The following letters have been forwarded in recent times to relevant parties nationally in Australia or in the States indicated, including to race clubs and politicians.  Many replies have been received but they have not been included here for reasons of brevity and commercial confidentiality.  The letters address the following main issues, among others:

1.    26 May 2006:             A letter, widely distributed to the Racing Industry, journalists and politicians about revenue, betting exchanges, new media and merging of parimutuel pools.

2.     7 November 2005:    Response to the Tasmanian Government's announcement of plans to introduce legislation to enable the licensing of betting exchanges, including commentary (in addition to 3. below) on our view of their disadvantages and the alternative offered by the SPT.

3.    15 July 2005:              Betting exchanges and our view of their disadvantages.  Also, licensing issues and the alternative offered by the SPT.

4.    14 September 2004:  The sale of Cheltenham racecourse in South Australia, particularly detailing the view that the sale is quite unnecessary given the potential offered by the SPT and the lack of any valid reason for failing to introduce it.

5.    26 November 2003:   The takeover of NSW TAB in the context of the view that, despite the purported benefits of a large single pool, separate pools are actually an advantage.  Furthermore, the advantage is considerable if the SPT is operating on each of those pools.

Dear Sir/Madam

The Racing Industry currently faces very serious issues that have profound implications.  These include betting exchanges, new media, possible further merging of parimutuel (TAB) pools, the Victorian wagering licence review and the interplay of these factors.  These issues are not only relevant to the Racing Industry and State politicians because of the revenue and employment implications but also to Federal politicians because they relate to communications law and Internet betting.  This letter is therefore being widely distributed to politicians, journalists and members of the racing industry.  A copy can also be viewed at www.setpricetote.com >> NEWS.

The warning lights are flashing.  But a positive result is possible.  Particularly relevant at this time is the Set Price Totalisator (SPT: see link above), given that it can provide multiple fixed prices per race, better tote/variable prices, and a better and fairer product in general.  Importantly, it can provide the full rate of totalisator commission and is expected to increase turnover by 25 – 50% on the pools where it is applied.  Revenue should increase even more than that given that no extra race meetings, market makers etc are needed.  New media opportunities would be particularly beneficial in conjunction with the SPT.  Prize money should be boosted, not cut back; the sale of assets such as Cheltenham racecourse is not necessary!

The risks of betting exchanges:  Apparently even greater than currently portrayed.

We share the view that betting exchanges are a great danger in several ways, particularly regarding wagering revenue.  As indicated below, any promised revenue is miniscule and also, the risk is that the market will open up to the many who pay no fees at all.  And, of course, there is the important integrity issue.

Even if more than one State derived revenue from betting exchanges, they would have to generate up to 16 times as much turnover as they “cannibalise” from tote pools just to maintain the present level of overall profit.  This is indicated by the returns offered by Betfair to Racing (0.27% on turnover for Betfair compared to 4.5% for the TAB (Australian; 5.11.05)), and also by the 1% betting exchange commission already advertised on the Internet compared to about 16% for TABs (for more see www.setpricetote.com >> NEWS >> letters dated 15 July 2005 and 7 November 2005).  That is not competition; competition presupposes a level playing field, namely equal payments on turnover.  And even if such an enormous increase in turnover was possible, wouldn’t it have implications for problem gambling?

Importantly, new technology is upon us for betting via mobile phones, mobile Internet connections and pay-TV.  Why would only the 5% of turnover on the Internet be at risk and not the 20% or more via the telephone, and even the rest in PubTABs etc?  Why wouldn’t punters in pubs, clubs, at home and on the golf course bet by mobile Internet/phone if they could easily compare prices visually from various sources and lock in a better price?

Internet companies such as betting exchanges like Betfair need to have exposure for their products and to establish a presence in a market.  Betfair can now achieve that because they are licensed in Tasmania and can advertise.  That opens the door of legitimacy, awareness and brand recognition for them.  It will become increasingly difficult to turn back the clock.

