News

Report backs wagering competition

21st Oct 2009

The Age - Patrick Bartley - Thursday, 22 October 2009

THE Federal Productivity Commission report yesterday challenged the turnover-based model being proposed by Racing NSW and also criticised the TAB's monopoly in the wagering market.

The Federal Government should also remove online gaming bans and develop a regulated internet industry, the draft report said.

It savages the turnover-based model being prepared by Racing NSW and is highly critical of the dominance of the TABs in the wagering area.

And the report also maintains that ''the Australian Government should request that the Australian Competition and Consumer Commission examine any adverse implications for competition associated with the ownership arrangements for Sky Channel''.

It also vindicates the arguments put by Betfair that a gross revenue funding model is the most appropriate way to fund the industry.

The report claims that competition between wagering operators can only occur efficiently under a gross revenue model.

''The best funding model … is one that emulates the outcomes that would be observed in a more competitive market,'' the report said.

''This involves generating the mix of value, quantity, quality and variety of races and wagering product most desired by consumers. In particular, the future health of racing and wagering is dependent on a funding model that can accommodate lower-margin operators''.

The report then said: ''Much of the wagering industry is characterised by operators whose prices [take-out rates] substantially exceed that of other forms of gambling. In the long term, the racing and wagering industries will be better served by a funding model that allows wagering operators to offer comparable prices to the alternative gambling products they are in competition with.''

The chief executive of the Australian Racing Board, Andrew Harding, said yesterday it was too early to comment on the report.

''The … report goes into considerable detail examining the existing structures regulating wagering and its relationship with racing, and makes a number of recommendations,'' he said.

"These are complex matters and the ARB will not comment on the commission's proposals until there has been an opportunity for the board's directors to adequately consider the … document and the full implications … for Australian racing.''

State and federal governments asked the commission to investigate the extent of problem gambling in Australia, with a focus on gaming machines. It found Australians spend about $18 billion a year on gambling, including $12 billion on pokies.

About 15 per cent of Australians gamble regularly, and problem gamblers make up about 10 per cent of those.