Ohokaman

Interesting developments in Australia too....

2 posts in this topic

LOOK OVER YOUR SHOULDER RACING, HERE COMES SPORT BETTING

One of Australia’s longest-serving bookmakers has gone to the extraordinary step of issuing a lengthy statement outlining some serious concerns for punters betting on Victorian and Western Australian racing.

And the business determinations being taken by the bookmaker in seeking to actually reduce turnover on racing in Victoria and WA should be a deeply disturbing message for those running racing in those states.

What should be equally concerning for all in racing is the fact that turnover on sports betting for the bookmaker has increased by more than 300% in the past three years while racing has increased by just 55% with their racing hold soon to be surpassed by sport.

Lloyd Merlehan has been operating as a bookmaker for more than 30 years based on the Gold Coast and with his son Tristan is now run the corporate bookmaking business TopSport.

Over the years Lloyd has gone head-to-head with the biggest players on the Australian punting scene and he’s considered one of the nice guys of the bookmaking game.

More recently Lloyd has moved to hand over greater control of the business to Tristan and the younger Merlehan says, after battling to get anywhere with racing authorities in Victoria and the WA, they have had enough.

“We have reluctantly determined to introduce significant changes from July 1 which will affect our punters by no longer offering certain ‘loss making’ products on Victorian and West Australian racing,” Tristan said.

“We have relented for some time as we fully appreciate the impact our actions - that is, deliberately instigating a reduction in turnover - will have on all industry participants.

“Racing controlling bodies will receive less fees. TopSport will have less opportunity to turn a profit and punters will either not be able to 'get on', or will have to do their best to "gamble responsibly" on products and into markets with higher margins and significantly less chance of a reward.

“This is a regrettable outcome for all concerned, however, the reality of the situation is that we simply have no alternative. We cannot continue to offer products on which we are guaranteed to suffer a loss.

“Our intensifying concern is that, whilst the lustre of the racing industry at its peak in the Sydney autumn or Melbourne spring may still glisten and gleam, many sectors and members of the industry are suffering under the pressures of excessive and misguided regulation and taxation.

“We fear that the industry may be atop a precarious precipice which, should it tumble over, would see the sport of kings in this country suffer irreparable damage.”

As an example of the effect of the exorbitant tax regimes currently in place in Victoria, Tristan proffered some turnover figures from the 2018 spring carnival at Flemington in which the TopSport business turned over $4.547m on Flemington for the four days, making a profit of just $88,000 yet being forced to pay product fees in excess of $148,000.

“For more than a decade - firstly under the auspices of intellectual property, and more latterly under the guise of racing integrity, consumer protection and harm minimisation - racing wagering operators have been beset by an unyielding cash-grab which only continues to grow more feverish and gluttonous,” Tristan said.

“We don't doubt that the primary objective of each of the racing controlling bodies is the betterment of the racing industry in their respective jurisdictions. And in some respects they are well and truly succeeding at their job. But, from our perspective, it seems obvious that the regulators are constantly ignorant of, and dramatically undervaluing, the most important element of the racing industry - the punter.

“As the bulk of the wagering revenue of corporate bookmakers is remitted to racing controlling bodies in the form of fees and taxes, the punter is already indirectly financing much of the additional and copious prizemoney being foisted on World racing's elite during the major carnivals - and what does the punter receive in return?

“As a direct consequence of the continuous growth in fees and taxes, the punter is being presented with ever-rising market percentages and, as operators are squeezed out of the market, diminished competition. This can only lead to reducing returns.

“This statement is not intended to be a cry for help as our business continues to grow, but we simply see no point in sitting idly and hoping for change. We are not waging war on any racing authority, however, we feel that a message needs to be sent that change is required in order to keep racing wagering, and concurrently the racing industry, healthy and vibrant for years to come.

“If the racing wagering marketplace is to improve and thrive, it is important that racing control bodies come to realise the volume of turnover on their product is already dissipating, and that volume of decline will only increase if current regulatory and taxation trends continue.

“We have placed detailed and reasoned proposals and suggestions before a number of racing control bodies which we believe will sustainably escalate wagering turnover on racing and greatly benefit the racing industry.

“We firmly believe that giving bookmakers an incentive to service the low-margin sector (the bigger punters) of the marketplace can be of great benefit to the racing industry. Not only would it assist in ensuring that this cash is not dispatched to the unregulated offshore wagering markets and SP bookmakers, we think that wagering turnover would increase even on current levels.

“As a direct consequence of the continuous growth in fees and taxes, the punter is being presented with ever-rising market percentages and, as operators are squeezed out of the market, diminished competition. This can only lead to further reduced returns.

“With the above in mind, it is inevitable that punters will shift their focus and redirect their 'hard-earned' to other gambling mediums and other wagering marketplaces. This trend is already apparent as we observe the rapid growth in sports betting during the past decade and this should be alarming for racing authorities. 

“TopSport is a relatively minor player in the grand scheme of things. But, given that we cannot sustain our operations on Victorian thoroughbred or Western Australian racing, we are sure that our fears and concerns are reasonable and well-held. This is further evidenced by the actions of other, more illustrious wagering operators who have started to follow suit by elevating market percentages, curtailing product offerings and restricting the activities of lower-margin punters.

“The bottom line is we want a solution which will give all participants in this industry a fair go, and which will ensure that we can all enjoy this great sport for generations to come.”

Racing Victoria reported on Monday TopSport’s annual turnover on Victorian thoroughbred racing accounted for one per cent of the total turnover which Tristan Merlehan didn’t dispute, however he did say he’d be interested to know for transparency sake whether TopSport contributed only one per cent of the product fees generated.

One man rubbing his hands with glee at the latest developments on the Victorian racing front would no doubt be Racing NSW supremo Peter V’Landys who is always looking for an edge to get more turnover on racing in NSW.

TopSport aren’t the only ones tightening their belts on their offerings on Victorian and WA racing and there’s little doubt racing in other Australian jurisdictions will be the beneficiary at least to some degree.

 

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I think the paragraph that says, “Racing Victoria reported on Monday TopSport’s annual turnover on Victorian thoroughbred racing accounted for one per cent of the total turnover which Tristan Merlehan didn’t dispute, however he did say he’d be interested to know for transparency sake whether TopSport contributed only one per cent of the product fees generated“, probably sums it up. Top Sport has been hurt by competition and altho a lot of what he says may be true to a point, I think that competition has forced his hand. 

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