A RACING REVOLUTION – BUT NOT THE TYPE THAT SKY IS BANKING ON

TENS of thousands of battling punters around the country like you and I, who pump millions of dollars into TAB profits every year, should feel cheated by the news that they will soon have to pay to watch live racing on SKY Channel.

The dream of a racing vision revolution has the potential to develop into an absolute nightmare for the industry, especially when you have Tabcorp boss, Robert Nason, telling punters their ‘free ride’ is over.

The interview that Mr Nason did with Steve Moran on the Sports927 racing show in Melbourne, could only be described as a ‘public relations’ disaster. He was far from happy with Moran for daring to criticize Tabcorp, and then made small punters like myself feel as though we don’t matter.

I thought the idea of providing Sky Channel free of charge, as part of the Pay-TV package, was to ensure its availability to those viewers who might not otherwise be interested in watching racing or having a bet.

It was seen as a vehicle to promote the racing industry and increase betting turnover by attracting interest from those who are not regular punters or thoroughbred enthusiasts. Has racing become such an instant success that these people are all of a sudden going to subscribe to a ‘pay-to view’ racing service? Hardly!

The big sales pitch by Sky Channel and Tabcorp sounds terrific – ‘a revolution in the presentation of Australian racing’ – three great channels, live television coverage of every race the punter wants to bet on and the promise to bring world racing into our living rooms every day of the week. Sounds like punters’ heaven.

It doesn’t get much better than this – until you brush aside the hype and fan-fare, read the small print and look closely at the bottom line – especially for those battling to survive with every-day living expenses let alone finding a few spare dollars to try their luck on the punt.

The interview that started so well on Sport927 ended just as badly for Mr Nason, who was understandably keen to talk-up the new product but won few friends in the battling punting fraternity with his handling of questions on how important they are to the overall racing picture and why charges have to be imposed and can’t be absorbed by TAB profits.

If only Mr Nason had stuck to his original message: ‘There will be a charge’ – ‘It’s not our charge but will be part of the pricing packages to be announced by the Pay-TV providers’ – and best of all – ‘What we are intending to do is subsidize that cost for any customer who bets with Tabcorp, initially at no cost at all.’ One might ask how much a punter would need to turnover with Tabcorp to be eligible.

Nason's reaction was somewhat surprising when Moran went into bat for the small punters who have been complaining to him about telephone betting services on Tabcorp after 9pm, especially on Moonee Valley meetings.

It provoked this response from Nason: “WE HAVE TO END THE ‘FREE RIDING’ THAT IS GOING ON. We cannot continue to maintain unprofitable services in an environment of multiple providers. We have to maintain services that give us a return. I think that is a reasonable position for us to take. SKY CHANNEL CAN NO LONGER BE PROVIDED FOR FREE. It has to be on a user-pays basis.”

Nason became more incensed when Moran suggested that this was all about privatization of the TAB and making profit. “I am sure your customers will be disappointed at having to pay for the expanded Sky Channel service. Surely if the TAB benefits from income generated by the punters, they are entitled to be subsidized to some degree?”

Nason replied: “It has absolutely nothing to do with privatization. If it was a racing industry owned wagering operator they would be taking the same action.

“We have introduced a loyalty program. We have started a relationship with Sportsman to provide a better form service. We have got reform after reform that enhances the customers’ experience and gives them a reason to bet with Tabcorp. On the off-side we have to be able to invest in those services and we have to cut back in areas that are not profitable.”

Moran took Nason to task on behalf of small punters that he said felt disenfranchised by not being able to place a telephone bet later in the evening on the Moonee Valley night races.

“We have tiers of customers – gold, silver and platinum that can ring after 9pm and that service is still available. It is the lower value calls we get after 9pm that are unprofitable for us to open the Call Centre and offer the service after that time. There is migration to other forms of betting. We have suffered not a single dollar of degradation of turnover as a result,” Nason argued.

Moran replied: “I am talking about customers who don’t have a high profile and who bet in smaller amounts.”

