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Saturday, August 28, 2010

Australian Gambling, Marketing And Media Wars, by Greg Tingle - 29th August 2010

The Australian casino and gaming wars are taking on a new angle, with marketing and legal eagle X factors playing a bigger role in both the high end of town and at the coal face. Crown Limited and Tabcorp may be 'The Big Two', but Tatts Group is far from standing still, using the iron fist of the law to help protect their turf. Media Man and Gambling911 give you a close up look at the expansion of the Australian casino, gaming, marketing and media wars in the ongoing battle for the entertainment, gambling and internet dollar...

Australia's Tatt's Group would not hesitate to expand its betting operations into every state of Australia if the governments failed to stop a marketing company from offering betting on computer terminals in pubs, the company's chief executive has disclosed. And keep in mind, Australian governments have a long history of failing business, mums and dads and punters.

Recently Liberal leader Tony "The Bruiser" Abbott called the Labor government "incompetent", and street survey results indicate he's hit the nail on the head. As to whether Abbott will snatch the victory, hitting his own jackpot, is yet to be determined.

In the meantime the Victorian Commission for Gambling Regulation is prosecuting a marketing company, VenueNet, and a hotel owner for providing an "unauthorised instrument of betting", after seizing a computer kiosk with internet access to a betting website from a South Melbourne drinking hole aka pub. Don't get us started on whether drinking and punting mix, but Media Man will point out that its scientifically proven that drinking does effect the brain's capacity to make sound decisions.

Many media, marketing and gaming brains are pointing out that it was just a kiosk, and that it can provide access to gambling, just as it provides access to most of the world's websites via the www access... like your home or work computer!

A roll-out of the computers would undermine the state's exclusive retail wagering licence, which is currently held by Tabcorp, but is up for renewal. Tatts Group, which runs UniTAB in Queensland, South Australia and the Northern Territory, is among the bidding hopefuls. It's a bit like ABBA's 'The Winner Takes It All'.

The chief executive, Dick 'Moneybags' (MM tag) McIlwain, advised Tatts had lobbied governments to ensure devices such as that offered by VenueNet would be banned. Did the lobbying work? Gibraltar based PartyGaming, the world's leading listed igaming company has had mixed success with lobbying, but has invested millions over the years. 'Moneybags' understood the Victorian government was "waiting first" to see how the charges against VenueNet played out in a court of law. Yep, that's the important part punters.

"In Queensland they haven't had to resort to extra regulation, they've been able to use what [laws] they have," he said.

In its recent report into gambling, the Productivity Commission recommended states no longer issue exclusive wagering licences, as the monopoly arrangements were a "rare privilege", unfair to punters and no longer justifiable.

McIlwain went on to say he did not expect states to scrap the arrangements but if VenueNet succeeded, Tatts would retaliate. Yep, that means war!

"If VenueNet can come over the border, well, we'll jump the border too into NSW and Victoria and anywhere else that we don't have a licence," he said not mincing worlds. Let the battle begin... we will know soon, and watch out for gunfire and hand grenades, leading up to war head missiles.

Tatts posted a profit of $119 million, less than 50% of 2009's result, after writedowns of $165 million.

It also purchased the NSW Lotteries licence for whopping $850 million during the year.

Tatt's is performing strongly of late. In 3 months of operation, net sales, after prizes, were $156 million. Tatts top brass encouraged analysts, journos and the like not to rely on that figure for a full-year comparison, which would be closer to $625 million.

Quizzed about that figure and the $460 million NSW Lotteries reported for 2009, McIlwain said, "I'm not interested, I'm only interested in what we do."

Tatts purchased the 40-year licence for at least $150 million more than many expected. The deal included the rights to unclaimed prizes. Investors initially reacted negatively and it sparked controversy about whether Tatts had been treated differently to other bidders, as previously covered at Gambling911.

Tatts looks to be rising the stakes and we understand have put the world on notice that they are well and truly part of the Australian gambling wars, despite not actually owing a casino. In other areas they are a powerful player without question.

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Readers, what's your take on the situation? What's your favorite casino games and why? Tell us in the forum.

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Readers, know the odds, bet with your head, not over it, and have fun. Good punting.

*Greg Tingle is a special contributor for Gambling911

*Media Man http://www.mediamanint.com is primarily a media, publicity and internet portal development company. They cover a dozen industry sectors including gaming.

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