betfair's compliance?

Well what I can't work out is under the new Racefields legislation how will RITA (NZRB) enforce it?

[Freda]

Didn't Betfair offer voluntary fee paying at one point?  or did I get that wrong.

I know J.A was banging on about getting fees from Tabcorp,  et al...but Tabcorp already contributes.

 

Edited September 9, 2019 by Freda

[Freda]

13 minutes ago, Chief Stipe said:

Well what I can't work out is under the new Racefields legislation how will RITA (NZRB) enforce it?

Just re-read...do you mean RITA enforcing a total ban on Betfair in NZ,  or enforcing a fee-paying regime?

Either way,  don't see how they can enforce anything.

[curious]

Isn't BF already paying on NZ Racing?

[Freda]

Not sure -  you and Mardi have had discussions about that,  and many other betting matters,  but I can't remember.

 I can't imagine the amount involved would be worth getting excited about.

[premixer]

I wonder if there is some deal between the NZ TAB and paddy power in regards to betfair?     Paddy power own betfair, and paddy power are partners with the TAB for odds setting from my understanding when they first announced the TAB website overhaul.

[curious]

 

 

NZ racing to boost wagering audience through Sportsbet deal

15 August 2019

The New Zealand Racing Industry Transition Agency (RITA), the body established to oversee the development of a new governance structure for the country's horseracing industry, has struck a deal that will see Sportsbet launch live streaming of races in Australia.

Through the agreement Flutter Entertainment-owned Sportsbet will feature live streams of thoroughbred and harness racing, as well as greyhound racing events, on its Australian site. Tabcorp, the long-term broadcast and wagering partner of the New Zealand TAB, will act as intermediary, facilitating delivery of the content.

“The new deal involves Sportsbet taking live vision of all three codes of New Zealand racing, getting our racing in front of a big new audience in the Australian market that we’ve never been in, while bringing in a new revenue source for the industry,” TAB general manager for media and international Andy Kydd explained.

“Sportsbet is the largest corporate bookmaker in Australia by a stretch and the second biggest operator in the market behind Tabcorp," Kydd continued. "We are very grateful to Tabcorp for delivering the vision to Sportsbet, their biggest competitor in Australia.”

The agreement follows a deal between IITA and another Flutter-owned brand, Betfair, announced earlier this year. This saw Betfair agree to pay product fees to the TAB in return for offering odds on New Zealand racing. Similar agreements, as part of a wider drive to revitalise the country's racing industry, are being negotiated with other Australian operators. 

Announced in April this year, the New Zealand government aims to halt the industry's decline, with the existing horseracing levy to be phased out over the next three years. In 2018, the levy generated, NZ$13.9m (£7.4m/€8.0m/US$8.9m), representing 4% of overall betting profit in the country, with these funds to be reinvested in racing and sport going forward.

This also saw the New Zealand Racing Board replaced with the RITA, to manage the transition to a new governance structure. While the government's plans specifically ruled out implementing a licensing model for betting operators, it will look to impose a point of consumption tax on offshore operators taking bets in the market. 

This may be complemented by an expansion of legal products - and potentially a licensing system for certain verticals - after a public consultation to gauge public support for regulating new forms of online gambling was launched earlier this month. With technology developing rapidly, and gambling legislation unchanged since 2003, the government aims to ensure customers are protected from the negative effects of gambling. 

At present, only Lotto NZ and the TAB are permitted to offer gambling products online, though the government acknowledged that an increasing number of New Zealanders were gambling via offshore providers, especially in minority communities.

 

Edited September 14, 2019 by curious

[Freda]

That's interesting, Curious.    Would you think the funds garnered from Betfair will be significant?

Edited September 14, 2019 by Freda

[curious]

1 hour ago, Freda said:

That's interesting, Curious.    Would you think the funds garnered from Betfair will be significant?

I doubt it. Have you noticed the impact? The last I saw there were 34 (from memory) operators paying product fees to RITA on NZ racing. However, they (RITA) are paying out $27m more to the codes than their net earnings and compelling the codes to waste that on stake money. To make matters worse, RITA, which already scooped up a hospital pass, has been instructed by the Minister that they must continue to pay it. Short of some sort of divine intervention, where is the revenue going to come from to remedy that deficit let alone grow earnings?

