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Lifted from champion picks
acing NSW Kills Off Cash Cow
By Scott Woodward, www.ChampionProfits.com
How many shop owners hang the closed sign up when they have people at the counter with money in hand waiting to buy their product? Not many, right?
If they do then they are either idiots and will likely go broke, or they have an agenda.
I have been asking myself why Racing NSW consciously imposed a tax law on the giant global betting exchange Betfair, when they knew that their business model would never survive such a hit.
Many observers may consider Betfair (BF) are just another bookie and who cares anyway, but they are not a bookie as they facilitate bets between two punters when one bets to win and the other lays to lose. BF survive by collecting a 5% (or less) commission from whichever punter wins his investment. Racing NSW should be collecting their fair whack from the profit that Betfair makes from their winning members, but in a staggering affront, they have demanded a 1.5% tax based on the turnover.
I asked Champion Profits trader Tony Hargraves for a print out from his trades today and you can quickly see that Betfair have no future in the exchange business as a partner with RNSW.
Tony worked on ten races and as usual won on all of them, but importantly he turned over $16,754 and made a profit of $320 which yielded BF $6.40 Gross Profit on Tony's trades, but because RNSW want 1.5% of the turnover, BF lose $251 from the business.
OK got it!
Betfair generate incremental income for the racing industry as their unique fun model has attracted many players to the fold, and thousands of "retired" punters have flocked back to the industry as they love Betfair. The BF business creates millions of dollars of exotic bets and bet backs for corporate bookies including the TAB.
Tony had $8,200 in bet backs that stemmed from his trades today, which RNSW also grab 1.5%.
So we have proved that Betfair cannot survive under the RNSW tax and that they attract incremental revenue and participants to the industry. So given that very clear and obvious statement is some government watch dog going to ask why?
Racing Minister George Souris must ask RNSW why have they actively killed off a cash cow? We all would like to know the answer.
acing NSW Kills Off Cash Cow
By Scott Woodward, www.ChampionProfits.com
How many shop owners hang the closed sign up when they have people at the counter with money in hand waiting to buy their product? Not many, right?
If they do then they are either idiots and will likely go broke, or they have an agenda.
I have been asking myself why Racing NSW consciously imposed a tax law on the giant global betting exchange Betfair, when they knew that their business model would never survive such a hit.
Many observers may consider Betfair (BF) are just another bookie and who cares anyway, but they are not a bookie as they facilitate bets between two punters when one bets to win and the other lays to lose. BF survive by collecting a 5% (or less) commission from whichever punter wins his investment. Racing NSW should be collecting their fair whack from the profit that Betfair makes from their winning members, but in a staggering affront, they have demanded a 1.5% tax based on the turnover.
I asked Champion Profits trader Tony Hargraves for a print out from his trades today and you can quickly see that Betfair have no future in the exchange business as a partner with RNSW.
Tony worked on ten races and as usual won on all of them, but importantly he turned over $16,754 and made a profit of $320 which yielded BF $6.40 Gross Profit on Tony's trades, but because RNSW want 1.5% of the turnover, BF lose $251 from the business.
OK got it!
Betfair generate incremental income for the racing industry as their unique fun model has attracted many players to the fold, and thousands of "retired" punters have flocked back to the industry as they love Betfair. The BF business creates millions of dollars of exotic bets and bet backs for corporate bookies including the TAB.
Tony had $8,200 in bet backs that stemmed from his trades today, which RNSW also grab 1.5%.
So we have proved that Betfair cannot survive under the RNSW tax and that they attract incremental revenue and participants to the industry. So given that very clear and obvious statement is some government watch dog going to ask why?
Racing Minister George Souris must ask RNSW why have they actively killed off a cash cow? We all would like to know the answer.
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Replies: 36
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i like Scott - love his NRL previews on You Tube too
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filthy trader
 turn off the exchange and just offer fixed odds imo |
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No new information in this article to be fair (pardon the pun).
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that's why traders will be killed off !!!
not the genuine layers or punters |
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It is probably the best I have seen it articulated to this point
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how many times do u need to be told?????????
The racing bodies, Vic, NSW and all the others dont give a toss about BF. They have stated all along since 2006 that u should not be able to back a horse to lose, and behind closed doors this is the way they ALL still feel. they dont give a toss that this will send the exchange model out of play in this country, they have achieved what they wanted at the very start back in 2006. BF pay pitence to the racing codes compared to the TABs Also beleive me when i tell u that the rest of the world is watching this 1.5% turnover tax with great interest, there r not many if any at all Racing Authorities the world over that are fans of betting exchanges and if u have shares in BF or any betting exchange that is floated---sell,sell,sell....this may be the beginning of the end for sanctioned betting exchanges the world over. |
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I believe Logroller is correct, in his first paragraph.
