The Sunday Afternoon "Finish On"
On Friday, the wagering landscape in NSW will shift tangentially with the 50 per cent hike in Point of Consumption Tax coming into effect.
26 June 2022
ON Friday, the wagering landscape in NSW will shift tangentially with the NSW Government’s 50 per cent hike in Point of Consumption Tax on wagering operators coming into effect.
Casual punters might not understand the impact but it’s vast and, despite a promised 33 per cent return (of taxes) to the racing industry, the outcome regarding turnover (the lifeblood of income) has the potential to be negative.
In bare terms, this hike in taxation (from 10 per cent to 15 per cent) comes with the potential to drive high turnover individuals (or organisations) away from wagering completely.
Until now, betting on greyhound racing can be best quantified by dividing eight runners into the percentage over 100 to equate to a metric per starter.
For ease, let’s say an opening market is 132 per cent thus four per cent each runner while, with smaller fields, the same high percentage is likely to be offered ending in a better result for the bookie.
A prime example of how punters have been gouged in recent times is the stealth-like manner in which all corporates have evolved into providing a vanilla-like service which provides no competitive edge.
The likes of Tabcorp, Ladbrokes, Unibet, Pointsbet have averaged up to 123 per cent on greyhound racing in recent years while Topsport was the point of difference (up to six points lower) yet a change was noticed earlier this year.
Topsport has always led the market in value but this PoCT is a driver to force their margins to cover the taxation life and the punter will pay.
When Tabcorp and the Government talk about a ‘level playing field’, will they consider reviewing the rebates offered to the ‘big end of town’ syndicates which have the power to manipulate markets?
The wise men who put this PoCT hike in place have been playing with an incendiary device without protection. This is a 50 per cent increase in tax … a 50 per cent hike in anything draws an adverse affect.
NO BOTTOMLESS PIT
I’m happy to be proven wrong, but this PoCT hike has the portent to harm greyhound racing in NSW.
The Greyhound Welfare and Integrity Commission is, now, funded wholly from receipts from original PoCT uptake.
If let’s say GWIC costs $7m annually and receipts from PoCT come to $12m, will the $5m bottom line profit will be retained by Treasury and not fund greyhound capital works, for example?
Greyhound participants need to know!
And let’s not forget, the State Government limited greyhound racing PoCT receipts (on implementation) to the outrageous inter-code deed agreement – a point offered by GRNSW CEO Tony Metrov to government in March 2021 via the PoCT review process.
“GRNSW receives only 2% of the PoCT’s 10% tax rate based on a distribution formula from the 1998 Inter-code Deed which results in the greyhound industry receiving just 13% against a greyhound wagering revenue market share of at least 21%. Therefore, the PoCT has in actual effect only in part compensated GRNSW, ” Mestrov correctly offered.
Another important GRNSW ideal was: “a greater share of PoCT revenue, namely 80%, be redirected back to the three racing codes in NSW to fund welfare programs whilst ensuring the long-term sustainability of an industry facing its most important funding challenge going forward.”
That didn’t cut through whatsoever!
Interestingly, Tabcorp and Racing NSW both refused to allow publication of their submissions at that time with their modus operandi likely to be the advancement of their own agenda against the best interests of all.
The Government was acutely reminded of further issue by Tony Mestrov on Page Three of his submission:
“Key Point: GRNSW submits that any increase in the current rate of 10% could have a negative and damaging impact on its other revenue streams, a concern which will be outlined in latter parts of this submission. GRNSW also submits that the NSW Government’s introduction of the PoCT as a 10% tax on all wagers placed by NSW residents, has closed the loophole in NSW tax wagering tax laws.”
For now, the only saving grace is that 18 to 35-year-olds love greyhound racing and that engagement is somewhat of a safety net.
There’s certainly no prospect of repeal of this PoCT hike – especially with such a huge player in Tabcorp backing it – but just how long will it take others to realise the impact?
For now, only Victoria sits sets PoCT at 10 per cent and external pressure will come for a perverse parity across the nation.
While the wheels industry took more than expected, leading WA trainer Dave Hobby had his open-ended suspension from all aspect of greyhound racing lifted on Tuesday.
The suspension prohibited the involvement not only from racing but from even breeding a litter and his 48 years of unbroken involvement now has an asterisk.
“Racing and Wagering WA in 2020 were puffing their chest out in saying the kept racing going when we all worked through Covid-19 but they also reduced our income (stakemoney) by 20 per cent,” Hobby said.
“I get that there was uncertainty around wagering but there was no downturn in TAB turnover … it went up sharply.
“The owners who lost the 20 per cent were the casualties in this. RWWA argues that the money was returned to industry and shared equally but that’s not the way I see it.
“My losses were massive and others were also badly harmed. I was unable to breed a litter during the suspension – I get that I could not attend a track but it was no different to an office worker being based at home.
“Those people were given liberties but I was unable to stay here and send a vaccinated staff member to the track (with dogs).
“While it’s over now, I’m really gutted about the processes put in place and I just hope it never happens again.”
Hobby has no race-ready dogs and his income (via prizemoney) is going to be stymied for months to come. And his first starter back in 2022 will be by Fernando Bale out of Corona Monelli – that’s quite ironical!
The Winter Carnival in Queensland provides outstanding black type racing and prizemoney which compares favourably with all other states.
What is disturbing is the lack of clarity on what is available on the Racing Queensland website in respect of programming.
Take for example Wednesday’s Mick Byrne Memorial heats for Novices (one win only) which offers $25,000 to the winner on July 7.
It’s published on Albion Park’s www.brisgreys.com page but there’s no mention of any forward program on RQ’s equivalent in a one-click process.
A finer event search comes up with Ipswich’s June 29 program but no mention Albion Park’s proposed card is a mystery. There might be something there (if you’re not time poor and or very clever) in their Winter Carnival blub but there is no simple way through this!
Step forward a couple of months for Townsvillé’s $40,000 to-the-winner Cup and is a gilt edged trade secret. Let’s hope some recourse from the increase on PoCT can be allocated to RQ elevating its website to anything like offerings of interstate contemporaries.
What’s really sad, it that the RQ website has been poor landing place since its inception in 2010.
On a more positive note, Racing Queensland has introduced an incentive scheme to encourage trainers to focus local trainer’s attention on the rich Winter Carnival.
A greyhound placed in any of the lead-up races to this week’s heats of the $525,000 Group 1 Brisbane Cup (520m) and $225,000 Group 1 Queensland Cup (710m) will be eligible for a $10,000 bonus if it wins a heat of those Group 1 races.
It’s a fine initiative which again sets apart what RQ does for home bred stock as compared to GRNSW’s continued disdain/disregard for breeders south of the Tweed River.