Victorian racing authorities have rejected the turnover model used by Racing NSW to charge wagering operators and will stay with its preferred method of charging based on a percentage of gross revenue.
The board of Racing Victoria (RV) has accepted in principle the recommendations of the final report of the Victorian Wagering Review and intends to implement the new regime from August 2012 to coincide with the start of the new Victorian wagering licence.
The review conducted by leading international consulting firm PriceWaterhouseCoopers (PwC) has recommended that RV increase the current standard rate from 10 per cent to 13 per cent of gross revenue and increase the premium rate from 15 per cent to 18 per cent during the spring carnival months of October and November.
A key feature of the new model will be the introduction of a minimum payment of 0.5 per cent of turnover per month.
In any month where the percentage of gross revenue of any wagering service provider is less than 0.5 per cent of that provider’s turnover a minimum fee of 0.5 per cent of turnover
will apply.
“Interestingly the review found that the existing product fee regime would have delivered around $56 million per annum to thoroughbred racing on average over the period of the new licence while a fee based on 1.5 per cent of turnover would only have delivered $53 million,” RV chief executive Rob Hines said.
“The recommended fee structure is likely to return over $63 million per annum.
“The implementation of the new product fee regime could still be impacted by the outcome of the High Court challenge to NSW race fields legislation by Sportsbet and Betfair and the
issuing of the new wagering licence in Victoria.
“But both of these matters are expected to be resolved long before the new fees are scheduled to be implemented.”
The review also concluded the following:
* Corporate bookmakers are gaining an increasing market share, with turnover between totalisators and corporate bookmakers expected to converge in approximately 10 years time.
* Sports betting has not had a material impact thus far but is still a relatively new
product with increasing appeal to the younger demographic.
* Different wagering customer segments have different price sensitivities and make
up different proportions of the wagering pools across different wagering providers.
* Changing demographics and technology mean the average punter now has easier access to a broader range of competing wagering products.
AAP TURF