Won’t licensing one betting exchange create much greater awareness of the others?  Won’t punters then look for cheaper, unlicensed exchanges?  Commission of 1% has already been on offer.  How low will it go?  Betting exchanges have only been around for a few years but already there are dozens of them.  Soon there could be hundreds.  How can licensing one (or even a few) of them control the others?  Punters don’t seem to care much whether there is a licence.  After all, they were wagering on Betfair while it was unlicensed.

Once a market presence is established, why would betting exchanges want to be licensed and voluntarily pay a high percentage of their profit in tax etc?

There is also the well-recognised issue of integrity, which is a broad problem in itself (see the letters at the above link) and also with respect to public confidence.  If public confidence is undermined, there could be a substantial negative effect on wagering revenue, the Racing Industry and its employment levels.

New media:  Potential benefits, considerable risks.

Clearly new media opportunities such as interactive betting via mobile phones, mobile Internet connections and pay-TV (or free to air TV) offer potential for a better service to the punter, and increased revenue for the Racing Industry and State Governments.

However, there are considerable potential risks that could swamp any benefits.  Betting exchanges and bookmakers already use such media and could do so much more in the future as that medium grows.

Obviously, the greatest benefit to the Racing Industry and State Governments will come from the highest revenue source, namely TAB parimutuel pools.  So, maximising that turnover should be the greatest priority.  Currently, there are 3 TAB pools: Unitab, SuperTAB and NSW TAB.  But, unlike the SPT, they are only able to offer one price for a runner per pool, namely the final price.  And, that price is uncertain until after the race (i.e. it is a variable price).  But bookmakers and betting exchanges can offer many different fixed prices for a runner per race, and punters can lock in a price with which they are satisfied (fixed odds betting).

It is a big problem that low-margin betting exchanges and/or bookmakers can offer multiple fixed prices for a runner which are better than TAB prices while, without the SPT, each TAB is limited to just one final (uncertain) price per runner.  The new media will emphasise these disparities.

Further merging of parimutuel pools:  Is the claimed benefit real, or is it a danger?

The merging of the two largest pools, SuperTAB and NSW TAB, is currently being reconsidered.  Typically, the reason given for merging pools is to attract big punters.  With big pools, big punters could be more sure of the prices that they are going to get when they make very large bets that reduce the odds.  Apparently therefore, rather than considering the multitude of average punters, the ones being considered are a small minority of big punters.

But does the claimed advantage of big pools amount to anything at all?  The purported advantage is in providing stable prices.  But won’t big punters claim any benefit resulting from big pools, bet even bigger as a result of their capacity to do so and their winnings, and still badly affect the prices for average punters?

But there are even more fundamental and important flaws in the proposal.  By far the greatest attraction for big punters would be the races with the biggest pools, typically feature races with the biggest prize money.  That is precisely where the prices are already more stable and where much more of the pool is provided by recreational punters, who are less concerned about the price that they will get.  The classic example is the Melbourne Cup.  Therefore, this proposal would provide the most stable prices precisely where they are needed and wanted the least, namely on the less frequent feature races which already have big pools.

Fixed odds provide totally certain prices, which big pools can’t do.  Price certainty is needed the most on the multitude of average races.  There are no big pools on such races, only average to small pools where prices are the most volatile.  But there is every reason to believe that the SPT can provide fixed odds on quite small pools, even as low as $1,000.  Therefore, it can provide fixed odds on many average to small pools that need them the most.  Of course, the SPT can also provide fixed odds on even the biggest pools.

It is very important to realise that there would be significantly fewer prices available on TAB pools if the proposal to merge the two largest pools went ahead.  Worse still, if all pools merged there would be only one such price.  So, on the very pools that generate the greatest return for the Racing Industry and State Governments, there would be much fewer chances to compare prices, if any.  Instead, wouldn’t punters, particularly arbitragers, shop around between bookmakers and betting exchanges for the best price?

