The ACT is the big loser from the VITAB affair, as the statements from the NSW Minister for Sport, Chris Downy, yesterday and last week show.
It shows that the NSW TAB has the ACT over the barrel. It can drive a very hard bargain because the ACT has nowhere else to turn.
The ACT must severe the VITAB link, leaving it open to a claim for damages or ugly retrospective legislation. It is already open to a damages claim from former ACTATB chief executive Philip Neck.
The NSW action shows also how concerned NSW is to cut off any possibility of an off-shore leak of clients of the Australian TAB monopoly, after all VITAB presented a golden opportunity for big NSW punters to use Asian agents to bet through the Vanuatu-based VITAB and get better returns because VITAB’s overheads and government taxes and levies come to about seven per cent of turnover, whereas the Australian equivalent is 15 per cent. The TAB computers would not show the returns in dividends, which would be the same as everywhere else, but they can be paid in other ways.
It is possible, of course, that NSW (governed by the Liberals) is deliberately making the ACT (governed by Labor) look silly for a time.
More likely NSW, like Victoria before it, is very concerned about the leakage offshore of revenue from its captive betting clients.
The TABs in Australia are not fiscal shrapnel. Between $8 billion and $9 billion a year is bet. Of that about 4 or 5 per cent goes in overheads, 85 per cent goes back to punters and about 10 per cent goes to state governments and charities and sporting bodies they would otherwise have to support. That is $900 million a year.
Rosemary Follett’s suggestion that if necessary the ACT can go it alone would result in a drift of medium and large punters because the small pool would result in lower odds than they could get elsewhere. Again, the ACT loses. Unless, of course, the ACT does the radical thing as Nevada did in the US _ aggressively pursue the gambling dollar. It could sell the TAB and cut its take to, say a 2 per cent turnover tax. The TAB would massively expand the 008 phone system and poach punters furiously in order to get, say, five per cent of the Australian market instead of only 1 per cent. It would take 2 per cent over five per cent of the market instead of 5 per cent of 1 per cent of it and double the ACT’s income at someone else’s risk.