Kieran McAnulty making the announcement on the future steps and decisions regarding New Zealand Racing at Karaka. Photo / Dean Purcell
Kieran McAnulty making the announcement on the future steps and decisions regarding New Zealand Racing at Karaka. Photo / Dean Purcell
Opinion by Mark Hallett
OPINION
Just under a fortnight ago, Racing Minister Kieran McAnulty gave the approval for the outsourcing of New Zealand TAB betting and broadcasting services to Entain Group for the next 25 years. Entain is a global operation and includes well-known betting brand, Ladbrokes.
The news was heralded as a winfor the New Zealand racing industry and sports organisations who receive a share (but not all) of an up-front payment of $150 million, and at least $750 million in payouts over the next five years.
However, contained in the announcement were the words that should strike fear into the wallets of anyone who backs the Warriors, or has a bet on the Melbourne Cup. “Cabinet had decided an in-principle agreement to extend TAB NZ’s monopoly for sports and racing betting to the online environment, subject to further work being done”.
Whilst the New Zealand TAB has had a monopoly on walk-in betting premises, most of us will only visit once a year - on the first Tuesday in November. The reality is that the real betting choice for New Zealand punters exists online.
Imagine that the New Zealand TAB offers odds on a coin-toss – heads or tails. Normally, fair odds would be $2 for heads, $2 for tails. A punter who bets heads every time will win approximately 50 per cent of their bets and each time would collect double their stake, which would cover the 50 per cent of the times they lost. The long-term result, subject to the vagaries of chance, is breaking even.
TABs earn their money by offering, say, $1.90 for both heads and tails. Thus ensuring that, over time, in this fictitious example, they would make about 5 per cent profit on every bet.
A used TAB betting slip receipt lies in a puddle. Photo / Richard Robinson, File
What stops TABs from offering $1.50 for heads and tails? That is generally a combination of our own innate ability to assess value for money, and competition. Assessing value on a coin-toss is relatively easy, but what is good value for backing the Warriors v Brisbane in the NRL?
While preparing this article, the Warriors were paying $1.42 on the New Zealand TAB, $1.45 through Australia’s SportsBet, and $1.48 on Australia’s BetFair. In this situation, it’s a lot harder to assess value for money. Were the Warriors really a 70 per cent chance of winning, as the TAB odds were indicating? That’s harder to assess (even though this is our year). But we do recognise that $1.42 isn’t a bargain if someone else says it is worth $1.48.
Granted, TAB odds on warriors are lower, partly because more betters are backing them on these shores (not just the TAB skimming the cream).
But herein lies the issue. Gambling on sports or horses is a contest of skill (or luck) between the punter, and the bookmaker. The overriding mechanism ensuring the contest is almost fair, is competition. The New Zealand TAB knows it can’t offer too much less on the Warriors before everyone starts backing them on the Australian TAB. You might not have an Australian TAB account but, be assured, the big players do.
Mark Hallett. Photo / Supplied
The removal of New Zealanders’ rights to visit reputable TAB sites located in Australia (or elsewhere) removes this element of competition. In our coin-toss example, Entain could offer $1.50 for heads and you would have the choice between poor value or no bet at all. Even worse, for those who chose to bet, Entain through their global presence, could then back heads and tails for $1.90 on the Australian TAB with your money, and ensure they never lose.
Little wonder that Entain is offering to contribute a further $100m for a monopoly on gambling in New Zealand.
Imagine that Emirates offered to take over running Air New Zealand in exchange for New Zealanders being forbidden to fly on other airlines. Perhaps they would offer $100m to tourism operators as a reward for doing it tough these last few years. Would we trust them to offer competitive airfares in this situation?
Even if you never bet, you should be concerned about this proposal. Your internet provider will most likely be instructed to block certain websites as a result, and this would set a startling precedent.
Offering a large global corporate a monopoly market position in exchange for generous contributions to society seems a risky proposition – especially when that global corporate has already been fined in the UK and Australia in the last year for regulatory breaches.
And who ultimately pays for this generosity?
A bet on heads for $1.50 odds, anyone?
- Mark Hallett is a punter with accounts with the New Zealand TAB, Australian Sportsbet, and Australian Betfair. Sadly, the horses he follows, generally follow other horses.
