David Attenborough, chief executive, Tabcorp, part two

In the second part of our extensive Q&A with Tabcorp CEO David Attenborough, the focus is on the Australian online gambling market and what UK regulators could learn from the country’s tax regime.

The chief exec argues that taxes in the UK might even be too low, asking: “Why have gambling if it isn’t supporting the community?”

Attenborough also questions the commonly-held wisdom that the UK egaming model is among the best in the world, pointing out that the racing industry is massively underfunded despite bookmakers generating large profits.

Finally, the Tabcorp chief throws his weight behind the in-play betting ban in Australia which has been widely opposed by corporate bookmakers including Hills and Ladbrokes.

eGaming Review (EGR): What would be your overview of the current state of the Australian online gambling market?

David Attenborough (DA): I think it’s going to stay competitive. The biggest positive for us is the change that has been foreshadowed in relation to legislation to explicitly prohibit online in-play betting and credit betting because we have been trading without the ability to offer credit and to bet live online. And that [live betting] is not because we haven’t got the technology, it’s because our legal interpretation was that it is illegal and the government told us so. We couldn’t offer in-play because we are a highly regulated business – so it’s good that legislation will provide clarification and stop the corporates doing it.

Pubs and clubs can continue to offer it, which creates a point of difference for retail, keeps the pubs and clubs going and it gets people there to watch sports with their mates. I believe this is quite an attractive model.

EGR: Do you think that is it for the foreseeable future with regards to live betting?

DA: I’d be surprised if it got approved online for a very long time. There has been polling done that shows the public doesn’t want it.

EGR: Can you see why the corporate bookmakers might be annoyed by the in-play ban?

DA: A lot of people find our stance hypocritical. However, the same people may say the French market is a bad model because it doesn’t deliver any value for the corporate bookmakers. But I would say it is probably one of the most successful. Why? Because the government is not judging it on whether a corporate bookmaker can make a profit, they are judging it on what it is giving back to racing and the government in taxes. The corporates might say it’s a terrible model because it doesn’t work for them, but the model exists to support racing, the community and return taxes to government.

EGR: And this is currently the case in Australia from your perspective?

DA: I think you will see more taxation coming in because you can’t have a model where 8 cents is earned in every dollar by racing if it’s with a TAB but only 1.5 cents is earned with a corporate. If you close the TAB tomorrow the industry wouldn’t get $780m from us and they’d only get about $150m from the corporate bookmakers from the same turnover.

EGR: But you’re still happy to offer in-play in the UK via Sun Bets?

DA: Looking at the UK from the outside in terms of what it’s doing for the country, I think it is actually flawed. It’s not leading to a sustainable racing industry, it’s not leading to funding for sporting bodies particularly well and it’s not actually paying the government a lot in taxes. It is definitely paying more now with Point of Consumption but the bookies fought that big time. So why have gambling if it isn’t supporting the community? Why have FOBTs if the money isn’t flowing back to the community? In Australia, a large proportion of the gaming machines are in not-for-profit clubs where the money goes back into the community.

EGR: Why do you think there are such differences between the UK and Australia?

DA: In the UK it’s viewed as a competitive market – that’s the lens, that these bookies and a lot of the media look at around the world. They think the UK model is really good and question why Hong Kong, for example, doesn’t open up. The reason it doesn’t is that its model is far better because it generates huge amounts of money for racing and is one of the largest contributors to charity in the country. A competitive bookmaker model wouldn’t deliver that. Where the corporates have got it wrong in Australia is they think it’s just a market and should be allowed to trade as one – it’s not, it’s an industry that needs to lead to sustainable funding.

EGR: Is this why the UK racing industry is struggling at the moment?

DA: It’s massively underfunded. The Authorised Betting Partner scheme is a small model to get some modest funding but it’s not going to deliver the hundreds of millions it actually needs.

EGR: What do you think will happen following South Australia’s adoption of PoC?

DA: You’re certainly seeing a lot of activity against PoC by the corporate bookmakers. We are supportive of it if it’s implemented in the right way and we are obviously spending quite a lot of time looking at that. The right way is that you wouldn’t want it to just sit in one state; you’d want every state to do it, otherwise businesses such as ours are essentially paying double taxation. The South Australian model has two principles that seek to ensure racing industry sustainability – firstly that the racing industry is no worse off and secondly that the TAB, which provides the majority of racing industry funding, is in about the same position following the implementation of the tax. We support these principles.