This problem will grow considerably if, as expected, average punters increasingly bet via means that allow greater visual comparisons to be made between prices (e.g. mobile Internet/phones and pay-TV).

Crucially, the monopoly/oligopoly nature of the totalisator environment already severely discourages innovation such as the SPT and better service to the customer.  Greater merging of the pools will magnify that problem substantially.

Yours sincerely

J.D. Hall

Marketing Director

SPT Management Pty Ltd (ACN 075 087 580)

info@setpricetote.com;  (08) 8379 1363 (Phone/Fax, Answer)

VERY URGENT

Dear Sir/Madam

I refer to my previous email dated 15 July 2005.  I note that the Premier, Mr Lennon has announced that Tasmania will licence betting exchanges.  In our view, there are at least two major problems with this proposal.  These problems are so clear that they can be easily seen.  And this situation has arisen while a much better alternative is not being properly addressed.  An inquiry into all of these issues ought to be a minimum requirement.

Integrity:

One justification given for the issuing of licences to betting exchanges is that betting exchanges can already be accessed from Australia and so it is better to regulate them so as to guarantee probity.  However, this argument is flawed at a fundamental level in several ways.  For example:

·         It is assumed that regulating one or more betting exchanges will result in suitable controls.

One of the problems is that even though the betting exchange concept has only been around for a few years, already there are dozens of them (at least 35 currently).  Soon there could be hundreds.  Will Tasmania be able to regulate them all, or even a small fraction of them?

·         It will be impractical to take any effective action against any one or more of an innumerable band of punters, regardless of the touted “permanent digital record”.

It will be exceptionally difficult to obtain proof of wrongdoing when punters can legitimately or otherwise claim that they are merely backing their judgement, which is the whole basis of punting.  Also, corrupt punters can avoid suspicion by having others place bets for them (common even amongst honest professional punters) and they can avoid detection entirely by betting on cheaper unlicensed overseas betting exchanges.

·         Does anyone seriously doubt that betting exchanges make it much easier and more convenient to bet on a runner to lose and that this magnifies considerably the temptation to be corrupt?

In short, unless the Tasmanian Government is able to do something no one else can do, namely regulate the Internet worldwide, it is almost impossible to see how the proposed scheme is practical.  Has anyone ever heard of any punter being prosecuted anywhere in Australia under present prohibitive legislation?  Currently, problems in Australia are limited because there are only a few who are licensed to bet on runners to lose.

Revenue:

Another major basis for justifying the issuing of betting exchange licences is that by regulating them one can at least guarantee funds for local racing and sport.  However, similar fundamental flaws exist in this argument.  Indeed, smoke, mirrors and trinkets seem to abound.

·        The revenue promised is miniscule compared to the potential reduction in TAB distribution.

Betting exchanges will have to generate up to 16 times as much turnover as they “cannibalise” from tote pools just to maintain the present overall level of profit.  This is indicated by the 1% betting exchange commission already available compared to about 16% for TABs, and also by the returns offered by Betfair to racing (0.27% on turnover for Betfair compared to 4.5% for the TAB (Australian; 5.11.05)).  There could be billions of dollars in turnover and just a small profit.

As indicated in our previous letter, one of the major problems is that fixed odds betting is popular and it is believed that, despite the fact that betting exchanges will not suit everybody, they will “cannibalise” tote pools to a significant extent.  Of course, this is the situation for the Racing Industry in general, even if not for Tasmania because of Betfair’s guarantees.

·       Punters will still be attracted to unlicensed overseas betting exchanges.

Licensing one or more betting exchanges for any sport at all opens the door of legitimacy, awareness and brand recognition.  Awareness will encourage punters to seek out other, cheaper exchanges.  As indicated above, there are many exchanges already and 1% commission is being offered.  The fact that many punters have used Betfair while it has been unlicensed indicates that a substantial number of punters will bet with betting exchanges regardless of whether they are licensed or not.

