Straight Up – Money makes the racing world go around

Events in Japan and Australia this week highlight the challenges the racing industry’s core commercial model, wagering, has moving forward.

At the Asian Racing Conference in Sapporo, the evolution of the global wagering market was very much on the agenda. Racing NSW CEO Peter V’landys put a global parimutuel approach, as pioneered by World Pool, at the forefront of future thinking.

“I think (the World Pool) has the potential to save world racing because it really highlights the major events in every country, it puts the focus on that event and punters from all around the world can bet on that particular race,” V’landys said.

Former Ladbrokes executive and now Racing Queensland CEO Jason Scott knows wagering better than most administrators. He said the flow to illegal markets, which don’t put funding back into the racing industry, would only grow while take-out rates are so high.

“We need to do more work on elasticities of take-outs, some of the parimutuel pools around the world have 25 per cent take-outs from some of the exotic markets,” Scott said.

“Is that the right amount? If we bring that back to 15 per cent or 13 per cent are we going to double the turnover and enhance greater returns to racing?”

He also hit the nail on the head when he said: “We’re not just fighting for the wagering dollar, we’re fighting for our customers’ disposable income.”

Wagering corporations are finding this out as well. On Wednesday, Tabcorp announced it had registered a $1.36 billion loss for the 2023/24 financial year, driven by impairments in its NSW and SA wagering businesses.

The result has set Tabcorp on a different strategic path under new CEO Gillon McLachlan.

Once a wagering titan, Tabcorp’s position has been diminished. A key aspect of that has been the significant decline of parimutuel betting on racing, as detailed in a recent story on The Straight.

Totes thrive in monopolies, but it is clear in a competitive market like Australia, the certainty of fixed odds makes it a more appealing product, even with increasing margins. It is interesting, in that context, to see World Pool posed as a global solution to a myriad of local problems.

While the corporate wagering landscape has taken a haircut in the past couple of years, the likes of BlueBet, now operating as betr, have grown both turnover and market share.

Its plans are now firmly focussed on Australia after announcing it would opt out its operations in the competitive American landscape.

It was also interesting to see both McLachlan and BlueBet CEO Andrew Menz speak to the impact BetStop has made on the wagering landscape. Twelve months after the national self-exclusion register launched, it has received over 28,000 registrations.

Meanwhile, political wrangling still continues in both Victoria, where the MRC board saga has taken another twist and in New South Wales, where Premier Chris Minns has backed in V’landys as Racing NSW CEO.

Finally, on the track, Victoria hosts its first Group 1 of the season, the Memsie Stakes, on Saturday.

Superstar mare Pride Of Jenni takes centre stage and Warwick Barr spoke to her breeders Trelawney Stud, who are looking forward to her return after enduring the loss of her half-sister, a foal, during the week.

Enjoy your racing weekend.

Bren O’Brien

Managing Editor and Founder

The Straight