Tabcorp promises totaliser revitalisation in current financial year
Pari-mutuel turnover takes hit as wagering giant’s exclusive retail business suffers
Tabcorp management say they are committed to revitalising their flagging pari-mutuel product, the major betting medium which funds the Australian racing industry, but after years of posturing it remains to be seen when that will come to fruition.
The wagering giant, which holds the exclusive retail and totaliser rights for all states and territories except Western Australia, recently announced their 2019-20 financial year results in which the company took a significant hit as a result of Covid-19 and customers’ preference for non-totaliser products.
The migration to fixed odds betting and competition from corporate bookmakers, which provides a smaller return to principal racing authorities than that of the tote product, has escalated at a rapid rate in recent years and that has been exacerbated by the forced retail shutdown of Tabcorp’s bricks and mortar business due to coronavirus restrictions.
In the report, Tabcorp’s retail turnover plummeted by 27.9 per cent, which was partly offset by a digital turnover increase of 3.8 per cent to $5.4 billion.
Of that revenue, $1 billion was returned to the respective state racing bodies across the thoroughbred, harness and greyhound racing codes.
Of the combined Tabcorp-Ubet merged entity, overall racing turnover was down 7.5 per cent year-on-year and the totaliser betting decreased by 13.3 per cent.
The totaliser product was still responsible for 49 per cent of Tabcorp’s wagering revenue, with fixed odds racing making up 41 per cent. Sports betting and Trackside made up the other ten per cent.
IBISWorld senior industry analyst Tommy Wu said his research indicated that punters were continuing to migrate away from the tote product in favour of fixed odds and other betting options.
“The decline in the pari-mutuel business is putting a strain on the racing industry, especially given it’s a significant source of funding for the industry,” Wu told ANZ Bloodstock News recently.
“Not only are punters shifting towards fixed-odds betting, but they are also moving towards tote derivative products that also weighs on the share of pari-mutuel betting.
“There has been a lack of marketing for tote betting and younger punters are also more inclined to place horse racing wagers through the top tote products rather than the pari-mutuel betting.”
Wu added: “During the lockdown period, Tabcorp saw a shift in wagering activity towards digital platforms. Wagering on horse races remained strong as numerous global sporting competitions and leagues were suspended, including Australian sports such as AFL and the NRL.
“There was also increased interest in esports and novelty markets such as weather and interest rate movements during that time. Tabcorp’s bricks and mortar business took a hit as licensed venues and retail outlets were closed during the lockdown. The company also suspended licence fees for a range of venues, which is expected to have cost a reported $100 million in revenue over a three-month period.”
In a briefing after the release of the company’s annual report, Tabcorp managing director of wagering and media Adam Rytenskild admitted that the wagering and lotteries group had yet to implement promised totaliser initiatives.
“Pari-mutuel, we have been talking about pari-mutuel for a little while – I appreciate that. There’s three elements to what we’re doing with it,” Rytenskild said.
“One is pooling, and I know we’ve talked about pooling for a little while, but Covid has created a platform to accelerate that conversation and we’re well advanced in talking to the racing industry around the country about delivering greater liquidity through pooling, whether that’s two pools or one pool is yet to be seen, but that that’s very much in focus.
“It’s a big thing to achieve. It has been talked about for a lot of years. So, all I can say is … now that integration is largely done, the most important part of it, we’re very focused on that.”
The wagering executive blamed regulators for some of the delays in merging the SuperTAB and NSW pari-mutuel pools.
“We haven’t been unable to unlock the true benefits of Longitude at this point. I’ve called that out and .. we are still working on that,” he said.
“We need regulatory approval to be able to combine more than two pools … and then the benefits will unlock. But we’ve got other new tote products that will come in FY21 that don’t rely on Longitude and I think that will be very good. They’re well advanced in their planning and they will come in FY21.
“And then the third element is a combination of brand marketing and the data capability that we’ve built is now available to tote.
“The combination of those things will play a role in, I guess, the underpinning of (the) tote.”
Rytenskild did not speculate as to whether some of those initiatives involved lowering the take-out rate or margin on totaliser bets or offering rebates for customers placing pari-mutuel bets.
For instance, the New Zealand TAB, which currently has its own issues surrounding its sustainability and funding of the local industry, offers its high-turnover customers a rebate to incentivise them to bet through the pari-mutuel pools, which incidentally are commingled with Tabcorp’s SuperTAB pool.
The program has been in place for five years, while the tote-monopoly jurisdiction of Hong Kong offers its bettors a rebate of ten per cent on losing bets of HK$10,000 or more.
“The TotePlus rebate program has been in place for just over five years and only parimutuel bets (on all three codes) are eligible,” a TAB New Zealand spokesman said this week.
“TAB NZ and Tabcorp also have co-mingling parimutuel agreements as you correctly referred to. In addition to TotePlus, our elite customers receive many benefits such as a personalised service, exclusive promotions and other benefits.
“There are several hundred customers across the country who are eligible for these rebates and benefits.
“TAB NZ is committed to giving our customers an unrivalled choice of product which includes parimutuel markets with strong pools.”