Alternatives

The Racing Industry says that licensing betting exchanges will have a devastating effect.  Such an effect will not be showing up to any significant degree yet because Betfair’s turnover is still only a few percent of total wagers.  But if that has been achieved without a licence, how dramatically will their turnover increase with the extra exposure that a licence will bring?  In our view, a license should not be issued.

Competition involves some sort of level playing field.  That is not the situation in this case because of the structure of the industry and the accessibility of a potentially unlimited number of overseas cutthroat parasitic betting exchanges.  Competition is one thing, decimation is another.

The Set Price Totalisator (SPT; www.setpricetote.com) can provide fixed odds (set price) betting at the full rate of totalisator commission.  We estimate that it will increase turnover by 20 – 50% for pools on which it operates and provide even greater profits because there are few extra costs.  It also generates a multiplicity of set prices for any event which means that, especially if there are two or more totalisators in Australia using the system, the punter has a considerable choice as to the prices available rather than just one final price for each totalisator.  This will stimulate interest and turnover further.  Despite this, there has been no productive follow-up from Tasmania as a result of our approaches.

At the very least there should be a thorough inquiry into every aspect of this matter as tens of thousands of jobs are at risk when instead, there should be a considerable increase in prize-money and employment.

Yours sincerely

JD Hall

Marketing Director

SPT Management

info@setpricetote.com;  (08) 8379 1363 (Phone/Fax, Answer)

URGENT

Dear Sir/Madam

Apparently the Tasmanian Government, after consulting with the Tasmanian Racing Industry, will consider licensing one or more betting exchanges.  Betting exchanges are, of course, a form of fixed odds betting.

As you are probably aware, there is already a product available that can provide fixed odds and which has the considerable advantage of providing the full rate of commission that one would expect from a totalisator system.  Indeed, it has the further advantage that it integrates seamlessly with the existing totalisator system.  The product, of course, is the Set Price Totalisator (SPT); www.setpricetote.com.

It is expected that if fixed odds betting is freely available, it will prove to be significantly more popular than the variable prices provided by typical tote pools.

The Problem with the Inherent Attractiveness of Fixed Odds

The first question is:  Will fixed odds betting from a betting exchange, that is freely available on virtually an unlimited basis, decimate the tote pools and likewise decimate the associated considerable income provided to the Racing Industry?

The second question is:  How much more will this be so if such fixed odds betting is provided at much better prices (and therefore at a much lower commission rate) as is believed to be the case with betting exchanges?

It is exactly these sorts of concerns about the attractiveness of fixed odds that led to the preferred design for the SPT invention.  The SPT is specifically designed to provide fixed odds by integrating with existing tote pools.  But, because of concerns about the considerable relative popularity of fixed odds (among other reasons), it was designed to do this in a very particular way; it provides fixed odds at slightly lower prices and variable tote prices at slightly higher prices in order to balance demand and give a fair result to all punters.  The relative prices are readily adjustable to suit local conditions.

That is, the SPT is designed to provide tote prices that are better than those at present and which will be better than the fixed odds to be provided on the same machine so that, overall, the commission rate is the same as it is now.  Importantly, it was considered that if the fixed odds were provided at the same level as the variable tote prices, or worse still if fixed odds were provided at a significant discount, then in a typical situation it would have adverse effects on the existing tote pool, perhaps very considerable adverse effects.

The Problem of Betting Market Integrity

A further important question is that of the integrity of the betting market.  The TABs have voiced strong opposition to betting exchanges on the grounds of integrity and it is tempting to be cynical about that if one believes that they are mostly just concerned about having their prices undercut and/or concerned about the attractiveness of fixed odds being provided by a competitor.

But one cannot escape the reality that betting exchanges would provide a far greater opportunity to bet on competitors losing.  The question would then become:  How big a long-term problem would be people using that opportunity in a corrupt way?

It would no longer be the case of a relatively small number of licensed bookmakers balancing their book or sometimes backing their opinion.  Instead, there would be a countless number of unregulated punters that would be difficult or impossible to adequately monitor.  For example, it would be relatively easy for corrupt punters to get others to place bets for them so as to deflect attention.  With scandals comes the considerable risk of negative effects on revenue when punters lose confidence in the system.

