The marketing association between BetFair and TOTE Tasmania works better than expected.

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Old MO post on that.

Previous blog posts by Chris F. Masse:

  • Psstt… Spot that comment, on Google News, about… “bellwethers”… from a political scientist.
  • INSIDER’s STORY: The insightful strategic business report about The Evil Empire that Henry Berg does not want you to see
  • Prediction markets are about lowering transaction costs. That’s how sports come in.
  • The birth certificate of the next president of the United States of America –maybe
  • The term “event markets” sucks —and the uncritical thinkers using this crappy term suck too.
  • CLIMBING HIS WAY TO THE TOP: Erik Snowberg is now Assistant Professor of Economics and Political Science at California Institute of Technology.
  • Unlike other countries, the United States of America defends the freedom to offend in speech.

Tasmanias Prime Minister who licenced BetFair Australia departs abruptly.

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Mercury + The Austrlalian

Hello to our readers from Down Under.

Previous blog posts by Chris F. Masse:

  • American Enterprise Institute’s Center For Regulatory And Market Studies (Policy Markets)
  • IIF’s SIG on Prediction Markets
  • Science
  • Why did prediction markets do well in the pre-polling era, professor Strumpf?
  • Mozilla FireFox users, do you have trouble downloading academic papers (as PDF files) from SSRN?
  • “Impact Matrix. Used to collect and gauge the likelihood and business impact of various events in the very long term.”
  • Ends and Means of Prediction Markets — Tom W. Bell Edition

Australian billionaire James Packer, who owns 50% of BetFair Australia (thru PBL), has quit the Church of Scientology.

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The Sydney Morning Herald:

However, observers suggest Mr Packer&#8217-s expanding casino empire has presented issues difficult to reconcile with Scientologist beliefs. Scientology&#8217-s founder, the science fiction author L. Ron Hubbard, denounced gambling. &#8220-An obsessive gambler is a psychotic just like a drug addict or an alcoholic,&#8221- Hubbard wrote in 1977.


Old BBC story

Previous blog posts by Chris F. Masse:

  • Become “friend” with me on Google E-Mail so as to share feed items with me within Google Reader.
  • Nigel Eccles’ flawed “vision” about HubDub shows that he hasn’t any.
  • How does InTrade deal with insider trading?
  • Modern Life
  • “The Beacon” is an excellent blog published by The Independent Institute.
  • The John Edwards Non-Affair… is making Memeorandum (twice), again.
  • Prediction Markets = marketplaces for information trading… and for separating the wheat from the chaff.

BetFair Australias spin doctor tells all about their payments to the horse race industry.

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Andrew Twaits, director of corporate and business affairs at Betfair [Australia], writes:

Re. &#8220-High Court shock for the racing industry&#8221- (28 March, item 20). I wanted to drop you a note to clarify some important facts following your article in the Crikey newsletter.

Towards the end of your article you said, &#8220-&#8230-Betfair have offered to pay a fee of 27 cents out of every $100 bet. The TAB currently pays a fee of $5 in every $100 wagered!&#8221- Both those statements are false.

First, Betfair offered Racing NSW a product fee based on a percentage of gross profits- not turnover. We have never offered to pay Racing NSW (or any other racing body in Australia) a percentage of our turnover.

Second, the TAB does not pay NSW Racing or the NSW Government as a percentage of its turnover. It makes its payments as a percentage of its revenue – just like Betfair has proposed. See the Betting Tax Act (NSW) 2001 to see exactly how the TAB is taxed. The requirement to pay product fees to racing based on revenue is found in the Racing Distribution Agreement between the TAB and the industry – not surprisingly, we don’t have a copy but the payment model is referred to in Figure 20 of the Wagering Industry Review Issues Paper published last week by Alan Cameron AM. You can read a copy here.

To understand the practical difference between the TAB paying a percentage of turnover vs. a percentage of gross profits, you need only consider how much money goes to the racing industry or government when the TAB runs a zero take-out promotion such as &#8220-Fat Quaddies&#8221-. The result is that it doesn’t matter whether they &#8220-turn over&#8221- $100,000 or $10 million&#8221-, the industry and government receives nothing – because the TAB makes no revenue. That’s not a criticism of the TAB, they do it to get their aggregate takeout rates below the statutory threshold, and the promotions are great for racing, but it does highlight the false nature of the conventional wisdom that the TAB pays on turnover.

In relation to our offer to Racing NSW, its worth pointing out that Racing NSW has declined to tell anyone what they believe we or any other interstate wagering operator – including bookmakers and TABs – should be paying for the &#8220-right&#8221- to cover NSW racing. Nor will they say publicly whether they think that any interstate wagering operators who do pay a fee should be able to advertise, as the local operators can do.

As a final point, before we were licensed in Australia, we offered to pay every State racing body 20% of our gross revenue (from our global customer-base related to betting on their races. That offer was rejected and discussions were cut off. We accrued product fees for the racing bodies at that rate the entire time we were licensed and we still hold them in trust. To date, only Tasmanian Racing and RVL have accepted the accrued product fees.

UPDATE: Deeper analysis by Bill Saunders&#8230-

The economic model that BetFair Australia operates under does not compensate the industry for putting on the show.

No Gravatar&#8230- said some kind of horse racing official from Down Under.

Via mister Betting Market.

Previous blog posts by Chris F. Masse:

  • Play-money prediction exchange HubDub is a phenomenal success.
  • BetFair Australia’s spin doctor tells all about their payments to the horse race industry.
  • Meet Jeffrey Ma (at right on the photo), the ProTrade co-founder, and whose gambling life is the basis of the upcoming movie, 21.
  • Independent production company seeks deep throats to spill beans on online poker industry and BetFair Poker.
  • BetFair-TradeFair hire Bo Cowgill in an attempt to improve their ranking in Google web search results.