The ACT TAB will not link with NSW, but has made a new pooling arrangement with the Victorian superpool in the wash up of the Vitab affair, according to racing sources.
The new link is contingent on the ACT Government breaking its contract with Vitab Ltd, which will leave it open to being sued or having to pay out a commercial settlement. The costs of that are unknown. However, when Victoria broke a TAB link with the owner of the other Vanuatu-based TAB operator, Chung Corporation, Chung sued for $10 million. But Vitab is a smaller outfit with a smaller turnover.
The Victorian TAB gave the required six months notice in January that it would end the ACT’s access to the superpool it controls of Victorian, South Australia, Western Australian and Tasmanian TAB money.
That link ends at midnight on Sunday.
At the time of severing the link, the Victorian Minister for Sport said the ACT’s Vitab link was the reason.
The ACT Opposition expressed concern that Vitab was poaching Australian punters, perhaps through Asian agents and phone accounts.
TABs put a fixed 85 per cent of turnover in the winnings pool. A link with a major pool is important for the ACT because a small pool means erractic dividends which scare off larger punters.
Also in the Vitab wash-up, changes have been made to the ACT’s arrangements with the Northern Territory TAB. NTTAB is now pooling with NSW through ACTTAB computers. That will require some extra work if the ACT is with the Victorian pool.
However, the contract was due to end in a year and NTTAB is likely to set up its own computing network, now their price has come down.
The Minister for Sport, David Lamont, would not comment on what arrangements had been made.
He said, “”Appropriate commercial pooling arrangement will be in place before the cessation of the present arrangement.”
He would not say if the arrangement would be better or worse than the previous one.
The Vitab affair caused the resignation of the then Minister for Sport, Wayne Berry, in April after the Assembly passed a no-confidence motion in him. The motion accused him of misleading the Assembly in saying all was well with the Vitab contract when Victoria had given notice of the end of the pooling arrangement.
Racing and political sources say Mr Lamont played some high brinkmanship between NSW and Victoria, refusing to be held over a barrel by NSW that would have given NSW a significantly higher percentage of the ACT turnover than the previous arrangement with Victoria.
He went almost to the line (there are only a few days of the present arrangement to go) and waited until the Victorian TAB float was under way so that he had some bargaining chips, according to the sources. He indicated that it would be possible for the ACT to go it alone, increasing the 85 per cent winning ratio to perhaps 90 per cent to attract more custom from interstate telephone betting, reducing Victorian revenues.
The ACT would have had little to lose (about $5 million on Budget) and a great deal of market share to gain because it is coming off such a low base (about 1.5 per cent of the total Australian TAB market).
The Victorians, in the middle of the float, therefore had good reason to welcome the ACT back into the fold just in case it became the mouse that roared.
Whether the new arrangement is better or worse than the old one is not known. Some sources suggest it might it might be different, making it an apples-and-pears comparison.
The cost to the ACT of breaking the Vitab contract is unknown. There was no clause giving the ACT an out if it lost pooling arrangements, but the provision of pooling arrangements was something the ACT agreed to provide.
Vitab’s turnover in its firs six months was $5.12 million, according to the Pearce report. So it can demonstrate a $10 million annual turnover which was rising and perhaps a $1 million profit. The ACT’s figures suggested the ACT would get $600,000 by Year Three. As that represents a $60 million turnover, the lost profit projections could be quite high.
The ACT, however, could assert the Vitab had not given it all the facts and so the ACT was not bound to continue the contract.
The ACT is likely to avoid a court battle on several counts. It would be in the embarrassing position of having to assert all sorts of things about Vitab and all sorts of loopholes in the Vitab contract when less than a year ago it was saying Vitab and the contract were winners for the ACT.
Further, racing sources say that a court case would rake over the contract formation in some detail.
On another issue, Mr Lamont said that if the ACT permitted sports betting (on football, tennis and other sports), it would be done competitively and not through any exclusive licence. He said he had a duty to protect the position of existing bookmakers in the ACT.