There remains some belief out there that the PoC tax will mitigate this but I don't see how. Despite the short term problem of implementation and collection costs (remember the DIA estimated these may exceed the collected revenue) there is the longer term issue that it will come directly from punters' pockets and we already know that punters en masse are not keen to suddenly start losing more nor do they like losing faster. Yes, there's $14m p.a. coming courtesy of the taxpayer over the next 3 years by way of the duty relief but that seems like a drop in the bucket to me.

[Freda]

FFs.....so,  the Messara report, which so many  [ including me,  I have to confess ]  were waiting for with such hope,  has turned out to be a damp squib.

Would there be any points on that report that you could see racing deriving benefit from?

[Chief Stipe]

Just as the NZ TAB is paid for the broadcasting of NZ races overseas we pay in the opposite direction.  Conceivably the net position is more likely a deficit.

[Freda]

It gets worse.

[Chief Stipe]

I think the powers that be live in a delusional state of mind that the world actually wants to see and bet on our product.

[theshu]

It also puts it into perspective when you realise that the time honoured Melbourne Cup is not in the top 100 rated races in the world,so really what would the normal guy in Australia even think about betting in races from New Zealand in general.

[curious]

1 hour ago, Freda said:

FFs.....so,  the Messara report, which so many  [ including me,  I have to confess ]  were waiting for with such hope,  has turned out to be a damp squib.

Would there be any points on that report that you could see racing deriving benefit from?

curious

 

Posted September 25, 2018 (edited)

On 23/09/2018 at 11:11 AM, hesi said:

Would you be prepared to put up a precis then, just on BOAY, about your main concerns about the report and why.

Just summaries really, no urgency, and we'll keep it to one side and use it as a reference back to what actually happens.

Here's a brief crack at that Hesi.

Recommendations

1.       Change the governance structure, so the NZRB becomes Wagering NZ with racing responsibilities devolving to the individual Codes. This will sharpen the commercial focus of TAB operations and improve the decision-making and accountability of the Codes.

Something along these lines possibly a good idea. Worth more detailed development.

2.       Establish Racing NZ as a consultative forum for the three Codes to agree on issues such as entering into commercial agreements with Wagering NZ, approving betting rules and budgets for the integrity bodies, equine health & research, etc.

Same as 1.

3.       Change the composition and qualifications for directors of regulatory bodies.

Yes, definitely needs sorting. Again, the devil is in the detail.

4.       Request that a Performance and Efficiency Audit of the NZRB be initiated under section 14 of the Racing Act 2003, with particular emphasis on the operating costs of the NZRB.

Absolutely. Required under current legislation anyway and overdue. The right reviewer and terms of reference to address some of the matters in this report is critical.

5.       Amend the Section 16 distribution formula of the Racing Act 2003 to a more equitable basis for fixed 10-year terms.

Don’t think the report makes a sensible case for this. Should remain proportionally based on domestic revenue generated.

6.       Initiate a special review of the structure and efficacy of the RIU and allied integrity bodies, to be conducted by an independent qualified person.

Yep. Probably should be devolved back to the codes. Has been a disaster as currently structured. Critical ingredient for increasing wagering revenue that integrity system is much more robust and reliable and seen to be so by punters.

7.       Begin negotiations for the outsourcing of the TAB’s commercial activities to an international wagering operator, to gain the significant advantages of scale.

Worth considering but detailed business case needs to be made alongside alternatives. In particular, retaining the tote business and making it globally competitive and licensing fixed odds operators in NZ (with a restriction on tote derivative products) should be considered.

8.       Seek approval for a suite of new wagering products to increase funding for the industry.

OK. But not likely to improve revenue. Adds to costs and unlikely to increase overall punter spend.

9.       Confirm the assignment of Intellectual Property (IP) by the Clubs to the Codes.

Don’t see the point in this. Clubs may be better to retain and control this themselves. Needs work and a better case made. Can club and community assets be co-opted legislatively or lawfully?

