8
Race Fields
Legislation
Sydney Morning Herald
Wednesday 2/2/2011
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It's a gamble, and there's a lot riding on a High Court
decision on online betting
example of the wagering operator
Sportsbet, based in the Northern
Territory, which was acquired in
[in the campaign] because it was
affecting the small retailers. It
2005 for $250,000 and is now valued
at $338 million. The company's pro doesn't affect me. Ninety-nine per
fit last year was $20.3 million, a
cent of my sales are not affected.
People don't buy fridges, TVs and
figure expected to grow significantly
washing machines from overseas on over the next two years.
Betting on sports such as the
the internet."
But he concedes he has a lot to
NRL, AFL and cricket now accounts
lose if the High Court overturns the
for 11.7 per cent of all Australian
Federal Court decision, in effect
wagering and is growing quickly,
rejecting the turnover tax.
$2.6 billion having been spent last
Harvey, now the sole owner of the
year.
Magic Millions thoroughbred sales
Those sports gratefully take sponand auctions, is one of the biggest
sorships from the corporate bookinvestors in the Australia racing
makers, or a share of revenue based
industry, whose prize money has
on gross profits.
declined as a proportion of betting
Vlandys believes they are being
revenue as the corporate bookies
ripped off. "Any cost of acquiring the
drain money away from the TAB.
product from the sports could be
Corporate bookmakers can offer
met by the wagering operators
better prices to punters because they themselves with a minimum flow on
operate on lower margins than TABs
effect to punters," he says.
do. Because they are based in the
"The product fees are merely a
Northern Territory, they pay lower
necessary cost of the business, and
taxes, and theypay lower product fees unfortunately these operators have
back to the racing industry.
based their business models on the
Harvey says: "If the High Court
fact that they have not been paying
rules the other way, it will be catafor that product in the past."
strophic for the racing industry.
The chief executive of the NRL,
"If prize money is halved it would David Gallop, said most of the deals
weigh heavily on the minds of the
done by the league and its clubs
major players whether to stay in the were short-term, although
industry. Prize money must increase Centrebet has signed a five-year
five times for us to stay in."
deal with the Penrith Panthers team
The chief executive of Racing
for the naming rights to its home
NSW, Peter V'landys, says he does
Z
ground, Penrith Stadium.
not accept the argument the
Should Sportsbet's application for
corporate bookmakers cannot
special leave to appeal to the High
afford to pay more.
Court be unsuccessful, Gallop
"The claim that a turnover-based expects a review of arrangements
fee would increase the costs to the
with wagering operators.
punters is not necessarily correct.
Lawyers for the corporate bookCorporate bookmakers are already
makers are confident of victory,
generating significant profits which believing the three Federal Court
are increasing yearly." He cites the
judges erred in law.
V'landys says: "We are confident
the appeal will be declined."
pay GST in Australia.
He says: "I only became involved
-11
ROY
MASTERS
of the big battles in
sport are fought in the
Many
courtroom, rather than
on the playing field. A
verdict in the next round of one such
battle will be delivered in the High
Court on March 11. The issue is
whether the Northern Territory's
licensed online bookmakers and
Betfair must pay a product fee based
on turnover, rather than revenue.
Should the High Court uphold a
decision of the full bench of the
Federal Court in November allowing
Racing NSW to impose a 1.5 per cent
tax on turnover from wagering on its
race fields, other sports are certain
to demand the same fee for gambling on their events.
Betfair likens the fight to that
between the bigAustralian retail
chains and overseas websites where
goods are not subject to GST on
purchases of less of $1000.
They equate Tabcorp, with its
2000 outlets in NSW alone, with the
executive chairman of Harvey
Norman, Gerry Harvey, and themselves with the websites offering
better deals for customers.
Harvey, who has led the retailers'
fight, rejects the analogy, saying:
"That's drawing the longest bowl
have ever seen. Their imagination
stretches wide and far."
He says he is bewildered by the
public's vitriolic reaction to his
insistence that people who buy from
online retailers based overseas must
__-o
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Sydney Morning Herald
Thursday 17/2/2011
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NRL and the bookies: why the floodgates
have been opened and the clubs are awash
A change in approach last year has led to a sudden
influx of cash. writes Chris Barrett.