The Wasted Opportunity, Other Risks and Future Possibilities

The SPT has been available for a significant period of time.  Yet it has not been implemented despite the potential for a very substantial improvement in a major Racing Industry product and therefore in funding.  This is the cause of considerable frustration.  All the more so if the Racing Industry is currently getting a very poor deal.

But the question with betting exchanges is:  How big is the risk?  Once you open up the industry to one, many others will follow, licensed locally or not.  And many will be trying to undercut other competitors to break into the market.  Won’t many punters, now aware of this new medium and allowed to bet freely on it, then naturally shop around and still go to unlicensed overseas operators with better prices anyway, thus precipitating a downward spiral?

Fortunately the SPT is a very attractive alternative.  And it is believed that it will increase turnover and profit to the Racing Industry considerably.  If only a local TAB would introduce it!

If the major local TABs will not, perhaps it will be necessary to gamble on betting exchanges and try to minimise the risk by specifying very particular conditions.  Hopefully, Governments and the Racing Industry have sufficient influence to avoid that scenario.

Yours sincerely

JD Hall

Marketing Director

SPT Management

4.  Proposed Sale of Cheltenham Park  Racecourse (South Australia)  -  14 September 2004

The South Australian Jockey Club (SAJC) has proposed to sell Cheltenham Park and will put the matter to a vote of members on 21 September 2004.  The following letter has been forwarded to  Racing Industry participants.

Dear Sir/Madam

Absolutely ridiculous!  Cheltenham up for sale!  Doesn’t it remind you of the TAB sale process?  Doesn’t it lack any real solution?  Isn’t it just a quick fix and totally unnecessary?

Here we have the Racing Industry, one of the State’s biggest employers and source of entertainment for thousands, absolutely struggling, especially compared to Victoria.

There is controversy about integrity and threats to racing revenue from low margin betting exchanges and other gambling on the Internet.  And a lot of money owed to the Government.

Yet at the same time we have the Set Price Totalizator (SPT), which was invented locally and is attracting attention from around the world.  It has the potential to multiply the return to the Racing Industry (more turnover, few extra costs) and put this State in the upper echelon of racing.

So why isn’t the SPT being put forward as the answer to many of the financial problems in South Australian Racing?  It wouldn’t be because various powerful vested interests are trying to arrange things to suit themselves would it?

It’s not as if there is no demand for the SPT because over 4,000 South Australian punters signed a petition in a relatively short time, asking for the SPT to be introduced.  If it was because the SPT couldn’t work you would expect valid criticism from many top racing people who have examined it, but that hasn’t happened.  And, please, don’t let anyone tell you that it is because we aren’t willing to negotiate.

The SPT is a revolutionary invention that can integrate set price (fixed odds) betting seamlessly with traditional tote pools to give the full rate of commission, better tote odds (better variable prices), and a much more appealing product;  see www.setpricetote.com for more details.

Cheltenham is irreplaceable.  The SAJC doesn’t own Victoria Park and will be at the mercy of outside forces forever afterwards.  Please do all you can to encourage SAJC members to vote against the sale of Cheltenham and to push for the introduction of the SPT instead.

Yours sincerely

J.D. Hall

Proposed Australian TAB Mergers  -  26 November 2003

The following letter, substantially the same as a letter dated 19 November 2003 (some minor changes only), has been widely distributed to newspapers, race clubs, analysts, politicians etc.

The two paragraphs immediately below were included as a preamble in letters to Federal politicians.

I believe that the following widely distributed letter is relevant to you as a Federal politician with regard to several major issues: The Racing Industry's very large level of employment; Competition and Gambling policy; Protection and justice for innovators, especially individuals vs. major corporations and, disappointingly, even when politicians are involved; and Australia's reputation, particularly relating to the previous item.