Don't know enough, to comment on the second. |
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Logroller it just shows how ignorant those that run the sport are of the fundamentals of punting. You've always been able to back a horse to lose by simply betting around it. It's just more cumbersome , but it's still laying.
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also, if they don't want layers they shouldn't have bookies. Isn't that what a bookie is?
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Betfair isn't finished in NSW or anywhere else in OZ, though it is likely their model will change. It already has with the introduction of premium charge. Remember, Betty is trying to get into the US market and has offered their racing jurisdictions a much better deal than everywhere else. Racing NSW, Racing Victoria etc want one of two things 1) to kill Betty (not going to happen) 2) get more money from her. Betfair needs to stand firm and show they can't simply be elbowed out of the way in OZ using this 'junk turnover' technicality or else they'll be screwed everywhere. A blackout on NSW and Victorian racing is certainly not the solution, that would be like Betty saying "Mess with me and I'll... erm... go away!"
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Most racing administrators are good old boys who more than anything, want racing to be how it was in the good old days, with huge crowds in big stands and everybody paying huge tote commissions.
Everybody knows that model has been dying for years, in fact decades. It was dying well before B/F came along and all things being equal will continue to do so. People have infinitely more betting options than they used to. It's a competitive world and you need to work much harder to get peoples money and attention. Racing administrators were essentially at a complete loss what to do about declining crowds and betting activity UNTIL the corps and Betfair came along and became irresistible scapegoats. "Get rid of them and things will go back to how they used to be!" The problem is that "how they used to be" was actually pretty bad, and getting worse all the time. I didn't bet much because the odds were so heavily stacked against you and helpless punters would so often get shafted (eg. 10/1 shots paying $1.20 a place). Now using Betfair turnover a ton of money nearly all the time. Betfair make racing a competitive product and I take advantage of that. I spend countless hours following racing because it is now worth it to do so. Get rid of the good odds and low margins and racing will again become an uncompetitive product and I'll find something better to do with my time, like maybe get married and even finally have kids lol. That's not the end of the world but something like that will happen, for me and for many other people. It's very simple. The options are to take a small piece from a big pie, or a large piece from a small pie and for some reasons administrators are mad keen on the latter. |
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great post Khan - although not having kids due to Betfair is probably going a bit far
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or a large piece from (an ever diminishing) small pie
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why it's important to have people like Betfair involved - they help grow the pie with OS clients and new money
Giles on the radio now |
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what station
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Racing and Sports or whatever it's called
Basically said they aren't going anywhere - will be having a board meeting next week to work out what to do |
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thanks womble.
the way forward is ton pull out of NSW and threaten to suspend sponsorhip in VIC. Give Vic to the end of the current contract to see the errors of their ways |
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Josh has a thread about it now
They should throw their full sponsorship funding towards any state / code that looks after them in terms of model - pretty sure Tassie, SA, Qld and ACT all have turnover models at the moment - WA has a hi-bred model, turnover or gross profit |
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wombleoz
why it's important to have people like Betfair involved - they help grow the pie with OS clients and new money exactly womble ... OS clients & NEW money coming into aussie racing because of BF the 'blind' just can't see it when BF drops aussie racing .. because of the inequitable turnover charges ... do pvlandy's & cohorts reallly theink .. that the O/S bettors will all send over for a new t@b a/c .. just to keep betting on our races ffs .. rnsw (and now rvic) couldn't run a pie shop ... without serving you up dead mice in the pastry |
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interesting Dominic has been booted across to Ascot tomorrow - WA not UK - lucky he is flexible
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will be having a board meeting next week to work out what to do
ffs they could have had that board meeting anytime in the last 4 years. Also the surprise at the announcement by Racing Vicroria. Are they completely clueless?, you have to wonder at their competence. |
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what administrators need to realise is that funding from gambling on racing isn't a sustainable funding model, aus is 5-10 years behind europe and the US in everything - so easy to look at their racing now and see what ours will be in 10 years
they should have saved their legal cash, got their 100 million and bought up as many pokie licences as they could |
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If Robbie Waterhouse lays More Joyous for $1000 at 2.00, then goes and puts that $909 on with another bookmaker at 2.20, my understanding is that Robbie Waterhouse would only pay Turnover Tax of 1.5% on $91. but the other bookmaker would pay Turnover Tax of 1.5% on $909.
