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Productivity Commission 3: Racing NSW Response

Thursday, 24th June 2010

Racing NSW chief executive Peter V'landys issued a statement commenting: "Punters are not the winners as claimed by supporters of the Productivity Commission's report. The real winners are in fact wagering operators & professional punters. The Commission has accepted the argument that low-margin operators provide better value for punters, but I have not seen anything in the report to justify this assumption. The margins do not appear to affect the ultimate price, as evidenced by the fact that the final dividends declared by high-margin operators throughout Australia equate closely with the starting prices displayed by bookmakers. What happens is that the lower margins have little effect on the average recreational punter, but add considerably to the pockets of the professional punters who are able to take a greater share of the aggregate losses of the recreational punters." V'landys said the "implementation of the recommendations" contained in the report would have "dire consequences for the racing industry. As it did in its draft report, the Commission has concentrated more heavily on the interests & financial well-being of wagering operators, rather than on the interests for the racing industry & 50,000 people employed in the industry. In fact, the following quote highlights the Commission's lop-sided view: In any event an industry ultimately exists to meet the demand of consumers. . . . 'Not for its own sake'." V'landys added the Commission has also "disregarded the input into the racing industry by racehorse owners, which currently stands at some $250 million & upwards just for training expenses, on the basis that they only engage in the industry as a recreational pursuit. Irrespective of their intentions, why should these people be expected to fund an industry which is used by wagering operators to accrue huge profits? A similar situation exists with the many other persons engaged in the industry, such as trainers, jockeys, strappers & race club employees." V'landys continued: "The Commission has recommended the NSW Thoroughbred & Harness Racing Industries, along with their Queensland counterparts, should sit down with wagering operators & negotiate a new fee structure based on gross revenue. I have stated on numerous occasions the NSW thoroughbred racing industry has opted to impose fees based on turnover so as to ensure that all wagering operators contribute equally towards the industry, irrespective of their location, their mode of betting or their business models. We are currently engaged in ligation on this matter with at least one operator & we will continue to pursue the matter vigorously. Interestingly, the Federal Court has dismissed a challenge commenced against us by the Tasmanian-based company Betfair which was the only challenge based on the gross profit vs. turnover methods of levying fees. It should also be noted that the Federal Government has totally shown no interest in these recommendations to date. Racing NSW is pleased to see the draft recommendation relating to the repeal of the Interactive Gambling Act has not been carried forward into the final report. This action would have caused immeasurable damage to the racing industry & would have created major problem gambling issues. I note that even the lesser recommendation to allow on-line poker has not been adopted by the Government. Any legalisation of on-line casino-style games in homes would cause an avalanche of problem gambling meaning the harm minimisation recommendations on poker machines would become superfluous."

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