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NZ Government looking to wreck sports trading

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  • NZ Government looking to wreck sports trading

    The New Zealand Government is wanting to clamp down on sports betting. Clearly they have no idea what they are talking about, but this sort of carry on could do a lot of damage. I don't know what makes them think they have a right to do this.

    Check out the links below.

    http://www.stuff.co.nz/business/indu...es-to-pay-fees

    http://www.scoop.co.nz/stories/PA151...-board-agm.htm

  • #2
    This speach here touched upon that.

    I guess this is the crux of the government's point.

    The Strategy has always emphasised the need to address gambling-related health inequities, particularly the relatively high prevalence of gambling harm among Māori and Pacific peoples.

    The 2012 National Gambling Study confirmed this higher prevalence, and concluded that such inequities had persisted since the first national gambling study was conducted in 1991.

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    • #3
      Thank you for the link. Although the NZ Government is concerned about gambling addiction, that wasn't the focus of the links I provided. Their main concern is the loss of income their TAB is suffering as a result of overseas internet based sports brtting sites. I was amazed to see that their "independent" working group spent months studying the issue, but their recommendations show they still haven't got the slightest clue what the sports trading sites are all about. Therefore their recommendations would be a disaster. I wrote to the ministry back in December, laying out the error of their ways, but still haven't received a response. The text of my letter is below.

      The Minister for Racing
      Parliament Office
      Private Bag 18888
      Parliament Buildings
      Wellington 6160

      Dear Hon Nathan Guy,

      I read with astonishment and dismay the recent findings of your “independent working group” looking into offshore gambling activities and your resulting conclusions.

      First of all, I note that this “independent” working group contained two members of the Racing Board and one from Sport New Zealand – the very organisations that stand to gain from your intended actions. This is about as conflicted as you can get. Add to this that you are clearly focused only on supporting the New Zealand Racing Industry. It is abundantly clear from the whole tenor of the report and your words that there is no balance or fairness to your intentions and that you regard offshore gambling as nothing more than a threat to be extinguished.

      Offshore on line betting sites

      Probably the most surprising aspect of the Working Group’s findings is an apparent complete ignorance of the way offshore betting sites operate, despite months of research. Most are peer to peer trading sites, where users are able to trade both sides of an outcome to try to generate a profit.
      As a very simple example you could back Team A (bet that they will win) for $200 at $1.50, then lay them (bet that they will not win) for $201.34 at $1.49. In this way you have locked in a profit of $1.34 whatever the outcome. However it took two $200 bets to achieve the profit. Your Working Group’s recommendations are that a fee be charged on each of the $200 bets. Doing so would render the whole process of trading impossible. Also note that not all trades are winning trades, so the actual profit on turnover is likely to be far lower than the 0.34% in the example above. Typically a trader will make many such trades on a single market. Sports trading websites make their profits by charging a fee on the net outcome of a market, not on each trade. Thus they preserve the integrity of the process.

      One of the features of any betting market (and any share market for that matter) is that any action on the market affects the market. You wrongly assume that you can expect to take a certain slice of the action from these offshore agencies without affecting the market. In reality your actions would effectively kill the market. You would get no return and you would destroy the enjoyment and challenge of sports trading for many thousands of New Zealanders.

      Your conclusions as to why people choose offshore betting agencies rather than the TAB are also completely wrong. It is not just because of the better rates, although they are important. It is certainly not because of a far wider variety of markets on a particular event. For example a typical English Premier League game may have about 88 markets available on Betfair. By the final whistle at least 99% of activity will have been concentrated on only four or five of those markets.

      The reason people flock to these sites is the ability to trade, the ability to apply real strategies and even the prospect of actually winning. They are also an opportunity to learn good money and personal management skills. There are many thriving on line communities discussing all sorts of things relating to betting and trading. I couldn’t see anyone who has experienced on line trading ever returning to the TAB, even if the trading experience was closed off to them.

      Problem gambling

      One of your complaints is that these online agencies don’t contribute to New Zealand gambling support. Betfair has a very extensive gambling support system for those struggling with gambling addictions and problems. Services include access to counselling as well as a wide range of blocks and limiters. I’m sure all of the other sites have similar provisions and I’m also sure they have to comply with strict laws around these issues. Having full access to users’ activity histories, they are also in a prime position to detect problem gambling. So to complain that they don’t contribute to assistance programmes for problem gamblers is completely untrue. This is also a point your Working Group appears to have missed. Therefore to demand that the overseas companies contribute to funding parallel systems in New Zealand is unreasonable.

      Online sports trading sites tend to attract people who think more carefully about their betting activities, so users of these sites are naturally less likely to become problem gamblers than those using the TAB. In fact I would argue that the way the TAB is set up puts their customers at far higher risk of developing gambling problems than the trading sites.

      The New Zealand TAB

      The New Zealand TAB cannot currently compete with sports trading sites and frankly I am surprised it still exists. The overround they use is enormous, so the whole system is set up to ensure punters lose. If they are to become competitive then the changes need to be fundamental, not just window dressing.

      The two types of bet the TAB like to advertise in the media are enormous single bets such as the six figure sums wagered in the recent Rugby World Cup (something that is not generally possible on sports trading sites) and successful long-shot multi bets where someone wins thousands off a ten dollar bet. Both of these are very high risk and very poor betting practice. Multi bets compound the overround for each additional single bet placed, taking the potential payment further and further from the actual odds of the successful outcome.

      You say that the TAB has costs that the online agencies don’t have. Maintaining over 700 physical outlets is surely a cost they choose to pay. If there are legislative costs then you, as the Government, are surely in a position to alleviate those. All of the additional costs which you say the TAB incurs are within your control to do something about. You also have no idea what costs the online sites incur (for example many events need to be actively monitored from start to finish), so you cannot make an accurate comparison. Until the TAB can offer a betting experience similar to the sports trading sites they are going to continue to lose out to them.

      The New Zealand Racing Board

      I have found that there is very little cross-over between interest in horse betting and sports trading. I have not the slightest interest in horse racing or the New Zealand Racing Board. Whatever the merits or otherwise of the organisation, I find it highly offensive that they should feel entitled to take a slice of my betting activity. Do they want to steal from my bank account too? If their position is due to some form of legislation, then that is completely unfair and needs to be rectified.

      Conclusion

      Your Working Group recommendations and intended actions seem to stem from an attitude that offshore betting agencies and those that use them are somehow traitors to your cause and need to be fought aggressively, even though they are outside your jurisdiction and have nothing to do with the NZRB. Despite months of investigation the working group clearly failed to understand the trading sites and reached bad conclusions. Their recommendations would be a complete failure for everyone. The many thousands of us who have signed up to these sites have simply found a better way to engage in betting activities and have exercised our freedom to do so. The trading sites have found a very popular product and are doing very well with it. What is wrong with that? Surely that is all in line with the National Party ethos?

      Unless the TAB makes massive fundamental changes to the way it operates and the products it provides it will continue to lose ground. Any uneven playing field claimed is surely within the power of the TAB and the Government to rectify by improving their side of the equation rather than pulling everyone else down. Surely it is far better to up your game rather than continue to flog a dead horse and then try to shoot the rest of the field to make it even.

      Regards,

      jmf

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