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“Turnover fee”?

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Replies: 88
By:
Hal
When: 05 Apr 12 08:41
I can recall the Victorian breeeding lobby critical of RVL after the 3-0 Federal Court judgement. This caused RVL to backtrack and issue press releases to the effect they wished NSW Racing every success and would await the High Court case with the inference that they would go back to Betfair and renegotiate. IMO they will following NSW Racing.

If they did do a deal with Betfair, it would be a disaster for NSW Racing.
By:
HarryHindsight
When: 05 Apr 12 08:53
They would have to wait till after the carnival if they are going to do it imo. I hope they do, if not we are all stuffed as i doubt betfair will survive here. Promote VIC racing and NSW can run non totes in front of their 150 mill grandstand....
By:
CHANTECLARE
When: 05 Apr 12 08:59
The markets for Saturday are well up and running.
They wont do it this week. imo.
By:
frog2
When: 05 Apr 12 10:42
Just to put some figures on it by looking at the UK. In the UK the levy for racing is 10.75% of gross profits from revenues from UK customers betting on British horseracing. Last year this figure was £6.5m. This implies that commission charges from UK customers was about £60m.

Last week available (19-25march) the total matched on UK racing was £177m. These means backed 'turnover' is £88m. Times this by 52 we get £1.3bn. This was taken from a quiet week with relatively low turnover.

If UK racing demanded 1.5% of this turnover Betfair would have to pay £69m a year. This is greater than their total commission revenue from UK customers betting on UK racing. THe money does not exist. The 'turnover' figures are meaningless. It is greater than 2010/11 total levy from all bookmakers which was £59.5m.

I hope that NSW racing is not merely working out its predicted revenue looking at current turnover figures. If they are they will be very disappointed with the results. If you charge on profits you encourage firms to maximise profits. This means they offer value to the customer.

If you charge by turnover it encourages betting companies to decrease turnover and raise margins. This is bad for the customer and bad for racing for its position in the rest of the gambling market. It will make betting on NSW racing expensive compared to racing elsewhere and more importantly compared to other sports and casino games. THe betting companies will promote other forms of betting instead.

Charge too much and racing will lose its market share forever.
By:
Winker
When: 05 Apr 12 11:26
Can still run a loss on some products, so be it if NSW racing makes them a loss, anything we win will be turned over on the sports betting anyway...
By:
deejaybee
When: 05 Apr 12 11:39
Why doesn't RVL commit to Gross Profit model, and with Betfair, target the top half a dozen players in Sydney to move their operations to Victoria. Last person to leave could turn off the lights.
By:
MugsGame
When: 05 Apr 12 14:09

Apr 5, 2012 -- 10:42AM, frog2 wrote:


Just to put some figures on it by looking at the UK. In the UK the levy for racing is 10.75% of gross profits from revenues from UK customers betting on British horseracing. Last year this figure was £6.5m. This implies that commission charges from UK customers was about £60m.Last week available (19-25march) the total matched on UK racing was £177m. These means backed 'turnover' is £88m. Times this by 52 we get £1.3bn. This was taken from a quiet week with relatively low turnover.If UK racing demanded 1.5% of this turnover Betfair would have to pay £69m a year. This is greater than their total commission revenue from UK customers betting on UK racing. THe money does not exist. The 'turnover' figures are meaningless. It is greater than 2010/11 total levy from all bookmakers which was £59.5m.I hope that NSW racing is not merely working out its predicted revenue looking at current turnover figures. If they are they will be very disappointed with the results. If you charge on profits you encourage firms to maximise profits. This means they offer value to the customer. If you charge by turnover it encourages betting companies to decrease turnover and raise margins. This is bad for the customer and bad for racing for its position in the rest of the gambling market. It will make betting on NSW racing expensive compared to racing elsewhere and more importantly compared to other sports and casino games. THe betting companies will promote other forms of betting instead.Charge too much and racing will lose its market share forever.


Good post.

I would say that BF would have made this case, as they did when the UK (BHB tried to ask for the same deal a couple of years back). I cannot believe that the Aus court didn't grasp this.

By:
Josh-T
When: 05 Apr 12 14:22
You may have seen this boys and girls...

http://racenet.com.au/news/789/78939.asp?c=1

I think as said above it's prob unfortunate it's the carnival. Otherwise the taps would have been turned off.

This announcement surely means there's little of no dialog between BF and RNSW which was my one great hope. In light of that - pull the pin!
By:
Josh-T
When: 05 Apr 12 14:40
sorry..missed the boat in the other forum... a Good Friday to all.
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