by Brian de Lore
Published 8 February 2019
Punters are generally creatures of habit and routine, and when taken out of their comfort zone it’s like throwing the proverbial cat into a flock of resting pidgeons.
The result is an instant explosion of squawking chaos which seems to be the situation resulting from the Fixed-Odds-Betting Platform launch on January 7th and the reaction to it from a vocal New Zealand betting public who seem unanimously disappointed at the usability of this new technology and website.
Punters are finicky people. They’re conditioned to the highs and lows of winning and losing. The adrenalin runs high in the quest to beat the odds, swinging from the ecstasy of winning to the lows and depression of losing and back again.
It’s a neverending cycle of ups and downs and like every other vice or gamble in life, emotions fluctuate accordingly, and a lowering of standards from the service provider, in this instance the TAB’s introduction of the new FOB platform and an unfamiliar website, has produced an inevitable backlash.
New Zealanders don’t bet the volume of dollars Australians do as a percentage of the population, but for those who do bet the passion and expectation of service from the betting medium has no lessening of standard expectancy. “Slow, clunky and lacking the essentials,” was one punter’s view of the website this week.
The TAB wouldn’t intentionally lessen the standards, but the suggestion is it’s an organisation that’s both out of touch with the customers and lacking an understanding of the punter’s real needs – casting doubt on how they would take this industry forward into a globalised future.
Apart from the TAB, bookmaking is illegal in New Zealand which domestically gives the TAB a monopoly. But the internet and highly developed overseas websites have changed gambling, and today it’s very much a globalised business with the monopoly only existing in theory.
In reality, the TAB competes with every betting organisation that operates in Australia, and that means numerous corporates, many of which individually dwarf our TAB and have us beaten on the comparative scale before we even began.
Take Bet365 as an example. It boasts 35 million customers globally, employs 4,300 people and last year made a profit of 660 million pounds sterling. Denise Coates of the husband-wife couple that founded the company, in 2018 paid herself a UK record executive salary of 265 million pounds – a salary that would fund five years of New Zealand stakes money for all three codes based on the current level.
Bet365 is just one of many. They have massive IT development budgets and a scale advantage that should have been intimidating to the NZ TAB. Does anyone reading this story believe that the decision of our NZRB board to build a $50 million FOB betting platform to compete with the likes of Bet365 was a good idea, albeit the original amount quoted by NZRB CEO John Allen was $25 million?
Western Australia, the same racing size as New Zealand in so many ways, also wanted a new FOB platform. Instead of going down the NZ path, they took advantage of the well-advanced Tabcorp IT developed FOB platform and plugged into it for a fee of A$7 million per year.
The NZRB stated before even starting to build our platform that fees to both Paddy Power-Betfair and Openbet would amount to $17 million a year. Those fees could so easily have been avoided notwithstanding the capital cost except the word ‘outsourcing’ was never to be uttered in the corridors of Petone.
The decision makers were not business people, however, and neither were they people with either skin-in-the-game or a sense of caution and responsibility that comes when spending one’s own money or exercising a considerable amount of care that would be normal when the outcome of the spending has ramifications for 50,000 plus people.
But all this is now only historical banter because the New Zealand TAB has launched its FOB; we have it, it is what it is, and according to most serious punters it isn’t much.
One high volume punter and racehorse owner of the past who is still an Elite TAB customer but preferred not to be named was willing to provide The Informant with a bullet point list of the main problems:
- Why have the ‘max bets’ become so ridiculously small.? – to drive away clients?.
- Why has Jockey challenges and premiership titles become ‘singles only’ and barred from multi’s?.
- Who signed off on the $50 million spend on the upgrade, and has he left the building?.
- Why is it impossible to do form on your new drop downs, unlike the old site.
- You promised ‘ease of use’ – well ‘hello,’ its now a confusing maze of the jungle.
- Why did you not have some punter input to ensure you got what they wanted.
The most predictable aspect of the new website is the demotion of racing to the back of the class. It’s very apparent that the emphasis is now sports which accounts for around 96 percent of the new options.
CEO Allen has continually preached the line that sports bettors would eventually convert to racing and while evidence of this happening in Australia was confirmed, it also came with a conversion stat of only 17 percent.
This is the spin doctor’s line when you have to justify spending $50 million of racing’s money (while claiming it’s only $40m) for something that has no chance of returning anything to the investor. A half-good business brain wouldn’t give it a second look.
Revenue received from sports betting for racing amounts to a net figure of only two percent whereas tote betting returns the racing codes 15 percent. You don’t have to be a mathematician to realise that turnover of sports betting needs to be 7.5 times that of racing to achieve that same net financial result.
This reprehensible hi-jacking of the TAB to cater for sports is further exemplified when the TAB’s history is taken into consideration – founded in 1951 by the race clubs of New Zealand as a vehicle to benefit all racing.
The NZRB has rewritten that history and tells you they founded the TAB despite the fact NZRB only came into being following the passing into law of the Racing Act of 2003 legislation.
Quoting facts out of context or mispresenting the story by only telling half of it was again to the fore on Saturday at Trentham when Aiden Rodley conducted an interview with John Allen which subsequently was aired on Sunday’s Weigh In program.
“We didn’t want to put at risk the Boxing Day and New Year’s Day races because there was the prospect of going before Christmas and we did think about that,” Allen replied to Rodley’s question about the FOB delay. “We just didn’t want to take the risk on those really important days in New Zealand racing.”
But conveniently Allen had failed to mention the delays had been happening since last July with at least four scheduled dates coming and going before it finally went live.
To Rodley’s question on the FOB cost, Allen replied, “Yeah, about $41 million. We have $40 million approved by the board, and we’ll go back to them for approval for probably about another $1 million.”
The word ‘about’ was the disconcerting part of that response and not very convincing. The lack of NZRB transparency in all its dealings and what will be found once the lid is lifted on its finances, which will hopefully occur after MAC delivers its interim recommendations, will be highly anticipated.
Allen further stated in that same interview, “People have been betting up a storm; they’ve been playing with the site; they’ve been finding their way around it. We had about 52,000 people in the first week. We had about 3.25 million bets in the first week, and it’s just growing from there.”
What he didn’t mention was that in the same week exactly a year ago more than 80,000 punters were actively betting.
On face value, Allen comments would have you believe all is well, but the TAB figures paint a completely different picture.
In four thoroughbred meetings held in the first week of the FOB operation, total betting was down on last year’s figures an average of 37.9 percent. Harness for four meetings was down an average of 34.1 percent with the FOB down 35.5 percent. Greyhounds for six meetings held for that same period was down 16.7 percent in total turnover and 21.7 percent on FOB.
All three codes saw reduced numbers competing in comparison to the corresponding meetings the previous year. Thoroughbreds in numbers to the races was down 27.7 percent; Harness was down 20.5 percent Greyhound numbers were down 6.4 percent.
The analysts have produced studies to say that reduced field sizes result in less wagering. The country now produces only half the foal crop of 30 years ago, and while racing is underpinned by the breeding industry, lack of reasonable prizemoney has disincentivised the domestic yearling market which in turn will continue to keep the foal crop low.
The TAB turnover has been trending worryingly downward for a few months. Field sizes in all three codes are falling away, and with the FOB platform off to a shaky start, the industry now turns to MAC (Ministerial Advisory Committee) for the remedial masterstroke of actioning the Messara Report; the activation of what Messara said over a year ago, “was simple and could be done tomorrow.”
