Punter's win out with competition but it might be less than productive
Sydney Morning Herald
Monday October 26, 2009
The sooner Tabcorp shuts its retail outlets, the better for all concerned. No more local TAB, no PubTABs or ClubTABs, just online wagering. Keep open the call centre, and let the punter dial up for a bet.Betting over the internet or on the "eau de cologne" is the way to go. The Federal Government's Productivity Commission reckons the outmoded TAB still has a monopoly and is ripping off its customers. Ripping 16 to 20 cents out of every dollar invested by the punter is downright robbery.The Productivity Commission's report into the national wagering landscape was released last week.What timing? Right smack in the middle of the multimillion-dollar spring carnival, which is a financial bonanza on many fronts.That, and the biggest annual sporting event in the country. The 46-page wagering report, which drew on 264 submissions, was dropped on the racing industry when it is in the middle of its annual showcase.Everyone, plough into the report. Forget about headline-hogger Bart Cummings and his fellow trainers, the horses, the jockeys, the Cox Plate, the Victoria Derby. Heaven forbid we focus on the Melbourne Cup. No, let's overhaul the wagering market.As expected from a body such as the Productivity Commission, which doesn't mind a scorched earth policy, the customer comes first. Noble indeed, for when it comes to wagering it, is all about the punter. The corporate bookies have got it right with the low-margin model. The Productivity Commission is a huge fan of this. Low margins mean the customer, the punter, isn't being fleeced.Corporates are driving the market. They are the innovators. No two ways about that. Tabcorp's from the old school. Its computer system arrived about the time the dinosaur departed. It is slow on the uptake. Introducing new betting types for the punter takes what seems an eternity.Yeah, TABs treat customers with contempt. It is all about looking after its shareholders. The various state Governments earn plenty out of them, too. So, too, the racing industry. They are its financial aorta.Not to worry. The corporates and the betting exchange mob are going to weigh in and pump hundreds of millions into the racing industry. The Productivity Commission knows what competition is all about.Competition is good. Bookies versus the TAB. Bring it on. In the fight for customers, the consumer is the winner. Don't worry about racing.The commission is a fan of wagering operators returning a percentage of gross profit to the racing industry. No turnover tax, it is archaic.So the TAB had better start closing its retail outlets. To stay in the low-margin wagering revolution, it can save a motza on its retail arm and slash its 16 per cent take-out rate. The corporates don't have such overheads. These types are phone and internet gurus.Cyberspace is the new world. It has allowed the corporates to treat the punter with dignity. It is not fleecing them. Not like that dirty rotten TAB in a suburb near you.The corporates have always said they are willing to pay a fair slice of earnings. Pay on gross profit. Pity the racing industry if they have a losing year. But it is all about competition. It is good.It's nothing to do with services. Such as punters being able to walk into the local TAB, PubTAB or ClubTAB, and have a bet.What's more, they can be paid straight away. You can walk in with a small wad and leave with a whopping wallet. That's service.You have to wait to get paid by the corporates. "Congratulations for backing a winner, you'll get your money in three days' time. We'll deposit it in the bank." No, just kidding.The corporates have certainly found an ally in the Productivity Commission. That's got to be good if the punter, the customer, is the winner. Forget about racing, it is all about the punter.cyoung@access.fairfax.com.au
© 2009 Sydney Morning Herald