January 14, when the
Herald reported the
Panthers were making lucrative sporting history by
renaming their home ground
Centrebet Stadium, not a week has
gone by without an NRL club
jumping into bed with a bookmaker, casino or both.
The Broncos have landed the biggest of the bunch- a $2 million deal
Since
with Sp ortingb et. Souths are with
Star City, Melbourne with Crown,
Manly with Centrebet. You get the
drift. The trend is not coincidental expect a slew of forthcoming spon-
sorships, associations and perhaps
even part-ownerships to come,
with once well-marked boundaries
to be continually stretched.
The reason for the game's summer of love with what was once the
dirty dollar is twofold. The NRL, like
every other major sports code in the
country, realised some time ago
that they could no longer sit idly by
and with pockets emptywhile betting agencies made a fortune on
their game.
Quite simply, income from gam-
bling companies- alongside a new
television-rights package the officials hope will hit $1 billion-is
potentially le ague's greatest cash
cow. Sources say annual turnover
across Tabcorp, Unitab and corporate bookmakers such as Centrebet
and Sportingbet has reached $1 billion. Some say even more.
The NRL's slice of that large pie is
this: they have a three-year deal
with the TAB, worth upwards of
$1.5 million a year, a figure that
encompasses intellectual property
product-fee payments from that
company as well its status as an
NRL sponsor.
Then there are 15 contracts,
nearing their end, with the Northern Territory-based corporates and
Betfair. These integrity agreements
Keep to one side for a moment the
NRL's TAB deal and consider that
with $1 billion in rugby league betting turnover, a 1.5 per cent chunk
would be $15 million.
On the existing 5 per cent of revenue model (industry experts say bookmakers generally run at a profit of
about 6 per cent) the income for the
are not for a dollar value but for
5 per cent of each firm's rugby
league betting profit.
So where do the clubs' individual
deals with the bookies come in? The
NRL last year relaxed its restrictions
on such sponsorship, dropping the
exclusivity out of its arrangement
with the TAB, and encouraging the
clubs to get in on the action.
The NRL stance is that it not only
increased the value of its contract
with the TAB - officials say "it's a
very good deal" - but opened up
further direct revenue streams for
the 16 clubs.
The argument from their detractors is just as compelling. It is that
the clubs have been left free to
negotiate commercial backing
from sources formerly forbidden as
away to counteract NRL agreements that significantly shortchange the game.
On the NRL's Tab corp contract,
signed last year, there is much sniggering behind the scenes about just
how good a deal itwas for the TAB.
Tales of naivety, ofwool being pulled
over eyes followed the negotiations.
"It is a disgraceful deal, "says one
industry source. It is also said that
some of the corporates have paid
the NRL nothing.
The criticism comes down to a
perennial debate, but one that is
presently centre of attention in the
High Court: that of turnover versus
profit. Racing NSW's legal fight over
the race-fields legislation and a
demand for 1.5 per cent of wagering
operators' turnover has administrators of the NRL, AFL and other
codes watching closely, having as a
group devised the 5 per cent of profit principle three years ago.
It does not take a mathematical
genius to realise the turnover
model, with racing as the example,
is wildly more valuable than the NRL
and others' 5 per cent slice of profit.
NRL is $3 million. NRL critics would
argue bogus deals have cost them
$12 million a year and much more
when bookies' company betting
taxes, retainers to big punters and
myriad other costs are included.
That assertion, it should be noted,
ignores the fact that profit margins
for bookmakers on rugby league or
any other sport between two combatants are far less than in racing,
with its multiple runners. "I
wouldn't have thought anybody
could justify asking for a piece of
turnover," bookmaker Gerard Daffy
says. "There would be very few
bookmakers in the world that could
sustain [a payment] like 1.5 per cent
of turnover on a sporting event."
It also overlooks that an NRL
demand for a racing-like turnover
rate would potentially drive betting
offshore where the game has no jurisdiction to regulate. And NRL heavies are quick to remind that before
2008 the game was reaping nothing
from the boom in league betting.