Importantly, we are now aware of other ideas, unrelated to gambling, that we believe would be of considerable benefit to governments and to the community.  However, if we said anything much about them, it would be highly likely that the extremely negative consequences we have already had to endure over an extended period would be repeated.  Particularly relevant are the patent and legal systems and the degree to which their current types and levels of protection are effective.  As a result, it seems that the benefit of these ideas to the wider community will be very limited for a long time to come.

26 November 2003                    URGENT:  re Proposed Takeover of (NSW) TAB Ltd.

Dear Sir/Madam

The TABs seem intent on consolidating via a takeover of NSW TAB, and it is extremely important to ask: Is this mostly or only in the interests of the monopoly or near-monopoly that will be created?  Indeed, does the associated hype have so much spin on it that the world’s best bowler, Shane Warne, would be proud to call it his own?  If there is a much better alternative (see www.setpricetote.com for details), why isn’t it being debated more openly?  Vested interests wouldn’t have anything to do with that would they?

This situation illustrates clearly that Australia is at a cross roads on a number of very important issues.  The following questions relating to the proposed takeover are relevant and cry out for answers:

·         Isn’t the basic assumption of the advantage of a big pool that underlies the bids actually flawed?

·         The Racing Industry generates a high level of employment, not only skilled but also unskilled.  How will that be affected by strategies that fall well short of maximising revenue?

·         As the source of funding concentrates, won’t control also concentrate more towards the bigger States, the bigger codes and the bigger clubs?  Won’t already stifled competition actually regress?

·         Won’t the small, fast growing codes be quite disadvantaged if big pools are substituted for fixed odds?

·         Will average punters continue to be denied the comprehensive fixed odds service they clearly want?

·         Will Australia have a reputation of having fair and just systems that protect small players against big ones, or will our political leaders only be interested in justice when it is convenient?

·         Do innovation and innovators really matter in this country, or will they continue to be crucified by forces of superior strength while governments look on?

Further details of some of the more important questions include:

·         Isn’t it the case that there is no benefit at all to the Racing Industry, but only to shareholders, from the biggest claimed benefit, namely the rationalisation cost saving of $25 million - $30 million?

Importantly, the Racing Industry is the sector that the privatised TABs were principally supposed to benefit and support, an industry that is one of the largest employers in the country.  And, even for Tabcorp, the cost saving will only benefit shareholders at the end of the second year of operation.

·         Aren’t the benefits of a big pool actually non-existent or very small, because there will be much less opportunity for punters to shop for the best price? There are two issues:

o        Fewer TAB pools, or even less choice if there is only one:

It is only natural for people to shop for the best price, and many punters do.  But they are currently restricted because there is only one TAB price for a runner, namely the single uncertain (variable) price at the end of betting.  So, tote punters are restricted to getting the best price by shopping between the pools.  If one TAB pool eventuates, as would seem quite likely if either one of the mergers proceeds, average punters won’t be able to shop between pools for the best price.

The Queensland Government’s optimistic assessment of the benefit to the Racing Industry for the Unitab merger was “a likely boost of up to $10 million” [underlining added], a rate of only 0.4% (as their share of turnover of $7,200 million).  Perhaps the most realistic estimate, based on figures by an analyst, CommSec’s Derek Francis, gives a benefit of $8 million spread over all merged states ($7,200 million) – a rate of about 0.1%.     What a windfall!

o        Less fluctuation in prices:

Punters often become very annoyed when they bet on a runner at a particular price on the TAB and the price shortens.  The best answer to that problem is to give certainty in the price by providing fixed odds, rather than a big pool which still gives uncertain prices.  Punters want fixed odds.  Indeed, in only a short time, 4,000 punters signed a petition to Parliament for the Set Price Totalisator (SPT), which provides fixed odds on most or all races.

If fixed odds are offered on one pool compared to several, punters will have even less opportunity to obtain the best price because there will be less fluctuation in the prices.

