October
SeptemberCompetition the key
Last week John Schreck and the NSW TAB supremo launched into the age-old attack on punters’ margins. Naturally Betfair was the main target.
Betfair was established by a couple of English punters fed up with excessive take-out percentages by the tote and bookmakers. At a five-percent commission Betfair became an overnight sensation with punters around the world.
Recently in Australia the High Court forced that commission up over six per cent, which makes Betfair less attractive but still generally on par with bookmakers.
The Productivity Commission ruled that fixed take-out commissions are detrimental to punters and anticompetitive. This is the same stance government adopts with all retail firms — retail price maimtenance, better known as price fixing, has been illegal for more than 50 years!
The High Court unfortunately has ruled against the people. Racing, as any business, has only its customers to eke income from and as the Productivity Commission affirms we are by law entitled to that basic right of competition.
I was recently at the Nottingham races the day the Goodwood Cup was run (at Goodwood). Nottingham was typical of a midweek meet anywhere in Australia. The crowd was much larger than we attract here, even though it cost the equivalent of $40 for entry.
On English courses a bookmaker must have a licence (I presume) for a betting shop and naturally the tote has a similar room in which to transact. The bookmakers’ betting shop was crowded out while two people were in the tote!
British horse racing survives splendidly on the competitive margins Betfair and bookies are forced to yield by the savvy English punter. A thick commission from the tote, which accounts for four per cent of betting turnover in the UK, would be no doubt handy to the industry along with the massive entrance charge.
Conversely a UK horse generally has one or just a couple of mates as owners. Compare this to our situation, where most horses have 20 or more owners because racing in this country is nothing more than a jigged-up affair for studs to flog off horses at ridiculous prices that bear no relationship to prizemoney.
The federal government needs to reclassify racing as a business, thus forcing the racing supremos to abandon this anticompetitive price-fixing model that continues to harm its customers — us punters. As Coles says down, down with prices, we punters say down, down with margins!
Bendigo (Vic)