What is certain is that the NRL,
and other sports, will not settle for
anything but the best deals next
time around. The TAB contract runs
unti12013, the NRL's agreements
with the corporates are up for
renewal, and with racing's High
Court result pending, those are
expected to be rolled over for only
one more year. If racing prevails
and sets the precedent for a turnover model rather than profit, you
can bet rugbyleague will want in on
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Sydney Morning Herald
Thursday 17/2/2011
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nrrers and losers ... left, how the
Nora. has reported the recent slew
of betting controversImard deal.
The Broncos haw shred the latest
and Iwqnt. $Zra sgreemsra with
SportInqbet.
.00.; Anty 26;eli
BETTIMG
UNDE2 THE
SPOT LIM
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Sun Herald
Sunday 20/2/2011
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Published: ------S
HARNESS RACING
t
rt:.)
V1CHAEL
COX
,
It's not Christmas yet - HRC's boss
keeps mum on boost to prizemoney
Harness Racing Club CEO
John Dumesny says those anxiously waiting for his club's
plans on how it will spend its
new-found wealth have to wait until an
information day on March 13 at Menangle.
After the $150 million sale of Harold Park
was finalised late lastyear, Dumesny promised a "substantial" boost in prizemoney
and new stabling facilities at Menangle.
Some are growing restless and want
more details. Interstate trainers have
indicated they will move to Menangle but
want to know what facilities will look like
and how much theywill be racing for on
the 1400-metre super track.
"I'd like to know what I'm going to get for
Christmas, but I have to wait for Christmas
Day- they're not going to bring it forward," Dumesny said.
Another reason details cannot be
released, officials say, is so that more
details of the racefields legislation court
case can be considered. A positive outcome would mean even more money into
the prizemoney pool and for infrastructure development.
NSW
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Daily Telegraph
Wednesday 23/2/2011
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Region: Sydney
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Blackie's
pacing
himself
to return
Brent Zerafa
Harness racing
BLACKS A Fake's Inter Do- horse to contest six finals.
make a decision from there."
minion resurgence continued
The barrier draw for the
with an impressive track work- THE field for the Group One Ladyship Mile and NSW Oaks
out yesterday.
Ladyship Mile has all but been will be conducted during the
Trainer-driver Natalie Ras- decided with the NSW Har- Australian Pacing Gold Yearmussen said the four-time ness Racing Club to issue the ling Sales at the Newmarket
Inter Dominion winner work- final invite at Harold Park on complex on Sunday.
ed strongly at his first hit-out Friday night.
since suffering a second bout
Impressive Robin Dundee MELBOURNE filly Our
of atrial fibrillation during Stakes winner Pacific Playgirl Molly Finn is expected to start
trackwork last Saturday week. waltzed into the field after her a short-priced favourite in the
"I was really happy this blistering win last Saturday in fillies division of the Linden
morning," Rasmussen said.
a Australasian mares record of Huntley Little Memorial at
"He felt terrific and things lmin 51.8sec.
Bulli on Saturday night after
are back on target."
"We have conducted three drawing barrier one.
Rasmussen said Blacks A automatic invitation races
Our Molly Finn cruised to
Fake would have a precaution- over the past few weeks there- victory in her heat last Thursary ECG today.
fore no interstate connections day in a time of 2min 1.04sec,
"I'm sure he'll be fine, but can complain that they didn't close to four seconds quicker
it's just to make sure he's get an option to impress," said than rival heat winners.
come through this workout NSWHRC chief executive
well," she said.
John Dumesny.
"As long as he gets the OK,
"Those connections who
he'll work again on Thursday did elect to contest the feature
and Saturday and then I'll take mares races will get one more
him to a trial next Thursday.
opportunity this Friday. How-
THE NSW Harness Racing
Club will conduct a major
industry information session
at Menangle on March 13 to
outline the proposed prize-
"If he comes through that ever, there will be no auto- money increases, which are set
well, there's a race for him matic invitation to the winner to kick in from July 1, the effect
of the race fields legislation
[of the Form 700 Pace].
