National Tote deal promises more for racing, but key questions remain

Cover image courtesy of The Image Is Everything

News Corp revealed on Tuesday that Racing NSW CEO Peter V’Landys and TABcorp CEO Gillon McLachlan have brokered a deal that will see the setup of a National Tote, combining the tote pools of the NSW TAB (NSW), SuperTAB (Victoria, WA & ACT) and UNITAB (Queensland, SA, TAS & NT).

The aim is to offer better odds and better returns to both punters and the racing industry itself, and thus stimulate an increase in wagering.

“We are ready to make the National Tote a reality," McLachlan told racenet.com on Wednesday afternoon. "This will be a historic structural reform for the industry. A National Tote has been put in the too-hard basket for too long - together with the racing codes we are almost there."

While McLachlan still needs to seek final approval from state-based gambling regulators, it is believed that the National Tote is slated to kick off with the first Group 1 meeting of the 2026/27 season, Winx Stakes day on August 22.

Future-proofing racing

McLachlan has been working on the National Tote offering since taking the CEO role in 2024 and had last year proposed a July 1 start date for the scheme, but further delays and negotiations have pushed that back. Part of that is due to reports of the difficulty in convincing Racing NSW to come on board. The announcement this week heralds the regulator’s terms being met by TABcorp and an agreement to come to the table.

A Racing NSW statement was issued on Wednesday, as V’landys began a four-month leave of absence from Racing NSW while serving as interim executive chair of the NRL.

The statement announced a series of initiatives that the regulator believes will “future-proof” the racing industry in the state. They include extension of several key agreements through to 2031, including international pooling, free to air rights for 52 Saturdays, and continued funding of the now G1 Golden Eagle.

Racing NSW will give their approval for the National Tote, and in exchange will take over management of Sky Thoroughbred Central, with the promise of producing more promotional material for the industry. It has been reported by racenet.com.au that it will be “business as usual” for Queensland racing’s broadcasting on the channel.

“These announcements future proof the industry and ensure that our participants and clubs can continue to benefit from these important revenue streams,” said V’landys in the statement. “Further to this, more revenue for the NSW Thoroughbred Racing Industry is expected to be generated from the introduction of a National Tote.

“The totalisator is an important part of the wagering market, and the National Tote can further stimulate tote betting through larger pools which make the pools more elastic. This ensures better value and more opportunities for punters.”

“Change is hard, but there has been a genuine commitment from industry to get this right," McLachlan said in his comments to racenet.com.au.

"I want to acknowledge all three codes in NSW for the way they have leant in and engaged with us to reach an outcome that will bring life back to the tote and leave a lasting legacy for the racing industry.”

V’landys also highlighted the important role that Sky Thoroughbred Central will have going forward in promoting the Thoroughbred breed outside of racing.

The wagering picture

There has been evidence of punters asking for a nationalised tote since the 1990s, and for good reason. The idea is to create one, much larger pool that makes punters feel more safe about placing larger bets without too much effect on the odds.

However, the tote’s share of the wagering picture has been in decline over the past 10 years. The relative safety of fixed odds and the combinations on offer from bookmakers have drawn an increasingly larger share of wagering in that time. While the totality of wagering in Australia has ballooned, the structure of TAB’s contributions to this market have changed.

According to the Racing Australia Fact Book, in 2013/14, TAB recorded a total of $9.65 billion in wagering on Australian Thoroughbred racing, split between $2.64 billion on fixed odds and $7.01 billion in parimutuel betting on course, on the internet, and over the phone. At the end of the 2022/23 season, TAB’s total was $9.53 billion, but fixed odds had brought in $5.19 billion versus $4.34 billion for parimutuel betting.

In the same timeframe, the total wagering picture has grown from $15.6 billion to $26.37 billion. Of the latest figure, TAB’s parimutuel betting represents a 16.5% cut of the market, compared to the 44.9% share they had in 2013/14.

An incomplete vision

In addition, other corporate bookmakers can offer tote derivative products, where bookmakers offer odds based on what the tote is offering. By TABcorp’s own estimations, this market is worth the same again as TAB’s parimutuel services. TAB has reportedly approached other major bookmakers about pooling all tote-related revenue with them, but without much luck.

One advantage of split tote pools for punters has been the ability to shop around for odds. For example, historically the odds given for a Victorian-trained horse crossing the border to race in Sydney have been better on the NSW TAB than on the SuperTAB.

Different bookmakers using tote derivative odds have also offered different options, again by looking at how the tote differs across state lines. Punters have had the option to select where the odds are most in their favour - something that will be lost with the combination of all tote pools.

A further sticking point in the wagering picture is how exactly a National Tote will benefit racing. Racing Australia ceased to publish wagering data after the 2022/23 edition of the Fact Book and individual state regulators offer an opaque picture, as they publish their total wagering revenue as part of annual reports.

The point of consumption tax varies dramatically by state - 20% in Queensland and 15% across most other states - as does the pass through rate of how much of that tax is returned to the industry. With the introduction of a National Tote, it is unclear how this tote pool will be taxed and how that will be divided up between the states.

Rebuilding the tote

To get the most out of a National Tote, the product needs to draw more people back to using it. In a world where fixed odds offer certainty and other corporate bookmakers offer a range of exotic bets beyond the standard range that TAB do, the wagering operator needs to rejuvenate its audience.

Gambling advertising is under heavy scrutiny from the Australian government, with a partial ban on advertising online and on television announced by Prime Minister Anthony Albanese in April. The ban was met with widespread criticism in the media, mainly in that they do not go far enough. The proposed changes have yet to be implemented, but in order to reinvigorate its customer base and thus deliver the proposed benefits of a nationalised pool, TAB will need to consider how it draws those customers in.

Something else that TABcorp must be considering with the National Tote is the takeout rate. The takeout rate is a percentage of the tote pool automatically deducted by the TAB as its profit, which directly affects the amount each winning bet stands to win. If the takeout rate is 15% of a pool of $100,000, $15,000 is automatically deducted from the pool before it is divided between the winners.

If the takeout rate is dropped to 10% for that same pool, the worth of each winning bet automatically goes up. If this lowered takeout rate is combined by better advertising and better incentives that drive the pool up to $150,000, TAB still withdraws as much as they would with the original takeout rate and each winning punter also takes home more.

In contrast, fixed odds from bookmakers are designed with the bookmakers’ profit already built in, so they withdraw a profit on every rate regardless of what is won. Fixed odds don’t change, which can be appealing to a lot of punters.

It is believed that takeout rates will remain the same for now, but the strategies to draw in more punters remain unknown.

“We're changing more than the tote,” said McLachlan. “The whole way we present racing for punters will change."

As the racing industry acknowledges our need to diversify our revenue streams, the National Tote’s introduction is one to carefully watch.