Punters rebates, yes or no?

[Leggy 4,076]

Should we or shouldn't we pay big syndicated rebates to bet into or through our commingled pools?

I'm thinking threshhold levels of millions per annum to trigger the rebates but surely it makes sense doesn't it? especially if our global competitors are doing it.

5% of 100 million is far better than 15% of zero isn't it?

According to Lichter's article in the place punter thread, we can't because of the commingling agreements. Can we?

[Leggy 4,076]

Well we've had heaps of discussion about this. You have suggested it as an oncourse strategy, which seems to be allowable if the clubs, not the TAB are doing it. We have to get competitive both with lower takeouts and rebates on some sort of transparent scale, if we can.

[Fartoomuch 1,376]

5% of 100 million is far better than 15% of zero isn't it?

The fixed odds lads at the TAB who run 130+ books will be nervous.

[punnaponning 0]

and clearly establish the rules then ensure they are available to all customers .

The idea that they continue to takeout up to 26% and on average 18% needs to be addressed as a priority well before they start flashing rebates around.

Otherwise the industrys highly reputation with the NZ public will be further damaged .

What is now required is an immediate declaration of the current situation. It seemingly gets more mickey mouse daily.

[LittleDog 0]

A group of us have been lobbying the TAB to pay rebates on turnover for some time. It has been a long slow process and they have come to the party in a small way but not in the form of a straight rebate.

The gaming environment is extremely competitive and unless the TAB embrace the fact that high turnover punters are encouraged to bet with the organisation who offers the best deal then they are missing the boat.

Some of these punters work on very small margins and if they can get a 4 or 5 percent rebate then this make there job of making a profit a lot easier.

Yes! A turnover rebate to high value clients needs to be paid if they want to grow there business. It is not rocket science!

[Dennis 0]

The punters they need to rebate to keep there business are the large NZ punters who bet primarily on NZ and Australian domestic gallops.

These are the ones that are moving there business overseas to the Australian corporates, and a little to Betfair.

The rebate threshold should start at the $400k p.a level and be around 3% tote and fixed.

The problem market in terms of turnover is NZ domestic, and I don't see that large international syndicates are going to be that bothered with our domestic market given it's pool sizes and the particular form characteristics of NZ domestic racing.

But there may be a space for them in using the NZTAB as a vehicle to bet into Australian markets as Sheriff says.

But I could see a backlash if overseas syndicates got rebates and NZ domestic customers (who have been caned for decades) missed out.

[wph 49]

Sheriff....How many punters in NZ do you think would be turning over $40k a week consistently..i.e over $2 million p.a.??

Would be interested to hear if any Racecafers are ....or if they have friends that are (real friends not I know a guy who knows a guy who knows a guy etc etc )

[Dennis 0]

I would further add that on average margins (tote) of about 18% then surely it makes good commercial sense to offer rebates of 3% (after a threshold is met) to keep punters business in what is now a highly competitive market?

It seems a no brainer to me, but the NZTAB seem to have a dogma that there way of business (high takeout, no rebate, wall to wall racing) is the right one, in the face of all evidence.

[Leggy 4,076]

Sheriff....How many punters in NZ do you think would be turning over $40k a week consistently..i.e over $2 million p.a.??

Would be interested to hear if any Racecafers are ....or if they have friends that are (real friends not I know a guy who knows a guy who knows a guy etc etc )

WPH, I haven't seen any recent figures but 8 years ago, 400 largest punters (about 1.3% of the then 300,000 active accounts) were doing 80% of turnover which was running about 1m a week, so that's 40k a week each on average. Some of that business has no doubt shifted but inflation would have brought more into the group which would suggest a similar figure would be a reasonable estimate.

http://cio.co.nz/cio.nsf/spot/3CCD25DC5E5A3AD8CC2572AF000B6E10

[Leggy 4,076]

oops that should read 20k NOT 40k

WPH, I haven't seen any recent figures but 8 years ago, 400 largest punters (about 1.3% of the then 300,000 active accounts) were doing 80% of turnover which was running about 1m a week, so that's 20k a week each on average. Some of that business has no doubt shifted but inflation would have brought more into the group which would suggest a similar figure would be a reasonable estimate.

http://cio.co.nz/cio.nsf/spot/3CCD25DC5E5A3AD8CC2572AF000B6E10

[Dennis 0]

oops that should read 20k NOT 40k

My gut feel is that is about correct ($20k per week), although the numbers are 8 years old.

The question is how much of this turnover is now done through overseas accounts?

[punnaponning 0]

currently punters losses are around $5million per week , the vast majority from small punters who are being subjected to an average of 18% takeout.

Surely we need to address their plight FIRST and establish how we can extract more from them by giving them a fairer deal. This means reducing the current takeout rate for all .

If takeouts on all products was reduced to an even 10% I believe there would be absolutely no need to offer discounts to big punters as on exotics the takeout would be highly competitive with even BF .

Also we need to remember that already fixed odds betting is producing a takeout of less than 10% which is probably where the majority of big punter money goes. Therefore the margin is tight by pari mutuel standards.

Just look at BF and learn , very low base takeout of 2.5% then steps starting at low levels of turnover of 5% decrease in takeout to a level of 1%.

Plus they give regular little goodies.

But the most important thing is 2.5% base.

The other approach might be to consider discounts for internet betting which is presumably must be considerably cheaper to run than other avenues of betting. But this would certainly attract overseas/new money

Finally any rebate offered must be transparent and available to all.