Blacks A Fake is the only "We will look at this Friday and the master plans for the
horse to have won four Inter and the performances in the new training facilities.
Dominion finals and he is past Ranji Bill, Teeny Teeny
about a week later."
trying to become the only and Robin Dundee Stakes and
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Sydney Morning Herald
Friday 25/2/2011
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Sydney Morning Herald
Friday 4/2/2011
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Betfair takes surprising role but
still must pay its fair whack
is now effectively
the paddock enclosure,
for prices on Australian
racecourses, while rails
betting rings, once a hive of turf
action, compare more with the
dreary leger enclosures of
yesteryear.
Betfair
Betfair Australia, celebrating its
fifth birthday, plays a significant
role but has probablynot been as
lucrative as the company planne d.
The betting exchange, shunned
and abused when launched here,
is now the best market guide, an
invaluable aid to punters.
Andrew Harding, the Australian
Racing Board chief executive, an
opening bat for the home side,
accepts Betfair plays a worthy role.
Naysayers boomed racing as we
knew it would founder due to the
betting exchange, as Betfair would
encourage the flow of "dead-uns"
with crazed insiders swamping the
internet site with lays. "For me this
is the biggest threat to racing's
integrity and it is a worldwide
threat," unleashed the heavyweight Winfried EngelbrechtBresges to the South China MorningPost in 2003.
Betfair has had an impact but
not as anticipated. "The integrity
thing, a worry at the time, hasn't
transpired to anything to be concerned about," Harding admitted.
"The undertaking they [Betfair]
gave to provide information has
proved entirely genuine.
"But their market share on
industry finances is limited. Look
at their own forecasting when they
applied for a licence in Tasmania
it's fallen well short of where they
wanted to be. Australia is a very
different market from the UK
because we have always had reasonably strong competition
between the bookmakers and the
tote. Bookmakers have had their
ownwayin the UK. Market opportunities Betfair had there really
didn't exist inAustralia, explaining
the muted growth so far. In terms
of the market [in races], bookmakers scale their books on what is
happening with Betfair."
Harding sees the March 11 High
Court appeal by Betfair and corporate bookies, against a ruling by the
Federal Court in November allowing Racing NSW to impose a 1.5 per
cent tax on turnover from wagering
on its race-fields, as "the most significant thing to happen in racing
since the introduction of the TAB".
Not, though, because of Betfair.
"It's going to be the core funding
of racing," he explained. "Doesn't
matter what sort of betting operation you are running, the industry
will determine what you will pay."
However, the corporates are
the target. "They have gone from
$75 million in 1999 to $3.2 billion, being an irritant 10 years ago
to a fifth of the wagering," Harding explained. "That's where the
action is. I don't think the High
Court is going to make a great
deal of difference even if all
aspects of the race-fields legisla-
tion is upheld to what Betfair
means to the industry."
Despite the Harding submission, Betfair is beaming about the
first five years with its Australian
operation generating around
$144 million in revenue since
2006. "The business now has more
than 160,000 customers inAustraha and New Zealand and has
introduced over 150,000 international customers to Australian
racing and sports products," Hugh
Taggart, the Betfair media and
communications manager,
exuded. "It accounts for about
10 per cent of the online wagering
market and less than 2 per cent of
the overall wagering."
When it comes to spin bowlers,
Betfair has a bevy. Mark Davies,
varying flight and pace, opened
the attack five years ago and Taggart, on a more receptive pitch
perhaps, maintains the attack.
"The business now sponsors
some 29 race clubs across the
country, maintaining commitment to help fund the Australian
racin industry at all levels," Taggart delivered. "The sponsorship
portfolio includes agreements
with all three codes of racing from
the top end down, including flagship deals like that of Betfair Park
and non-TAB clubs like Dunkeld.
"We want to extend that sponsorship to NSW, which continues
to adopt a protectionist view that
restricts local clubs from access-
ing additional revenue streams
from new entrants. Betfair continues to fight for a fair go ..."
This is where we differ. I figure
it impudent for a Pommy team,
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Sydney Morning Herald
Friday 4/2/2011
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albeit with backing from the
House of Packer, to tell us what
they are going to pay for operating on Australian racing. Showing
unusual restraint, I didn't use the
term "bludgers".