·         If all the TABs or their pools merge, won’t there be a monopoly TAB either in practice or in effect? How good are monopolies at providing improved services to racing and the average punter?  And without improved products, how many more punters will be enticed to bet on the races?

·         One might have hoped that any “windfall” would have actually benefited the multitude of average punters so that they would enjoy punting more and then spend more disposable income on skill-based racing rather than mindless gambling or other forms of entertainment.  But isn’t this proposal actually to their detriment?

o        It seems that a relatively small number of big punters are the ones being considered.  Apparently, they want big pools so that they can be more sure of the prices that they are going to get when they make very large bets that reduce the odds.  Isn’t it true that these bets are often to the significant detriment of the average punter?

o        If there is a benefit, won’t big punters claim it, bet even bigger and still badly affect the prices?

·         Which of the codes will receive the most benefit, such as it is?  Won’t it be the one with the biggest turnover and hence the one to attract the really big punters, many of those big punters purportedly to be lured from Hong Kong and other Asian countries.  Will harness and greyhounds attract such punters?

What alternative is there?  Obviously, the Racing Industry will get the most funding from the highest revenue source, namely the TABs.  So maximising TAB turnover should be the highest priority.

The TABs will maximise turnover if:       1.  They provide the most attractive product available to them;       2.  Punters are able shop between them for the best price; and       3.  There are many chances to obtain a price during betting, rather than just one price at the end.

The first part of this three-pronged strategy is very important; not only can the SPT provide the full rate of commission for the TAB (and the Racing Industry) but it can also provide better prices for variable price punters, particularly early variable price punters.  This will make the system fairer for all and enable racing to compete far more effectively for the recreation dollar.

The second part of this strategy is achieved by ensuring there are a reasonable number of TABs, namely keeping three of them.  There are currently often attractive differences in prices between the TABs, sometimes quite large differences.  Such differences attract value punters and make the punting product more competitive.  How can punters shop for the best price between pools if there is only one pool?

The third part of the strategy can only be achieved by providing fixed odds betting on most or all pools, especially where they are needed the most.  Fixed odds betting is needed the most on the high proportion of average to small, everyday pools where prices are less stable.  The current alternative seems to provide fixed odds precisely where it is needed and wanted the least, namely on the infrequent big pools of feature races where much more of the pool is provided by recreational punters who are less concerned about the price that they receive, and where prices are more stable anyway.

Based on several factors, we have consistently estimated that, for average pools, fixed odds is likely to increase turnover by 25 – 50%.  But it is expected that the figure would be much less if there was only one tote pool.  Importantly, even for feature races there is evidence that fixed odds will increase turnover significantly.  For example, an estimate based on Unitab’s bookmaker-type fixed odds betting turnover on the last Melbourne Cup yields a figure of about 10 – 20%.

The best and most cost-effective way to provide fixed odds is via the SPT (www.setpricetote.com):

·         Many extra costs that hamper traditional bookmaker fixed odds systems such as market makers etc. do not apply. Importantly therefore, most of the extra turnover goes straight to the bottom line.

·         The SPT provides fixed odds not only for win bets, but for place bets and multiples as well.

·         There is every reason to believe it can even function on quite small pools, such as $1,000.  Therefore, it can provide fixed odds where they are needed the most, namely on average to small pools where prices are the most volatile.  Of course, the SPT can provide fixed odds on larger pools as well.

·         The SPT can provide numerous sets of fixed odds per race because it is believed that prices would typically be updated every 30 seconds or so.

In summary, it is believed that it would be a tragedy if the push for a single pool deprived punters of choice, and limited revenue to the important and employment-rich racing industry.

TABs have known about the SPT for some time.  There needs to be a thorough investigation into the circumstances surrounding the SPT so that the full facts are brought out into the open.  To this end, this letter has been distributed widely.  You will also find a copy at www.setpricetote.com.  But how popular will an investigation be with politicians, especially in NSW?  The inventor of the SPT, Grant Hall, is currently undergoing prostate cancer treatment, so please direct all enquiries to me at the stated address.

Yours sincerely