By Hans Ebert Visit: www.fasttrack.hk
The recent announcement that the grossly underperforming Tabcorp wagering division would likely be sold off was one of the worst kept secrets in Australia’s corporate and commercial world.
The corporate world’s rumour mill has been gathering momentum since pre-pandemic times, with the all too familiar story of a moribund commercial Mr Creosote type lumbering behemoth suffering from a ravaging complacency across all levels, and producing predictable financial results.
When the relatively recent merger- correction, takeover- of rival, the Tattersalls group with its lucrative lotteries business and equally underperforming wagering business took place, it provided Tabcorp with its last roll of those tumbling dice to get its act together and embrace the new world of wagering which was passing it by with Black Caviar-like speed. It did not.
The integration of the two wagering businesses is still dogged by problems and issues which Tabcorp’s investors and shareholders- big and small- have deemed unacceptable.
The wash-up saw Tabcorp Chair Paula Dwyer and CEO David Attenborough fall on their sword during the pandemic. And not for health reasons.
Clearly the problems for Tabcorp’s wagering business are not terminal. Far from it. Tabcorp’s complacency, decision making and direction over the past decade or more has directly created a fertile wagering growth environment powered by a combination of sharp minds embracing emerging technological change.
Add to this, a new generation of tech savvy customers and punters weary of outdated products and services largely dependent on obsolete technology and commercial culture.
Racing clubs, with their outdated thinking and a media landscape tottering on platform shoes and flairs and trapped in its own Bubble Of Babble by serial natterers and drowning with the Sharkie should take note. Good MORNING! How ARE you?
Innovation and Tabcorp have never been bedfellows of any description. Tabcorp has been left at the starting stalls because of the raft of “sexy” and innovative betting products which their rivals – the agile minded corporate wagering operators- have launched and which have not been matched.
The digital world remains largely virgin territory to Tabcorp, and they continue to pay a very high price for such deficiencies.
The marketing spend of the corporate wagering operators have not only been massive, but their marketing campaigns have been very successfully targeted and delivered market share outcome above expectations.
The repercussions for the Australian racing industry – all three codes of horse racing, harness and greyhound racing- will be life changing and spread beyond the shores of the island nation that is Australia.
From an anticipated “Melbourne Cup” field of potential bidders, well-connected Financial commentators have narrowed the field to a shortlist of two – the global Ladbroke brand’s parent company Entain and a possible private equity consortium using Australia’s most successful wagering operator Matthew Tripp.
For either, the stakes are high. So high, that it won’t even need a little help from Joe Cocker’s friends nor the falsetto of Tiny Tim.
Australia’s wagering market is both large and lucrative. It will be very surprising, if not staggering, if another player or two does not enter the contest for the major prize, particularly given the global mergers and acquisitions markets awash with cash plus a private equity sector that has regained its mojo and rapacious appetite.
An Australian acquisition like Tabcorp would massively strengthen the commercial portfolio of an existing northern hemisphere wagering operator or a private equity player, both of whom have zero to lose.
Where does that leave the racing industry? Like Robinson Crusoe on a desert island, reminding it of what might have been “if only”.
Australian racing now faces a challenge like never before: It has to turn a position of very obvious and demonstrable weakness into a negotiating position to deliver an outcome which does not fast track it to a race to the bottom like its UK, European and US counterparts.
Its weakness is exposed for all to see with Australia’s two largest wagering markets – New South Wales and Victoria- still unable to agree on anything and consumed with a last man standing destructive agenda.
Ironically, both States have so much to gain and zero to lose by putting aside their toxic Mexican standoff behaviour and working together to ink the best possible deal for the two market leading wagering States, which then would inevitably flow across the borders to the rest of Australia.
Clearly, the serious potential bidders would have already done their due diligence. The Victorian wagering licence is up for grabs in 2024 while NSW has a tantalizing long term 99 year arrangement with Tabcorp.
However, when it comes to sitting across the room in any kind of negotiation, Racing NSW’s Peter V’Landys just doesn’t flinch. He comes away with the deal that he wanted before he even entered a negotiation.
By contrast, Racing Victoria’s Board of Oompah Loompahs just does not have a Willie Wonka like “PVL” capable of getting down in the trenches- and getting dirty if necessary- to ink a deal to its long term advantage.
While the potential Tabcorp sell off has excited the Australian racing industry and, equally, financial markets across the globe, what has flown under the radar and has escaped analysis is the potential impact that a “new age” wagering operator could have on neighbouring racing jurisdictions.
It is an open secret that billions of wagering dollars continue to leak and flow into the bulging pockets of well-organized illegal wagering operators with global criminal connections and networks based in Asia and the northern hemisphere.
They operate with impunity against an all too familiar background of impotent Racing Administrations posturing and grandstanding with meaningless resolutions at expensive global racing “talkfests”.
Every second, third or fourth year, there are the proclamations of a looming Armageddon for these free loading piranhas. It’s an Armageddon which lies in waiting, and is not likely to happen any time soon.
The dysfunctional global wagering landscape and the emerging wagering models, which are growing exponentially have successfully generated compelling evidence that both the pari-mutuel, totalisator wagering model is so outdated, it needs “last rites” administered to it.
Racing Administrations that cannot read the tea leaves in this the “Year of the Ox” will only validate Albert Einstein’s definition of Insanity; “Doing the same thing over and over again and expecting a different result”.
Just ask Tabcorp. And their fellow Travelling Wilbury’s in Australian Racing Administrations.
Those that still rely on the outdated “Tote Only” wagering models and turn their hearing aids off to popular consumer wagering products offered by the successful new generation of wagering operators are running out of time. Duh.
There’s the need to reboot their mindset and embrace changes which will ultimately deliver serious revenue.
This is what every racing jurisdiction needs to underwrite their sustainability in this increasingly mixed up world.
You dig?
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