Nason: “Again I have to say I don’t see any complaints coming to us. I don’t see people such as yourself making it known that Betfair has lifted their limits to $20. It seems to me that you particularly like to focus on Tabcorp rather than the positive things we are doing to reform wagering. It is up to you, but I ask that you put a bit of balance into that.”

Moran: “It is a perfectly legitimate question. I can show you the e-mails that I have received.”

But back to the expansion of Sky Channel and what it will cost the at-home punter. Nason does not know and says it will be up to the Pay-TV providers, which arguably poses more questions than answers.

Surely the racing industry isn’t allowing Foxtel and Austar to charge what they like for the racing product. Let’s face it the majority of viewers are far from happy about the number of repeats that confront them on the Pay-TV networks. Guess that’s one thing that will be a bit difficult to do for too long with racing.

More importantly, what is the racing industry’s return from this open-ended deal to allow Foxtel and Austar to set the charges for Sky viewing, or is there some behind-the-scenes consultation that we are not being told about and some bonanza return from the Pay-TV networks to the industry for the provision of product?

These are questions that need answering, especially as our Pay-TV fee goes up every year. Will that also be the case with the Sky service and heaven forbid what package will it be included in? You can bet your socks it will be with one of the popular packages (like sport), which will ensure the cost is by no means cheap.

What should be remembered in all of this is that Sky Racing is the most watched channel on the Pay-TV platform and that should return good advertising revenue (despite the fact that when Pay-TV was introduced we were told there would be only minimal advertising).  The weekly coverage reaches in excess of 700,000 Sky viewers and close to 220,000 on TVN.

Sky covered 65,324 races from 2,503 thoroughbred, 1606 harness and 2,367 greyhound meetings in 2008-09. On any day, Sky Racing receives simultaneous transmission from up to 20 tracks.

Trying to achieve that on the one channel has proved a logistical nightmare as anyone who watches Sky will testify. In the circumstances they have done a good job. But there has been too much congestion with delays causing over-lapping of coverage.

We are now told that the extra channels will enable additional domestic racing (some of the current non-TAB meetings) to be included and bet on, along with guaranteed live coverage of international racing, which is proving increasingly popular.

All this will no doubt cost more to provide but should ensure a boost to betting turnover which again poses the argument of why it should be ‘user-pay.’ One could argue that punters are being asked to pay to lose their money.

As I suggested at the outset the Sky dream sounds great but has the very real potential of turning into a nightmare for both punters and the racing industry.

Perhaps they should be taking more notice of the recent Roy Morgan Research Report which paints a gloomy picture of punting trends and shows that gambling by Australians in the past year has declined by 11 per cent.

Betting on racing continues to decline with gallops dropping at a greater rate than greyhounds and even harness racing (who would have believed that despite the fact the trots and dogs are piggy-packing on the gallops). Internet betting is increasing but TAB and on-course gambling is declining.

The main message for traditional wagering operators is the dependence on an ageing population with 75 per cent of gamblers being 35 years or older. The racing industry is set to lose yet another generation of younger customers.

This also increases the argument that why would you make the older punters, who continue to bet, pay for the privilege of watching live racing at home when most of them gave up going to the gallops long ago. Stone crazy!

When the racing revolution announcement was made it all sounded so exciting. But like so much else with Sky Channel the longer you look and listen, the less interested you become and eventually you just switch off and think – THANK GOD FOR TVN.

There will be many who will want to pay for the better Sky service – even if it means having to suffer some of those incessant chattering hosts who treat you like a moron (one in particular the punting fraternity calls ‘mute button’).

But fortunately it seems there are no plans for TVN to charge for their service. That will only mean that punters in their thousands will be turning their backs on Sky and embracing the boutique racing channel, which one could argue on most occasions offers a far more informative and entertaining service anyway.

UNTIL NEXT TIME THIS IS GODFREY SMITH SAYING GOOD LUCK, GOOD PUNTING AND GOD BLESS TVN.