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Commingling - why it was always going to fail


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Commingling – why it would fail for NZ.

(This is in regards generating revenue for the industry. Commingling for individuals may well be a success due to increased pool sizes on some events.)

Understanding the implications for commingling for NZ means not just understanding the changes in pools, but also the required changes in the number of events to take from overseas.

The International Marketing Agreement required NZ to substantially increase the number of Australian events they offered betting on compared to pre commingling.

So NZ Tab was going to move to a situation where they took all NZ racing, and some Australian racing – mostly the more premium events, to overtime, increasing that to every OZ TAB event available in Australia.

In two years, the imported race numbers had gone from 15,000 to 25,000 – and now we import around 90,000 events.

Another important consideration is – which jurisdiction would be considered to have the ‘better’ product? When I wrote about commingling, the answer to me was Australia – and by a long way.


What was expected to happen with pools. NZ punters would be betting into pools that were larger than previously. This was designed to attract punters to bet due to greater confidence around price surety.

In isolation, this would be a good thing. But betting in markets doesn’t happen in isolation. People spread there investment around, and the fluctuations aren’t such that suddenly punters are going to increase their overall betting.

Where was the greatest advantage going to be seen in pool size changes?

At the time of commingling, NZ pools on imported events was small because it was solely NZ punter funds. The Australian betting on their own pools had significantly higher pools, than NZ betting on NZ pools. So commingling with a major provider into an Australia pool was going to be significantly different in pool size.

In contrast to that, Australians looking to bet into NZ race pools were not going to see pools that were large by their usual standards. (They would be larger in relation to what they were betting on, if already betting on NZ racing). But where is the added attraction to betting into our pools compared to staying with their larger pools for the majority of events?

So we have a situation where on pool size alone, the commingled Australian races were going to be more attractive to NZ punters in relation to price surety. But the reverse was not going to be the case. Add when you factor in the relative attractiveness of the racing from a product perspective, that was going to make that imbalance worse.

(Those imbalances have shown up by the issue that the Australian population of 5 times NZ population, does less betting on NZ racing than NZers do on Australian racing, even though the punting profile of the nation is massively higher per capita than NZ)


The agreement with Tabcorp to take the additional events, coupled with the then need to broadcast and promote those events, would require a major change to the broadcast model of racing in NZ.

We would shift from a model where NZ racing was the significant priority to a model of effectively wall to wall racing. NZ viewers would be flooded with events (mostly from offshore). NZ events would become part of the overall scheme and emphasis on them would recede.

(We have now witnessed the impact on broadcasting of having to deal with the number of imported races and the effect that has on NZ racing viewing. There used to be long discussions around how some hated that you couldn’t watch NZ races and the post-race discussion/celebrations etc. All diluting the offering and taking away any point of difference)



·        NZ racing was going to lose a degree of focus in regards punter experience.

·        Pools on offshore races were going to provide far greater price surety than NZ pools

·        NZers were going to be presented (overtime), with a product likely to be seen as superior to the local offering.

·        Betting market volumes move based on attractiveness to the punter (price, product, availability)

·        Betting market volumes across a population don’t typically grow without a significant change in landscape enticing new money into the market place.

So when you take the punter funds available to be spread across the available events, it was clear that the NZ events would lose interest and Australian events would gain interest.

Any attraction to new punters would be more likely towards offshore events for the same reasons – greater price surety, product superiority, greater availability.

Result (predictable).

Punter losses on racing are relatively stagnant from 2007. (overall revenue growth largely due to levy rate changes, sports betting and pokies)

Punter losses on NZ racing heavily in decline

Punter losses on Australian racing heavily increasing

Interest in NZ racing therefore decreasing.

When did this change occur?

It happened when commingling happened.

In around 2010, I did an OIA request to obtain all the turnover numbers by code/country/pool for tote and turnover numbers by code/country. Including number of races etc.

The shift in betting was close to instant.

We went from offering 15,000 imported racing to 25,000 in the space of two years following

“The introduction of commingling and the related International Marketing Agreement”

We went from a very high percentage of betting being done on NZ racing (constant leading up to commingling), to an ever decreasing ratio of betting done on NZ racing compared to offshore racing. But the overall racing betting revenue was not rising. It was just a shift of what events were earning the revenue.

And since 2010, the ratio has been continuing to decrease.

Commingling just shifted the money. And the interest in NZ racing has never been lower (from a punting perspective).

Commingling can be successful. But a less attractive jurisdiction with less events and a lower punting profile, is unlikely to gain any traction when commingled with another jurisdiction.



Edited by mardigras
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