Is there an reason why this would not apply to Betfair. http://www.legislation.nsw.gov.au/sessionalview/sessional/act/1993-76.pdf Rebate of tax for bet back 12A. (1) A bookmaker may claim a rebate of so much of the tax imposed by the Racing Taxation (Betting Tax) Act 1952 on the total amount of bets made with the bookmaker as relates to the total amount of bets back made by the bookmaker. |
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this is from the standard conditions
Bet Back means a wager which is made by the Approval Holder on the “backers” side of the wagering transaction in relation to NSW Thoroughbred Races (or contingencies related to NSW Thoroughbred Races): Version3 1 July 2009 Page 15 (b) for the purpose of genuinely reducing or laying-off the Approval Holder’s liability on a fixed-odds wager which has already been accepted by the Approval Holder and on which the Approval Holder has taken risk on the “layers” side of the wagering transaction; (c) on the same contingency in relation to the NSW Thoroughbred Race as the Approval Holder has already accepted risk on the “layers” side of the wagering transaction referred to in paragraph (a); and (d) in respect of which the amount which the Approval Holder stands to win does not exceed the amount that the Approval Holder stands to lose on the same contingency on the “layers” side of the wagering transaction referred to in paragraph (a). |
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it can probably be argued that on the Exchange there is no risk in part B
ACCC might be interested in looking at it though |
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so it would just be half the amount betfair lists as turnover? otherwise they could just apply for every betfair account holder to get race fields approval
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the 1.5% is on back bet turnover only, not lays
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Isn't it like the GST. Someone along the line, has to pay it at some time.
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So surely all that will happen in an exchange will operate from the right country, offer fields for NSW racing, and not pay them ****, and not pay the country taxes, while TAB turnover falls into a hole due to no more BF money ending up through the totes anyway?
Just a typical view that anybody that collects money from gambling initiatives, be it TABs or the government, or corps, want to get rid of any shrewd punters and target the problem gamblers that can't afford it, because they give a higher profit ratio to all concerned. |
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betfair is a publicly listed company, doubt they would risk breaking the law for a few dollars from Oz
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Isn't BF Australia a bookmaker? So surely if they are licensed as a bookmaker, and they are betting back all their lays with their customers, then that is as simple as it needs to be. Right? Has to be a pretty easy way around this, which will probably save them money.
In the mean time while they work it out, boycott the NSW markets and see how the liquidity goes. In their heads, people that gamble will gamble anywhere. Personally, I gamble, on BF, because I believe it gives me the opportunity to make money doing it. I don't need the thrill. I am certainly not some degenerate that will just throw my money away knowing exactly how much these greedy ****s are asking for just for me to bet with them. It is a complete contradiction saying they are looking out for problem gamblers, when the reality is they are trying to get rid of anybody that isn't a problem gambler, and charging more for the experience. And yeah Womble, they are, but not hard to create a new company. They have all the infrastructure already to do it, just need the right place to set it up. |
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Great post Khan. I think you are not on your own there. Many who were bought back to racing by the appearance of BF will can it if they go.
My betting activities these days are infintestimal as I spend most of my time trading curriencies, gold, and shares. Its far less work and much much much larger rewards. Nothing compares to backing a winner though.  For many of us nothing ever will. Years ago a day at the races was one of the most exciting things one could do. Go oncourse these days on a non carnival meeting, its about as exciting as going to coles. I feel a sadness that so many things in the modern day life are totally consumed my the $$$. It is however the way things have gone and will continue to do so. Betty will fall, or if it survives it maybe as some kind of quasi tote or bookie situation. Racing is run for the elite few, the 100 million$ mostly went into prizemoney which feeds the elite. |
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It' is a pity that my children will never know about the colour and excitement that used to be racing, trotting and dogs.
The characters. the volume of money, the rorts, the language, the culture etc. they can never know |
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Very early in the battle ... I'm sure it was alleged that RNSW had sought some way to put BF out of business - their idea was the race fields legislation - a good solution to achieve that aim.
BF sought the internal communications between Tabc & RNSW for their case ... but I'm unsure whether they were obtained ? I think much of the rest of the discussion has been a smokescreen. Same tactics have been the business plan of Tabc from day one - first bookmakers everywhere - now exchanges too. A pity. |
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I have often wondered if the scabs inreased the takeout on one or all of their products how would you know, ?? Sky
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As long as the dividend for all contestants is listed Hal you know the takeout on any pool, can't be hidden unless divies are obscured
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