10.    Introduce Race Field and Point Of Consumption Tax legislation expeditiously. These two measures will bring New Zealand’s racing industry into line with its Australian counterparts and provide much needed additional revenue.

Race fields, yes of course. But legislation not required for arrangements with corporate bookmakers to be put in place as already demonstrated. RB estimates wildly out of kilter with the reliable research. DIA estimates more robust. I’d say might get to $3-5m net across all codes.

PoC tax, nope. See DIA estimates that administrative costs may exceed revenue. Providers already paying a consumption tax in the form of GST. If implemented any net revenue should go to taxpayer not racing anyway.

11.    Repeal the existing betting levy of approximately $13 million per annum paid by the NZRB, given that the thoroughbred Code is a loss maker overall, with the net owners’ losses outweighing the NZRB’s net profit.

Nice if you can get it. Note that some $50m of duty relief previously granted has been wasted on stakes and operating costs. Industry didn’t do what they said they would with that so why should the taxpayer gift more to a declining industry, or any industry for that matter. Also, an equity matter with casinos betting duty. Probably politically unpalatable.

12.    Clarify legislation to vest Race Club property and assets to the Code regulatory bodies for the benefit of the industry as a whole.

Big NO. Can’t legislate to colonise community and club assets. Needs to occur voluntarily at the discretion of club members where clubs will no longer have raceday licences. They should decide whether assets are put to other uses in the community. Any reinvestment in racing will also mostly have to be in the same region.

13.    Reduce the number of thoroughbred race tracks from 48 to 28 tracks under a scheduled program. This does not require the closure of any Club

Yep. No brainer but the redevelopment of remaining tracks needs to occur first in order to have an infrastructure in place that can cope with the racing required.

14.    Upgrade the facilities and tracks of the remaining racecourses with funds generated from the sale of surplus property resulting from track closures to provide a streamlined, modern and competitive thoroughbred racing sector capable of marketing itself globally.

Yep to the upgrades but the business case for that needs to be funded from current and future revenue and be sustainable.

15.    Construct three synthetic all-weather tracks at Cambridge, Awapuni & Riccarton with assistance from the New Zealand Government’s Provincial Growth Fund. Support the development of the Waikato Greenfields Project.

Yep in principle. Again, the initial cost and ongoing maintenance needs to be funded from current and future revenue increases. The business case is not made in the report. Needs more detailed work. That should include comparison of synthetics with Strathayr for these AWTs.

16.    Introduce robust processes to establish traceability from birth and the re-homing of the entire thoroughbred herd, as the foundation stone of the industry’s ongoing animal welfare program.

Fine.

17.    Increase thoroughbred prizemoney gradually to over $100 million per annum through a simplified three-tier racing model, with payments extended to tenth place in all races.

Great but it is not clear where the revenue or cost savings to do that will come from other than some from the restructuring perhaps. Recommended changes as above will not on their own make the NZ racing product competitive or attract more wagering spend. That also requires, among other things, aligning the prizemoney structure more closely to revenue generated and having a fair and competitive handicapping system for starters.

Edited September 25, 2018 by curious

Edited September 15, 2019 by curious

[Freda]

Thanks.

I'd let that summation slip my mind.

[curious]

1 hour ago, Freda said:

Thanks.

I'd let that summation slip my mind.

I note in that now year old summary that I did suggest that some ideas in there might be worth further work and/or the development of a clear business case. That said, a year on and there doesn't yet seem that any such things have emerged although it is possible some advances might be included in the MAC final report but as far as I can see that has still not been publicly released.

You have to remember that Messara is a big breeder and the report reads more like a collection of ideas from the local big breeders than a robust analysis of what might optimise wagering revenue in NZ and grow the industry. The government has bought it though so we'll have to live with the implementation and outcomes. I'm not very hopeful about those and I think that the supposed savior of racing (Peters) and the Messiah may go down in history as managing to preside over the final demise of NZ racing as we know it, all in one brief political term.

