In formulating its comprehensive report into gambling in Australia, the Productivity Commission received 264 submissions from all parts of the community. Represented were the views of private individuals, wagering and gaming companies, licensed clubs and racing industry bodies.

From a racing industry perspective perhaps the most interesting outcome of the release of the Productivity Commission's report on gambling was this quote from Racing NSW CEO Peter V'Landys:

"The Productivity Commission allowed presentations from a myriad of wagering operators but at no time sought to provide Racing NSW with the opportunity to make a presentation on behalf of its 50,000 participants."

V'Landys fails to point out that Racing NSW did in fact make a submission, which was mostly ignored, much to his chagrin.

In terms of poetic justice he might like to reflect on the very limited consultation process that Racing NSW engaged in when formulating its race fields strategy. Submissions were not considered from any wagering operator other than TabCorp and the one provided by Betfair was ignored.

No other wagering operator had any input into the decision making process regarding the fees to be charged by Racing NSW on race fields.

The Productivity Commission did in fact consider the consequences of wagering operators not paying any contribution to the racing industry.

The report said: "This poses a risk to the longer-run viability of the racing industry and would have detrimental consequences for the communities where racing plays a key role. More importantly, such a decline would also adversely affect consumers of wagering and racing products.

"The granting of monopolies and, more recently, race-fields legislation that mandates payments, have addressed the free-riding problem. However, these arrangements are anti-competitive and reduce the scope for entry by innovative suppliers offering lower prices to consumers."

However the broad thrust of the Commission's report is the impact of gambling on the whole Australian community, particularly the social costs associated with problem gambling.

It seems self evident that "the plight of 50,000 NSW Racing participants", as V'Landys put it, has to be balanced against the plight of millions of Australian punters being forced to pay over the odds for their wagering because of anti-competitive actions such as those of Racing NSW and the NSW state government.

Fortunately for those punters, the Productivity Commission report has arrived in time for it to become part of the discovered documents in the Federal Court cases brought against Racing NSW by Betfair and Sportsbet.

The report's recommendations and especially its finding that race field fees are anti-competitive will undoubtedly be considered by the Federal Court.

In the meantime, the report's recommendation that an independent national funding body be established for the racing industry is very much in accord with a call by TabCorp in its submission. The idea of a levy collected by such a body being based on gross profit is not.

Racing NSW is furious that any party would want to dictate what it should charge for its racing, saying:

"The two most ridiculous recommendations are that an independent organisation set the price of that racing product. Does that mean every commercial operation in Australia could have its price set by someone other than themselves - which could send them broke?"

Given that Racing NSW is currently charging double the amount of Victoria for roughly half the quality of racing suggests that its high time that control of such pricing be placed in the hands of an independent body before Racing NSW sends itself broke.

Even more so that Racing NSW expects to be paid handsomely for its own racing but will not pay for anyone else's.

As it is, the cost of its failed strategy in legal fees and lost opportunity for racing in New South Wales is already immense, but pales into insignificance compared to the burden on punters by the enforcement of a high cost wagering regime.

Courtesy of BILL SAUNDERS of TVF, 22/10/2009

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