[Leggy 4,076]

I agree with Punna, that it would be far preferable to lower takeouts for all, at least all internet punters. This should especially apply to exotics. The opportunity to capture the big punters in that price sensitive market is running out I suspect.

There is little extra cost in applying it to the 99% that do only 20% of turnover anyway.

There could also be perhaps an additional scaled rebate of 2-3%.

[Diver Dan 187]

The rebate idea is sound but needs a little tinkering.

Our product isn't that appealing to off shore "serious punters/syndicates" IMHO.

The product being:

1. The right track and keep it to just one track that provides the most consistent footing- nothing uglier than switching to races that are run on deep ground at Riverton.

2.The class of horse/jockeys

3. Pool size significant to handle large bets.

4. Positive media.

5. Make heroes of Mc Donald and DD.

6. etc, etc etc.

All larger on shore punters should be up for a rebate for continued support ahead of trying to attract off shore -.

I can leak into the 20k per week on some summer months but I'm very price driven.

Betfair is impossible to beat on most dividends(some pools in NZ are still small, OK for Oz racing) and you have the option of laying.

The only way I would be swayed to take some custom back to the TAB would be the enticement of a rebate.

[Dennis 0]

Well yes I tend to agree, a rebate only has the effect of decreasing the take out rate, but only for specific punters.

Just lower the takeout rate and everyone benefits, plus you don't need to administer a rebate scheme.

The only thing I would add is that I have seen some big punters really ramp up there turnover with the lure of a rebate.

Not always the smartest move, but the prospect of a rebate cheque clouds the thinking.

So a properly thought out and incentivised rebate scheme can drive up turnover and profit.

Plus a rebate credited to a TAB account is going to be tempting to a lot of people.

For example a $20k rebate once a year, sitting there begging to be punted?

Some will withdraw the money, others won't.

[rodmc 0]

Just a question....

Would it be possible to move the NZ TAB offshore to say Gibraltar?

[Leggy 4,076]

The rebate idea is sound but needs a little tinkering.

Our product isn't that appealing to off shore "serious punters/syndicates" IMHO.

The product being:

1. The right track and keep it to just one track that provides the most consistent footing- nothing uglier than switching to races that are run on deep ground at Riverton.

2.The class of horse/jockeys

3. Pool size significant to handle large bets.

4. Positive media.

5. Make heroes of Mc Donald and DD.

6. etc, etc etc.

All larger on shore punters should be up for a rebate for continued support ahead of trying to attract off shore -.

I can leak into the 20k per week on some summer months but I'm very price driven.

Betfair is impossible to beat on most dividends(some pools in NZ are still small, OK for Oz racing) and you have the option of laying.

The only way I would be swayed to take some custom back to the TAB would be the enticement of a rebate.

What sort of rebate would it take and what about lower takeouts?

[Diver Dan 187]

What sort of rebate would it take and what about lower takeouts?

I agree that takeout rakes are too high especially the exotics - I do less than 10% on these type of bets. It's proven that lower rakes stimulate betting - a no brainer IMHO.

A rebate set at 5% would be great but would be happy with 3%.

I'm happy to make 3-5% profit on turnover in a year so to get a rebate(3%-5%) basically doubles the bottom line.

I have been pushing for this in the past.

[Dennis 0]

A rebate for a winning punter has got the potential to really drive turnover.

If we take the Diver Dan example (and it's not dissimilar to my own), instead of making 3% profit on turnover, he should now make 6%.

That surely would give the punter the confidence to ramp up his punting knowing that he makes a profit, plus the added bonus of a rebate.

Its a leverage effect that really should be a win, win situation for both the TAB and the punter.

In fact the TAB can win 2 ways-1 by not losing the customer to a competitor, and 2 by encouraging the customer to boost turnover through the NZTAB, especially if he's a winner.

It should even benefit punters who break even, or make a small loss.

It's a no brainer, but I feel there needs to be a change at the top of the TAB, as they seem too entrenched in there ways IMO.

[Blue Magic 0]

I know of one that was regularly doing 30k-40k a week with the TAB. Bets entirely through Sportingbet Aus and Betfair now.

Pretty sure Betfair offered him 2% comm, which across 12 months equates to $30,000 saving on the market base rate of 4%.

[Idolmite 2,529]

I'd like a 110% rebate on every losing bet I make......

[chelseacol 2,488]

I know of one that was regularly doing 30k-40k a week with the TAB. Bets entirely through Sportingbet Aus and Betfair now.

Pretty sure Betfair offered him 2% comm, which across 12 months equates to $30,000 saving on the market base rate of 4%.

It is a no brainer that the TAB have to compete to retain (or even attract) this type of customer.

This involves lowering takeout rates as a starting point as well as rebates for valuable customers.

At the moment the TAB seems to be thinking it is still the only game in town, and pretending this internet thing doesn't exist.

[Peter Harrop 226]

I know of one that was regularly doing 30k-40k a week with the TAB. Bets entirely through Sportingbet Aus and Betfair now.

Pretty sure Betfair offered him 2% comm, which across 12 months equates to $30,000 saving on the market base rate of 4%.

He must be betting Australian racing on betfair then, because New Zealand betfair pools are still pitiful. There's no way anyone can turnover 40k a week on NZ betfair without taking crazily low prices.

[RodHill 0]

He must be betting Australian racing on betfair then, because New Zealand betfair pools are still pitiful. There's no way anyone can turnover 40k a week on NZ betfair without taking crazily low prices.

You are so right there. Average total turnover per race on NZ racing, is still only at $2K per event (win and place). For 50 odd races per week, that is a total of only around $100K. And the odds on bf for NZ, are 'generally' rubbish anyway.