[Freda]

32 minutes ago, curious said:

I note in that now year old summary that I did suggest that some ideas in there might be worth further work and/or the development of a clear business case. That said, a year on and there doesn't yet seem that any such things have emerged although it is possible some advances might be included in the MAC final report but as far as I can see that has still not been publicly released.

You have to remember that Messara is a big breeder and the report reads more like a collection of ideas from the local big breeders than a robust analysis of what might optimise wagering revenue in NZ and grow the industry. The government has bought it though so we'll have to live with the implementation and outcomes. I'm not very hopeful about those and I think that the supposed savior of racing (Peters) and the Messiah may go down in history as managing to preside over the final demise of NZ racing as we know it, all in one brief political term.

Although my opinion carries little weight/ credibility,   I have to agree with you.

[Freda]

....although just continuing on without changing anything is/was not an option,  there hasn't emerged any significant change at all.  Just more shuffling to squeeze more money to throw at a dysfunctional model. 

Modern H&S laws will lead to track rationalization without needing to wave a big stick - alienating communities in the process.  There are plenty of examples of track closures with clubs racing elsewhere - I dont see buckets of dosh ensuing from those for the wider industry. 

Allweather?  maybe quite reasonable for Cambridge,  with its large horse population and outdated facilities....but elsewhere?  Huge waste of money for mine, dont see any potential for increased revenue by closing ( say ) Timaru and running a borefest of a day at Riccarton - where no one goes except on Cup days.

[Freda]

16 hours ago, curious said:

 

You have to remember that Messara is a big breeder and the report reads more like a collection of ideas from the local big breeders than a robust analysis of what might optimise wagering revenue in NZ and grow the industry. The government has bought it though so we'll have to live with the implementation and outcomes. I'm not very hopeful about those and I think that the supposed savior of racing (Peters) and the Messiah may go down in history as managing to preside over the final demise of NZ racing as we know it, all in one brief political term.

B. d L is a close personal friend of Messara through his former breeding industry position - and also,  very close to Winston - and played a big part of the involvement of the two.

I think your opinion is bang on there.

[Chief Stipe]

19 hours ago, Freda said:

Modern H&S laws will lead to track rationalization without needing to wave a big stick - alienating communities in the process.  There are plenty of examples of track closures with clubs racing elsewhere - I dont see buckets of dosh ensuing from those for the wider industry. 

Tracks will close over time due to economic reality.  I don't see the point of closing those tracks that can keep going using their own resources e.g. Reefton or even Hokitika for that matter.  The reality is we don't have the stakes funding to fund all the races on the programme nor the numbers of horses to fill those races.  The latter will be an economic driver however those in position of power will distort market forces "in the interests of the industry as a whole."  If trainers and owners continue to nominate for courses like Reefton and Reefton keeps solvent then why not race there?  Reefton costs the industry a damn sight less than Trentham.

As for acquiring assets from racecourse sales they are dreaming.  I don't know what the racecourse ownership model is like in Australia but it must be different for Mesara to buy into this approach.  I'm guessing it is going to take some draconian asset grabbing legislation to be passed for the Racing Industry to get their hands on club assets.  Unlikely to happen now under this government.

I also think the Workplace Safety "issue" is a red herring.  All you have to do is separate the horses and their workers from the general public.  When was the last time we saw a race horse leap the fence and run riot amongst the crowd?  The only time I can remember was when I was at a harness meeting at Waterlea.  A horse took fright at the start, dislodged it's driver, lept the outside fence ran down the roped off channel to the stables and pulled up at its stall.  Of course there is the issue of track conditions and horse falls but they seem to be paying lip service to this issue at the big tracks.

I agree with your assessment of an All Weather Track - the only synthetic type track I would support is a Strathayr.  Have you noticed on some of those overseas tracks all the horses in a race wear some form of head gear?  We talk about track bias - seems to me those dirt tracks favour those that are in front not getting a ton of grit chucked into their faces!

[Freda]

The H & S matter I was thinking about was with respect to grandstands,  etc.  You are right about the horse aspect....and who needs a grandstand nowadays anyway ?

The only requirement really is for jockeys/drivers to have somewhere appropriate to shower/change,  etc,and some of the old buildings which incorporate viewing facilities as well would have to go.