News

Turnover model to be retained in Victoria

10th May 2013

*Racing Victoria - Media Release - Friday 10 May 2013

Wagering operators will pay under a modified turnover model to bet on Victorian racing for the 12 months from 1 July.

Racing Victoria (RV) has today announced revised product fee policies to be applied to all wagering operators for the publication and use of Victorian thoroughbred race fields from 1 July 2013.

Following a review of its Race Fields Policy, RV has determined that its turnover-based product fee policy will be retained until at least 30 June 2014 with some modifications to the way it is applied.

RV has applied a turnover-based product fee since 16 August 2012. Previously wagering operators paid 10% of gross revenue, rising to 15% in the months of October and November.

The turnover-based model has returned $44 million in product fees to RV from interstate wagering operators in the eight months from August 2012 through until the end of March 2013 – an increase of 25% on the previous year-to-date.

In the same period average gross margins have increased across all wagering categories, with corporate bookmakers’ turnover on Victorian thoroughbreds up 14%. Turnover across the national TAB market, particularly premium customers, has been impacted by substantial structural changes.

In announcing its policy for the 12 month period commencing 1 July 2013, the RV Board determined;

• That the fee will remain at 1% of turnover for the first $5 million of turnover per annum and at 1.5% on turnover in excess of $5 million per annum;
  
• That a premium rate of 2% of turnover will be applied to the total turnover for all races at any Victorian thoroughbred meeting which includes a Group or Listed race at any time of year, thus replacing the current premium rate which applies to all meetings during the months of October and November;
  
• That turnover for betting exchanges will be assessed on the aggregate of net customer winnings rather than the aggregate of all bets taken on the ‘backer’s side’ of the exchange as it is a more appropriate measure of the volume of customer transactions; and
  
• That, for the purposes of clarification, wagering operators will be required to include all ‘free bets’ as turnover and will be precluded from claiming a deduction on bets taken for any ‘money back’ promotions.

RV Chief Executive, Bernard Saundry, said that whilst the turnover-based model had significantly increased returns since its introduction, RV retains an open mind to its long-term policies.

“The Board has elected to retain a turnover-based model with some modifications for the 12 months commencing 1 July 2013 as our extensive review has indicated that it offers the best return for the industry in the short-term,” Saundry said.

“The review found that the wagering landscape is rapidly evolving with a flattening of the overall wagering market, the arrival of new entrants and on-going consolidation of the corporate bookmaker sector and the continued impacts of structural changes to interstate TABs.

“Whilst we have seen a 25% year-to-date increase in returns under the turnover-based model, the Board will grant approvals for one year only as it retains an open mind to the optimum long term model for the industry based on the evolution of the wagering market and future betting trends.”

Saundry stated that the change to the application of the 2% premium turnover rate would see it applied to 58 race meetings in 2013-14 – down from 91 meetings in the current approval period.

“We believe this better aligns the policy with the state’s premium racing product, that being Group and Listed meetings like Super Saturday at Flemington in March, rather than capturing all standard country meetings in October and November,” Saundry said.

Saundry also explained that all wagering operators will be required to submit more detailed and timely betting data to RV for the new approval period.

“We have a very cooperative relationship with the wagering operators and are looking to strengthen that to enhance our analysis and bet monitoring services,” Saundry said.