The ACT TAB has agreed in principle with the Victorian TAB to continue present arrangements for pooling for the next two weeks when it would finalised a contract with the new privatised Victorian TAB, the Minister for Sport, David Lamont, said yesterday.
Six months ago, Victoria gave notice that it would terminate the agreement on July 31. At the time the Victorian Minister, Tom Reynolds, cited the ACT’s contract with the Vanuatu-based Vitab Limited as the reason.
Mr Lamont said he was in no position to comment on the situation with Vitab.
The Leader of the Opposition, Kate Carnell, said yesterday that the Vitab saga could cost the ACT as much as $10 million. ACTTAB was on a lose-lose. If it pooled with Victoria a condition would be to break the Vitab contract and Vitab would sue. If it went without a pool on its own, it would have to lower its take to keep custom because a small pool would pay erratic dividends driving phone punters elsewhere.
She said the $10 million was based on the amount the Vanuatu-based Chung Corporation was suing the Victorian TAB in similar circumstances.
ACTTAB signed a contract with Vitab in June last year. ACTTAB provided technical and computer services and got 1.5 per cent of turnover decreasing to 1 per cent after a year.
The Opposition expressed concern that Vitab could attract Australian punters with higher returns.
Mr Lamont said agreement had been reached in principle which would ensure the ACT got services “”in the same order as at present”.
There would be no disruption and there was no need to rush the remaining technical details.
It was “”wrong and mischievous” for Ms Carnell to talk about losses and to suggest the new Victorian would be worse than the previous one.
“”Her comments were as useful as the weather-vane on the Titanic,” he said.
Her suggestion that the ACT should sign with NSW would have resulted in draconian, unacceptable provisions.
He was confident that a comprehensive commercial arrangement would be in place with the new Victorian TAB Corp by August 14.
Ms Carnell said the Government had asserted earlier that the reason Victoria had given notice to end pooling with the ACT was because the Victorian TAB was being privatised and had had nothing to do with Vitab.
That had now proven to be nonsense as the ACT was signing up with the privatised Victorian TAB on the condition that the link with Vitab be severed.
The ACT had also lost about $350,000 a year from the Northern Territory because it had signed with NSW.
COMMENT by CRISPIN HULL:
It appears that Mr Lamont has made a reasonable fist of gluing back together the sensible pooling arrangements with Victoria shattered by the incompetence and folly of the Vitab affair.
He seems to have used his trade-union negotiating skills to great effect to play one big state off against the other while holding a card up his sleeve that the ACT could go it alone and pinch their punters. (The card was not much higher than a three.)
However, there is no escaping that it will still be costly. Ms Carnell’s $10 million is the very unlikely upper end of the worst-case scenario.
None the less, Vitab has a good case for damages for breach of contract and has the tactical advantage of a Government not willing to fight it out in the courts. A fight would entail an admission by the Government that the contract it had earlier lauded as the greatest thing since sliced bread signed was somehow defective or that the people who signed it (earlier lauded as being of the utmost integrity and talent) somehow did not keep their side of the bargain.
The Pearce inquiry report revealed there was no “”out” for the ACT if the pooling arrangement ceased. It and the Government’s own figures suggest a total turnover for Vitab in the contract period of between $100 million and $150 million and Vitab cold expect between 5 and 10 per cent of that as profit.
Indeed, the more the former Minister, Wayne Berry, boasted in the Assembly that this was a “”good deal” for the ACT and that it would make between $600,000 and $750,000 a year, the more Vitab has a case for greater damages, because the ACT’s profit was a percentage of Vitab’s potential turnover, which now, of course, is lost.
Racing sources say a settlement suggestion of $500,000 was turned down.
A suggested settlement figure has been $3.5 million. That will cause a bit of anger around the TABs and in the racing clubs when they think of what a deserving group of people the Vitab principals and shareholders are, compared to say the punter who puts $5 each way on the Third at Rosehill.