Jobs 'risk' As Punters Ditch Tab

The Sunday Age

Sunday October 26, 2008

TOM REILLY

INTERSTATE bookmakers are pocketing millions of dollars that would otherwise be used to fund horse racing in Victoria, in a wagering war that senior industry figures claim could threaten the future of the sport and cost jobs.

The Victorian TAB - which is required by law to return a portion of its profits to the racing industry and provides 90% of the funding behind the state's horse, harness and greyhound racing - estimates it is losing bets worth about $40million a year to Northern Territory-based corporate bookies.

As more than 34,000 racegoers packed Moonee Valley to watch Maldivian win yesterday's Cox Plate, racing administrators claimed that questions over the future funding of the industry had reached crisis point.

"There's no doubt that racing is at a very critical time in its history, certainly the most important juncture in the 30 years that I've been involved in the sport," Victoria Racing Club's chief executive Dale Monteith told The Sunday Age.

The core of the issue is the viability of the industry's cash cow, the TAB's tote wagering system - in which all gambled money is put in one pool and divvied up depending on the number of winners, at no financial risk to the TAB.

The corporate bookies are now going head to head with the TAB, not only offering fixed odds but - since 2006, with government consent - the potentially more lucrative tote odds. Often, they entice punters to place their bets out of Victoria with offers of an extra 5% on top of their wager - and more gamblers are taking the bait.

While the Tabcorp-operated TAB, which has a monopoly on pool betting in Victoria, is required by law to put nearly 5 cents in every dollar bet back into sport, corporate bookmakers return less than 1 cent in every dollar.

So if the trend for punters to bet interstate continues, the horse racing industry - worth $2.1billion to the Victorian economy - will be severely compromised, according to senior racing figures.

Leading Melbourne trainer Rick Hore-Lacy believes "if the TAB is crippled then it follows that the racing industry will be crippled".

"If the tote turnover goes down as a result of clients being skimmed off by corporate bookmakers ... there will be an immediate impact on prize-money and that will lead to owners leaving the game and then breeders and other industries will suffer. Ultimately lots of jobs will be lost," he said.

But the bookmakers, who operate online and phone betting services, say the TAB has become an inefficient model that can't compete in the market and is only concerned about its own profits.

Alan Eskander, of Darwin-based bookmaker Betstar, said he and his colleagues were not jeopardising the Victorian racing industry - which employs 50,000 people - and were willing to pay their way.

"The reason the TAB can put its higher percentage into racing is because it runs on a risk-free, profit-guaranteed model," he said. "They get a huge take out of every dollar whereas bookmakers run on very tight margins ... (But) we are willing to pay a price that's fair."

However, David Moodie, chairman of the Thoroughbred Racehorse Owners' Association, said any betting money leaving Victoria was bad for the industry. "In the last 10 years prize-money has stagnated while costs have almost doubled," he said.

"At the moment Australian racing is some of the best in the world and that's a lot to do with the way it has traditionally been funded."

In accordance with its legal obligations, Tabcorp pumped $210million from its betting turnover back into the industry in 2006-07, and an extra $75million from its pokies business.

Tabcorp managing director of wagering Robert Nason says by not acting to stop wagering funds from flowing out of the state, the Government is "allowing the golden goose to be killed".

Tabcorp wants the Government to use legislation that is already in place to stop bookmakers from offering tote odds. It is also insisting that both the Government and the industry's governing body, Racing Victoria Limited, demand a bigger return on the money bet on Victorian racing with interstate bookies.

Tote betting was privatised in 1994 with Tabcorp paying more than $597million upfront for the licence to run an exclusive pool-betting wagering service in Victoria, as well as a half-share in the profitable pokies gaming business.

But that contract expires in 2012 and there are serious doubts about how the sport will be funded after that.

Although Racing Minister Rob Hulls has said the State Government will ensure the racing industry will be funded "no less favourably" after 2012, it is unclear how he plans to achieve this.