Racing NSW’s response to Betfair likely to hurt punters
A war of words has materialised between Racing NSW and Betfair after the global bookmaker was forced to envelop a 33 percent increase in fees paid for standard NSW meetings.
The increase means that from July, Betfair will have to pay 56 percent of its revenue on racing in New South Wales to RNSW. As a result, a normal midweek meeting will now be 51 percent more expensive than the Melbourne Cup.
Not only does Betfair suffer, but punters using Betfair will take a hit in the pocket. The increase in fees from RNSW has resulted in Betfair having to increase the maximum percentage Betfair customers pay in commission on winnings from 8 percent to 10 percent.
“The commission increase and Turnover Charge changes on NSW thoroughbred racing has not been a decision that Betfair has taken lightly. However, such is the magnitude of the uplift in fees it was unfortunately the only course of action available to us,” Betfair CEO Tim Moore-Barton said.
“Betfair has never refused to pay product fees to Australian racing codes and we are proud of our contributions to the Australian racing industry. This includes over $20 million to RNSW over the last five years.
“However, there needs to be a balance between contributions to industry and ensuring that punters receive value for money. If this is not achieved, punters will continue to shift their wagering dollar to offshore betting operators, who pay no race field fees and are an integrity blind spot for racing stewards.”
It was only natural that Betfair had to change their product to meet Racing NSW’s significant demands, but it’s Peter V’landys response to the matter which is ultimately detrimental to the industry.
Racing NSW released a seemingly childish response to Betfair’s claims, titled “Betfair’s mythical argument”.
Racing NSW are stating that Betfair should change race fields fees that better suits Betfair’s business model, but that’s not how HorseBetting.co.au sees the matter.
not misleading its straight out lying and deception https://t.co/nnhZy88lew
— daniel jackson (@dannynoeljackso) June 23, 2017
It is clear that Racing NSW is playing to the advantage of the TAB. It stated that the NSW TAB pays up to 7 cents to the NSW racing industry on every $1 bet, but what they don’t disclose is the amount paid on fixed odds betting, which is where the current business model is being pushed.
“The NSW TAB pays up to 7 cents to the NSW racing industry on every $1 bet on a NSW thoroughbred standard race meeting. Accordingly, the NSW TAB pays over four times as much as the other wagering operators,” the statement said.
“That’s like an Uber driver allowing 50 cents a litre for petrol in his business model then expecting the petrol station owner who is selling the petrol for a $1.10 a litre to drop his price to the 50 cents a litre in order to accommodate the Uber driver’s business model.”
Racing NSW have also stated that the increase won’t have any effect on recreational punters, only larger-scaled punters.
“The half of one cent increase from 1 July 2017 has absolutely no effect on the recreational punter who are responsible for over 90% of total betting turnover on all wagering operators’ turnover,” it said.
“Racing NSW has always had a proud record of looking after the punters and believes that this increase has no effect on the majority of punters.”
Betfair will now be focusing more on other racing jurisdictions in the hopes that punters get the best take out rates they can offer.
“Betfair’s customers are highly sophisticated and price sensitive. There is no doubt that the jurisdictions such as Racing Queensland, Canberra Thoroughbreds, Racing Victoria and Tasracing will be more attractive to customers given their low commission rate (at 6%) compared to what RNSW will be placed at (10%),” Betfair Corporate Affairs Manager Simon Shiell said.
Racing NSW has failed to respond to further questioning.