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Inevitable

Reaction

Understanding the Technology

Vested Interest Groups

Misinformation, Misrepresentations and Misconceptions

Inevitable

The SPT has considerable advantages over many other products and it is difficult to avoid the view that its introduction is inevitable. The advantages of the SPT reflect the importance of the industry in which it operates, the inherent attractiveness of set prices and the versatility and resilience of the SPT itself. Examples of these advantages include:

	Set prices are very popular
	The racing industry is a very important industry to the economy in many countries around the world, particularly as it is a big source of employment
	Demand for set prices can be controlled
	Early variable price bets can be encouraged to enhance the early pool should that be necessary or desirable
	The main form of the SPT is believed to be pari-mutuel in nature
	The relative level of overall benefit from wagering is much higher than for many other forms of gambling
	The rate of increase in profit should significantly exceed the rate of increase in turnover

But just because the SPT is inevitable eventually does not mean that you are likely to see the benefits of it in your local area any time soon. It has already been unnecessarily delayed for a significant period of time.

Reaction

Many in the industry, not only in Australia but also in other countries, from punters to administrators to trainers etc., have always provided a positive reaction to the idea of introducing set price betting on races. Therefore, many might think it strange that some people in high places have used their influence to prevent the SPT from being introduced, especially when the reasons do not seem to have been publicly explained and do not seem to have anything to do with the capabilities of the SPT.

The SPT has been shown to a number of experts in the racing industry and experts with mathematical and other qualifications, including a number of people with PhDs. Typically, the reaction has been very positive. Very few objections of any substance have been raised at all and it is believed that those that have been raised have been satisfactorily answered.

The late Colin Hayes was a world famous Australian thoroughbred trainer. He was for many years a strong supporter of set price (fixed odds) betting. An article entitled “Legend calls for fixed-odds betting” appeared in the Sportsman newspaper on January 16, 1998 and, at the time, he was aware of the existence of the SPT. In that article he was quoted as saying: “It seems inconceivably ridiculous to me, with the communications technology that has been developed in recent years, that we still do not have fixed odds totalisator betting..... it’s not if it can happen, it’s when will the racing administrators allow it to happen.” [emphasis added] and “Hayes said too many ‘red herrings’ and intense lobbying both politically and within the major race clubs put a hold on fixed-odds totalisator betting being introduced in this country.” Indeed Colin Hayes said a number of times that he could not understand the reasons why it had not been introduced.

Paul Brettell, Moonee Valley Racing Club’s chief executive addressed the Asian Racing Conference in Macau on the topic Racing 2010 and his speech was reported in the Sydney Morning Herald, February 5, 1999 as saying that by the year 2010 there would be “firmly established fixed odds betting through the tote.” Clearly he also was expressing the view that the set prices that can be provided by the SPT are inevitable. [top]

Understanding the Technology

One of the major problems in having the invention implemented is in having the capabilities and advantages of the SPT generally understood and recognised. This problem is at least double what it would otherwise be because of the influence of vested interest groups who repeatedly put forward misinformation to confuse the issue. [top]

Vested Interest Groups

It is believed that the SPT will be enormously beneficial to the general racing industry throughout the world. However, there are a number of groups whose sectional interests will be negatively affected if the SPT is introduced.

It will not be difficult for the reader to deduce who some of these vested interest groups are; one obvious example is illegal bookmakers (referred to as “SPs” in Australia). However, while it is clear to everyone who some of the other vested interests are, there are others that are not quite as obvious and some that can even be quite unexpected.

A number of the members of these groups have been well aware of the existence of the SPT for some time and have been making every attempt to undermine it. Typically, they do not engage in open debate about the topic but work behind the scenes, often secretly behind closed doors, wielding their influence in high places, particularly in some race clubs and in some political circles.

Indeed, such is the influence of some of these vested interests that a number of important decisions that defy logic and common sense have been taken by those in positions of power. Because of the amounts of money involved, it would not be surprising if there were attempts to corrupt the proper processes. The reader can make up his or her own mind as to whether that has occurred in any given set of circumstances. However, the extent to which these vested interest groups have been successful is disappointing and surprising given the supposedly democratic nature of western society. [top]

Misinformation, Misrepresentations and Misconceptions

One of the ways that vested interests have been able to influence the process is by going to considerable lengths to spread misinformation about the SPT and/or raise unjustified concerns about whether it can indeed make set prices generally available to the average punter. The extent to which this process has been adopted is an indication of the degree of their concern about the capabilities of the SPT. Several of the assertions they have put forward and which have then been repeated by others include:

The SPT would only be used for major events (big pools)

Just the opposite is the case; it is believed that the biggest benefit would be in small to medium sized pools.

The only reason for limiting the application of the SPT would be because the variable price pool was not big enough to support set price betting. However, it can be shown that even relatively small pools would be sufficient to enable set price betting to occur. It is believed that most of the turnover, at least on Australian tracks, is found in pools to which the SPT can be applied.

It would be in the small to medium sized pools where the SPT would provide its most valuable contribution and where betting would be stimulated the most because in those types of pools the prices would be less stable. Furthermore, those pools are the ones where the more discerning, regular punter bets most frequently. Larger pools would tend to have more stable prices and involve more recreational punters who would be less concerned about the price received.

The SPT applies to sports betting only

This is quite wrong. It is a red herring. Although the SPT could indeed be applied to sports betting, that is not where the greatest benefits are for the punter and for the racing industry.

The SPT was primarily designed to be applicable to the more difficult markets of racing where there is far greater turnover. While sports betting is a growing market, it still only accounts for a very small percentage of turnover compared to racing. Furthermore, typically it is very competitive and uses a bookmaker-type method. The result is a significantly lower level of gross profit and/or restricted operation. This means that sports betting accounts for an even smaller percentage of overall net profit than its share of turnover would indicate.

As a result, it is believed that if the SPT increased wagering turnover on racing by only 1%, it would produce a greater net profit than for a complete sports betting operation of a typical TAB.

It is also important to note that the SPT is applicable not only to win betting but to place betting and multiples as well.

The SPT is detrimental to variable price punters

Again, just the opposite is the case. The SPT has been specifically designed to be fair to all types of punter; it is believed to be a better and a fairer system. It is very flexible and can be tailored as required.

It is envisaged that not only the fairest way, but also the most practical way, to implement the system would be to ensure that variable price punters actually receive better prices. This would be in recognition of the fact that they don’t have the same advantages as set price punters given that they place their bets before the final price is known.

The SPT will not increase turnover significantly

Just the opposite would seem to be the case; the indications are that the increase in turnover will be substantial.

Regardless of that however, it is interesting to note that much effort has been put into sports betting by various organisations such as TABs in recent years. But it would seem clear that if the SPT increased wagering turnover on racing by only about 1%, it would produce a greater net profit than that for a typical TABs sports betting operation.

Put simply, if it was worthwhile pursuing sports betting with its relatively small increase in overall turnover, lower level of net profit and the chance of a loss, then how much more would it be worthwhile to introduce the SPT, especially when that is what punters want? [top]