"In the pastyou've noted that
you wouldn't have a problem with
us if we paid our way," said Taggart, readying to deliver a wrong
did not to RNSW.
"We had insisted, however, that
we were prepared to pay RNSW
for every race we covered even
before we were licensed and
before we had to legally pay anything to RNSW."
Again it's what they are prepared to do, but Taggart justifiably warned about "the alarming
decline in their share of the
wagering dollar. Racing's combined share of the Australian
gambling market has fallen from
35 per cent in 1991-92 to just 10.5
per cent in 2005-06. This indicates that racing's market share
suffered its greatest setback well
before betting exchanges and
'un. "We have always maintained
that we would. You'll be aware
that traditionally, wagering operators inAustralia paid all their
product fees and taxes to the state
in which theywere licensed. We
paid our product fees and taxes to
Tasmania and NSWTAB paid its
to NSW Under that [gentlemen's]
agreement the NSWTAB did not
corporate bookmakers existed ...
pay any product fees to RVL
[Racing Victoria Limited] or any
other state racing body just as we
"As of today, 167,671 interna-
That's a significant number of
punters that may not have otherwise been exposed to Australian
racing and sport. Only 23 per cent
of Betfair's customers on NSW
racing are from NSW. The
remainder comes from overseas
(32 per cent) and interstate
(45 per cent).
"Given the amounts we have
generated in fees and taxes and
the number of customers we have
exported Australia's racing
product to, it's difficult to see why
such resentment has underpinned our Australian existence."
Betfair has been excellent value
for the local punter, who gets little consideration, with the true
and best market guide.
Many happy returns on Monday.
tional customers have bet on
Betfair's Australian products.
Splashing out ... Betfair has sponsored race clubs. Photo: Paul Rovere
'The integrity thing ... hasn't transpired to
anything to be concerned about.' Andrew Harding
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Sydney Morning Herald
Friday 4/2/2011
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Section: Sport
Region: Sydney
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Focus on racefields appeal as racing loses on TAB payout
Craig Young
THE legality of the racefields legis- impacting on turnover but we are "turnover in the Northern Territory
lation took on a new importance currently working on a plan to alone now exceeds $5.5 billion".
Perth Racing believes the cutting of
yesterday, with Tabcorp announ- amend that problem."
The next round in the racefields prizemoney "is prudent and necescing a decrease in its distribution to
legislation battle takes place in the sary as a result of a set of circumthe three NSW's racing codes.
Tabcorp produced a half-yearly High Court on March 13 following the stances which is placing the racing
profit of $272 million after tax but its Federal Court's endorsement of industry under considerable stress".
return to NSW racing was $124.6 mil- Racing NSW's right to charge wager"During the past decade, income
ing operators 1.5 per cent of turnover. derived from on-course bookmakers
lion, down by 1.7 per cent.
Sportsb et and Betfair have sought has reduced from $3.3 million to $0.5
The Victorian industry received an
increase of 2.5 per cent, with the leave to appeal to the High Court million for the 2009-2010 year, which
three codes down south set to carve
up $177.8 million.
"I totally understand the reduction
in Tabcorp's return," Racing NSW
chief executive Peter Vlandys said
against that ruling.
will be followed by a further signific-
Earlier this week, Perth Racing ant reduction in the current trading
announced a cut in prizemoney, year," it said.
with its business model deemed "For the first six months of the
Made quate.
2010-2011 racing year, there has
yesterday. "There is a substantial "The continued growth in corpor- been a significant reduction in onincrease in competition in the wager- ate bookmakers' turnover, which course patronage and wagering,
ing market while Racing NSW has delivers only a fraction of the return which has had a negative impact on
to stakeholders provided by the off- the income streams of all racing jurcourse TAB network, will continue isdictions in the country of between
to erode stake levels as we know 10 and 15 per cent."
them today," Perth Racing said.
problem in Sydney racing is also Chairman Ted van He emst said
sustained, in the last six months, an
extraordinary amount of lost meetings, especially on the north coast.
"Unfortunately, our field size
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