Tote packs its bags - Axe to fall on over-the-counter raceday bets in new cost-cutting move

Drastic cost cutting by the TAB is poised to see punters on course unable to place bets over the counter.

In a letter to industry organisations yesterday, the same day Government announced a $72.5 million emergency rescue package, Racing Industry Transition Agency executive chair Dean McKenzie outlined some of the far-reaching measures it is proposing to make.

By far the most contentious will be RITA’s plans to move away from providing manual betting facilities at the country’s racetracks - where people hand over their money to an operator, call their bets, and are given a ticket, a common practice all around the world.

Instead it is proposing punters use self service betting terminals or their phones to place bets via the TAB app.

Racetrack punters have enjoyed betting over the counter with tote operators for decades.RITA says it will work with the codes to “present a specific on course solution for marquee events”.

McKenzie says the decision to propose these changes has not been taken lightly.

“However, the level of savings required has left the Board and management team with no choice but to cut costs across all areas of the business.”

Earlier this week, RITA got specific about its 30% cost-cutting of staff, a slew of Trackside staff, including commentators, frontmen, camera operators, managers and producers to be axed.

And yesterday it was revealed RITA was just three days away from defaulting on $26 million of debts it had been unable to pay.

About half the country’s racetracks already have a few self service terminals.Club managers worried

Racing club managers today expressed considerable concern about the betting changes which RITA is looking to introduce when people are allowed back on course under COVID-19 alert level one.

Auckland Racing Club executive general manager of racing and operations Craig Baker said it would take three to five years to phase out on course betting terminals.

“You couldn’t cut people off at the knees overnight like that. As a club we wouldn’t be looking after our customers if we did that.

“In time, if you could put in enough self service terminals it might work, but we have only 14 to 16 at Ellerslie at the moment. But I think we’d need some tote terminals as well, especially on big days like Boxing Day (when so many first-time racegoers attend).”

Baker said while the number of people betting on mobile phones at the track has increased by 20% in recent years, newbies couldn’t transition straight away. It was no quick process to open a TAB account and even free bet incentives might struggle to get enough people to sign up.

Andrew “Butch” Castles … five years would be a realistic goal.New Waikato Racing Club chief executive Andrew Castles believes five years would be a realistic goal for weaning punters off betting with on course operators.

“In a lot of ways it makes sense, certainly on lesser, industry days when fewer people are on track but you certainly couldn’t go bang, like that.

“Clearly there are challenges but if you could ramp up the self service terminals, and have mobile ones, you might get there. But clearly there would be some days when we’d require on course servicing with terminals.”

Jamie Mackinnon … backward step.Backward step

Auckland Trotting Club vice-president Jamie Mackinnon said removing the terminals on course would be a backward step.

“We would definitely lose revenue. The average age of our members is 60 and, while there’s nothing wrong with new technology, we shouldn’t be forcing it on them.

“We would try to find ways to make sure we could keep tote operators.”

Staffing the terminals doesn’t cost the TAB anything, individual racing clubs pay for that. The TAB’s sole expense on raceday is the control van which links the track to the betting host.

Antiquated machines

It’s the betting machines themselves that are the problem. Like so many other parts of its business, RITA is suffering from years of under-investment by its predecessors, the terminals largely worn out. Increasingly, it is becoming a losing battle for those fixing the machines to keep them alive.

Throwbacks to the 1990s, they were given an upgrade in 2005 but now urgently need replacing.

But, while it is believed RITA has considered replacement options, it doesn’t have the money.

Industry insiders also fear many casual punters enjoy the experience of engaging with tote staff, and being given a ticket, far more than they would being confronted with the spinning wheel death on the TAB’s app and website which has been flakey at best since its introduction.

Many of the country’s racetracks are also in areas where mobile phone reception is questionable. And even in the cities, getting an internet connection on marquee days is often impossible.

Tens of millions of calls have been made through TouchTone.TouchTone not affected

McKenzie’s advisory states RITA is looking to close its “Phonebet betting channel” but Head of Public Affairs Ian Long clarified today that TouchTone betting would not be impacted by the proposals.

“TouchTone is a phone betting service and is not closing. We currently have a small restricted ‘phonebet’ service which still manages person-to-person betting via phone. This is proposed for closure.”

While the TAB stopped taking phone betting through operators on August 1, 2016 , some VIPs and people with medical conditions have still been able to call. Axing that service would be a terminal blow for impaired punters.

The remaining TouchTone service has continued to prove popular with millions of calls logged.

It has been a happy place for many of the mostly older people who like to bet small amounts - when the TAB earlier raised its minimum phone bet to $10, traffic through TouchTone doubled.

The number of people betting through TouchTone has steadily been shrinking - in 2016 only 10,000 of the TAB’s then 250,000 customers regularly used it.

Long stressed no final decisions had been made and the outcome of consultation with the industry will be confirmed in the week starting May 25.