In response to the decision of Racing Victoria to move from a funding model based on gross revenue to one based on turnover, Betfair Australasia’s CEO Giles Thompson stated: “We are extremely disappointed that Racing Victoria has ignored the economic analysis and evidence which clearly demonstrates that a fee based on gross revenue is in the best long term interests of Victorian racing.

“Racing Victoria engaged Peter Yates and PWC to conduct a widespread review to find the optimum funding model for racing and it was found that a fee based on gross revenue ensured the greater returns to racing in the long term whilst continuing to foster competition. This was the same conclusion reached by the Productivity Commission.

“Betfair has always paid race fields fees to the Victorian racing industry. A fee based on gross revenue ensured all types of wagering operators could compete and offer their services to punters to bet on Victorian racing.

“A gross revenue model has been in place in Victoria for over 3 years and in that time the racing industry has continued to flourish with competition driving sponsorships and increased services to punters. Betfair has been at the forefront of that competition. With over 4 million customers worldwide, Betfair provides the Victorian racing industry with the opportunity to tap into a global market place that local operators can’t provide.

“A fee of 1.5% of turnover equates to 60% of Betfair’s revenue generated on Victorian racing and this will increase to 80% of revenue during October and November. No business can sustain costs at that level and clearly we will need to consider our response.

“By offering punters the experience of a betting exchange, we are providing a unique platform for them to engage with Victorian racing. A betting exchange relies on liquidity and is therefore a high turnover operator by definition. The fee being proposed by Racing Victoria seriously hampers the ability to offer such a product on commercially viable terms.

“The racing industry is dependent on funding it receives from punters and racing bodies should be doing everything in their power to ensure they are provided with choice, customer service and competitive prices. A fee based on turnover seriously limits competition and will only hurt racing in the long term”.

I concur.

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