Bookmakers are all set to lose money during Melbourne Cup week
The Melbourne Cup Carnival for corporate bookmakers used to be an early Christmas but with the introduction of POC and higher product fees this year will see them all lose money on the carnival.
The Melbourne Cup used to be a race bookmakers filled up their bags on with a big open field and plenty of people to bet on it but this year looks to be a bad year for corporate bookmakers and the racing industry as a whole.
The Caulfield Cup carnival showed a reduction in turnover on racing and that is set to continue this week as we head in Derby Day this weekend and on top of that the introduction of new fees to bookmakers will see them lose money on Melbourne Cup week despite how the results go.
This may sound great for punters but its quite the opposite and bad for the racing industry as well, the higher fees mean worse odds and worse odds mean punters will look to other products to bet on such as the NBA which is much cheaper for bookies to take bets on.
The issue will affect all bookmakers with BetEasy, Ladbrokes and Sportsbet all saying there is no way they can make money this week as the POC tax and product fees will wipe out any of their potential profits.
“I can’t believe I’m saying this but it is just too hard to make money this year,” Mr Tripp head of BetEasy told the Australian. “I used to look forward to the spring carnival but now I just want to get through it. It is not sustainable. Something needs to be done.”
The issue is certainly worrying for the racing boards with increase competition to put on bigger and richer races to compete with one another.
“The racing industry makes its money off turnover so if that is suffering and profits are down and that keeps going … then it is a disaster for racing”. Melbourne Racing Club chairman Peter Le Grand said.
Bookmakers will be able to absorb the losses this year and potentially for the next couple of years but each have said their marketing and push for clients will be towards lower product fee sports instead of racing.
“The introduction of POC taxes, on top of the existing racefields and product fees, is having a significant impact on bookmakers’ profitability. This has contributed to bookmakers Âreducing marketing, which is Âlikely impacting turnover on ÂÂvarious racing codes.” head of Sportsbet Barni Evans said.
State governments are to blame and the issue has been seen first hand in South Australia already who introduced a 15% POC tax which has seen a huge decline in turnover on racing in the state and thus lower prizemoney levels for races prompting the states biggest training operations to leave.
Cup Market đź’°: View the odds for the Melbourne Cup
