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TAB in crisis


barryb
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Please sir, can I have some more? 

There won't be many business' not struggling and won't they simply be able to ask to fall under the same category under the assistance program of revenues being down by x% etc?

Being a government entity, maybe they don't fall under the new 'package' rules, but that is the only area where they should feel any compensation should be due - under the same guidelines as every one else going through this situation.

And what about the error with bonus bets? I damn well hope it's not the case, but that reads to me something along the lines of counting the bonus bet amount as part of the income/revenue before deducting the payout. But the bonus bet has no intrinsic value since it's gross revenue has already been received in the original bet. The bonus bet can only carry a potential cost. Tell me they haven't screwed this up in this fashion!

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Wait. They made a $3.8m accounting error over bonus bets. How could that happen and they get the books to balance? They are already insolvent and probably should be wound up. Every spare taxpayer dollar should be going to the pandemic control. The first place to look would surely be to slash payments to codes to bring those in line with income.

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Just to recap

From the 2019 NZRB Annual report

Racing Tote turnover - 885.7 mil

Racing Fixed turnover - 780.0 mil

Sports turnover - 632.6 mil

And as an aside, just going back to what you have suggested in the past Mardi, nett revenue from tote would exceed the other 2 put together

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3 minutes ago, Hesi said:

Just to recap

From the 2019 NZRB Annual report

Racing Tote turnover - 885.7 mil

Racing Fixed turnover - 780.0 mil

Sports turnover - 632.6 mil

And as an aside, just going back to what you have suggested in the past Mardi, nett revenue from tote would exceed the other 2 put together

It's variable - but the benefits of the tote system is that it carries no risk. So you don't have to manage that in order to try and deliver a profitable betting margin.

So the other two may exceed the tote revenues in a good year. But the true costs associated with doing that are never presented in the annual report. So you could get a 12% net yield on sports betting - but that doesn't consider the costs of obtaining the 12% in market setting/market risk management etc - the true return might be 2-3% after costs. In which case, tote is going to deliver well beyond that.

The annual reports are suggestive of that being the case. The costs have risen dramatically with the increase in fixed odds offerings - but the overall net situation is barely changing. Even though the overall revenues from punters has been rising.

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38 minutes ago, curious said:

Wait. They made a $3.8m accounting error over bonus bets. How could that happen and they get the books to balance? They are already insolvent and probably should be wound up. Every spare taxpayer dollar should be going to the pandemic control. The first place to look would surely be to slash payments to codes to bring those in line with income.

It could be a reporting issue rather than a books issue. Incorporating some account into the reports that makes them think something is the case that isn't. Who knows. Maybe adding into revenue some bonus bet control account - thereby overstating the revenue from the bonus bets.

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I always thought, along with others, that the sports betting, overseas racing and pokie revenue could be wiped out at any time. I certainly didn't expect it to happen like this. Thought it would be a political matter sooner or later. How long before pokie dens are also closed? Might be a good thing that this will advance the sunset and therefore the subsequent sunrise.

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5 minutes ago, mardigras said:

It could be a reporting issue rather than a books issue. Incorporating some account into the reports that makes them think something is the case that isn't. Who knows. Maybe adding into revenue some bonus bet control account - thereby overstating the revenue from the bonus bets.

Could be. I'm not immune from making accounting errors. Just escaped a GST encounter with the IRD over one! Fortunately every thing else ticked the boxes but it's easy to do and always seems to be something that appears in your favour. If the reverse, you don't hear a thing!

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3 minutes ago, curious said:

I always thought, along with others, that the sports betting, overseas racing and pokie revenue could be wiped out at any time. I certainly didn't expect it to happen like this. Thought it would be a political matter sooner or later. How long before pokie dens are also closed? Might be a good thing that this will advance the sunset and therefore the subsequent sunrise.

I agree. It highlights how much the industry has become reliant on these non-racing related revenues. The TAB have at least got to the point of acknowledging that is the case.

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2 minutes ago, curious said:

Could be. I'm not immune from making accounting errors. Just escaped a GST encounter with the IRD over one! Fortunately every thing else ticked the boxes but it's easy to do and always seems to be something that appears in your favour. If the reverse, you don't hear a thing!

One of the issues with the TAB is they have gone from a simple business model, to a more complicated one. Fixed odds, bonus bets, currency hedging/exchange rates. And they haven't necessarily been able to have the right type of staff to cater for the different needs and understanding. Just another reason they should have never got into such a business - they weren't skilled for it.

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