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PROVINCIAL BOOKMAKERS’ ASSOCIATIONS Submission to Portfolio C ommittee on Trade & Industry. on THE FINAL REPORT OF THE GAMBLING REVIEW COMMISSION CAPE TOWN 28 October 2011. PROVINCIAL BOOKMAKERS’ ASSOCIATIONS Submission to Portfolio C ommittee on Trade & Industry. INTRODUCTION:
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THE FINAL REPORT OF THE GAMBLING REVIEW COMMISSION
28 October 2011
THE HORSERACING INDUSTRY:
HOW HORSERACING IS FUNDED:
Despite the well-established legality of the open bet, Phumelela continues to use every means at its disposal to discourage the betting public from betting with bookmakers. On its website, it openly does so in the following terms:
“Assuming that fixed-odds betting turnover in Phumelela territory is R1.4 billion (50% of the tote betting turnover), it’s easy to calculate what would happen if that money was wagered on the tote instead. Horseracing would get some R280 million annually, instead of the R38 million it receives from fixed-odds betting currently, and stakes at Phumelela racecourses would rocket by some R80 million- a 50% increase!
What is even more damaging for horseracing currently is that many bookmakers are laying the “open bet”. … Given the average return of R76 for every R100 wagered on the tote, a bookmaker retains R24 of every R100 in open bets. Of the R76 left over, R71.44 is returned to punters with R2.28 for provincial tax and R2.28 to horseracing, which would get R17.72 more if the R100 had been wagered on the tote.
The message is clear – owners seeking higher prize money and those who love the sport need to think twice before betting fixed odds or taking open bets with fixed-odds operators.”
PBA submits that the conduct of Phumelela in openly inciting the public not to engage in a lawful betting activity which is competitive to its own offering is unconscionable, if not unlawful, and directly undermines established governmental policy.
Effectively Phumelela’s approach advocates the demise of the bookmaking industry, by suggesting that the public should place neither fixed-odds bets nor open bets with bookmakers.
This approach is also contradictory, in that through its own subsidiary, Betting World, Phumelela itself has a 20% footprint in the bookmaking market, and, based on the announcements of its 2011 results, is looking to grow and expand this presence in the market. The dramatic loss in betting revenues to bookmakers which it advocates would therefore have a substantial negative impact on Phumelela itself.
Furthermore, the ongoing campaign against the open bet also disregards the fact that –
THE REAL PICTURE:
The National Gambling Board (“NGB”) has provided the following official statistics in relation to the turnovers, net win figures and taxes paid by the totalisator and bookmaking sectors during the 2010/2011 fiscal year:
GENERIC CHALLENGES FACING THE HORSERACNG INDUSTRY:
RECOMMENDATIONS OF THE GRC:
“What is required is a more complete review of the horseracing sector, particularly the integration of the ownership of the tracks and the tote, as well as the competitive challenges of the future, and an appropriate industry and regulatory structure should be researched and developed.”