Control Data Australia Memories compiled by Brian Membrey


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1961 - 1974 : Infancy and Growth

Rather strangely, while the percentages deducted from the on- and off-course totalizators were the same at 12%, the dispersal of the “take” varied because of the different Acts under which they operated.

At the time of the legalization of the Victorian TAB, the prescribed on-course split was 7% to the racing club and 5% to the Government, the latter by statute going to the Hospital and Charities Fund.

With the new intermediary TAB in place, off-course percentages were 3% to the Government's Consolidated Fund, 1% to a TAB Trust Fund administered by State Treasury and 8% to the TAB “to be expended according to the terms of the Act” and which included an unknown percentage to the racing club whose meeting the tote operated on.

Given the instant success of the TAB, it was no great surprise when the Government increased its grab from the new windfall with a Racing (Totalizator Percentages) Act on April 1, 1963 that increased the take to 12.5% with the Consolidated Revenue (a.k.a “slush”) Fund share jumping to 4.25% and the Trust Fund slashed to .25% (the TAB continued to receive 8%).

The Victorian TAB first operated on Sydney and Adelaide races on 8 May, 1963.  There was no fanfare of trumpets, the only discernable differences were that Saturday's fields for the two venues were “Listed in TAB order” and results on the Monday showed both the local and the Victorian dividends.

July, 1968 saw another reduction in dividends to Joe Average punter, percentage on Win and Place increased to 13% with the  additional amount again to Consolidated Revenue, but in a deal seemingly brokered with the racing industry concerned at the deterioration of many country tracks. the percentage of the pool on doubles betting (other than trotting races) was increased to 14%, with the additional take diverted to a new Racecourse Development Fund, again administered by the State Treasury.

Maybe it was coincidence, maybe not, but around the same time as legislation allowed the introduction of Tattslotto, the percentages were again increased to 14% Win and Place and 15% Doubles (some guesswork suggests trotting doubles would have been brought into line); in both cases, Consolidated Revenue received ¾% and the Racecourse Development Fund an additional ¼ of a percent (it is believed that overall percentages still apply today, but the splits may have changed).

The table below (because Excel can do it) illustrates the growth of race betting for the twelve years following the introduction of the world's first off-course totalizator system.  (All figures from appropriate Victorian Year Books - “Total taxes” appear to include dividend fractions and unclaimed dividends, which based on 1952 figures represented 18% and 1.3% over and over the legislated deductions).



Year

On-Course

%

Off-course

%

Bookmakers

%

Turnover

%

Total

%


Tote '000

Growth

Tote '000

Growth

(estimated)

Growth

from racing

Growth

Taxes

Growth

1960

26396




143200


169596


5260


1961

27710

5.0%

2886


157170

9.8%

187766

10.7%

5682

8.0%

1962

27838

0.5%

26418


151648

-3.5%

205904

9.7%

6406

12.7%

1963

29122

4.6%

51136

93.6%

151082

0.4%

231340

12.4%

7470

16.6%

1964

31024

6.5%

78221

53.0%

154445

2.2%

263690

14.0%

9014

20.7%

1965

34019

9.7%

108939

39.3%

159723

3.4%

302681

14.8%

10608

17.7%

1966

34828

2.4%

129109

18.5%

160453

0.5%

324390

7.2%

12415

17.0%

1967

36627

5.2%

143984

11.5%

168381

4.9%

348992

7.6%

14337

15.5%

1968

37383

2.1%

162870

13.1%

172603

2.5%

372856

6.8%

15929

11.1%

1969

39085

4.6%

185869

14.1%

172388

0.1%

397342

6.6%

17373

9.1%

1970

43259

10.7%

202733

9.1%

183296

6.3%

429288

8.0%

19444

11.9%

1971

47776

10.4%

225863

11.4%

196166

7.0%

469805

9.4%

21222

9.1%

1972

57149

19.6%

271993

20.4%

217898

11.1%

547040

16.4%

25042

18.0%

1973

56633

0.9%

321192

18.1%

228758

5.0%

606583

10.9%

31913

27.4%

1974

62483

10.3%

362468

12.9%

263170

15.0%

688121

13.4%

37662

18.0%


% Growth






On-course


All




1963-72

96.2%


431.9%


44.2%

52.6%

136.5%


235.2%


1963-74

114.6%


608.8%


74.2%

80.7%

197.5%


404.2%


[Top}

Originally this table was constructed over six years to see how the TAB revenue grew; after noting the arrival of Tattslotto, the period was extended to include the earlier years of the latter to see whether it had a detrimental affect on the racing codes – in fact, the complete opposite seems to have been the case

Much of the off-course increase in 1973 came from the introduction of the Quadrella on July 1, 1972, the total “Quaddie” turnover in the first year contributing $36.65 million (although, in turn, it may have had an unknown detrimental effect on other bet types). The “take”on the Quadrella was also 1% higher than the other types, perhaps part of the reason for  the sharp leap in the total taxes in that year.

Yet this does not example large increases in on-course and bookmaker totals (although the former dropped sharply in 1973) - the early seventies were relatively prosperous times, the turnover of both tote systems and bookmakers went through the roof (it would be an interesting exercise to monitor the growth of the various Lotto options, but that's for Someone Else).

What do the figures tell us?

First of all, were the 'wowsers' right in suggesting that legalising an off-course totalizator would encourage more gambling of other forms?

A Definite Perhaps – the combined figures for the on-course mediums show an increase of 52% between 1963 and 1972 and 80% when the later two boom years are included.

Perhaps – the No vote says the 52% increase could easily be explained by the creeping effect of inflation - it equates to a rate of just on 4.5% but the Yes vote may include the last two years which boost the rate to 6%; not exactly “galloping” Inflation (no pun intended), but certainly a level that would leave most economists with a frown,

Did the off-course tote have a negative impact on bookmakers?

A Probable Yes - although the level wagered through bookmakers increased at inflation type levels, it was just on 50%  less than the corresponding increase in on-course totalizator figures.  This may well have been because occasional punters had become acquainted with totalizator betting via the TAB and preferred the machine on the occasions they ventured on-course.

Did the off-course tote increase overall gambling levels?

An Obvious Yes - the ten year increase equates to just under 12%  per annum and over the twelve years to 14.4%, both figures at least double the likely inflation rate.

Did Sir Henry Bolte back a winner with the TAB?

A Resounding Yes - overall Government revenue from racing (with included a non-wagering “Other” section which included bookmakers license fees, entertainment tax (which during the period was eliminated except for racecourse admission) and stamp duties of bookmakers betting tickets) jumped 20.5% and 29% respectively for the two years, a massive increase to state coffers.

Vulgar Fractions

We should add here that the overall revenue also included “fractions”.

This was, and still is, the icing on the cake for State governments everywhere.

Let’s assume of modest but convenient pool of $4,000 and a percentage take of 12%  ($480), leaving $3,520 available for distribution. The favourite gets up and 1,500 astute punters hold winning tickets. $3,520 divided by 1,500 gives us (in theory) a dividend of $2.346, or if rounding to the nearest cent, $2.35.

But that is just theory.  The actual dividend is always rounded down and thus becomes $2.30; no prizes for guessing where the 4.6 cent “fraction” or 46 bucks goes – straight into the Consolidated Revenue bucket!

In reality, the original $480 deduction is increased by $51.90, giving the Government a new total of $531.90 or an actual percentage of 13.3%.

Admittedly these figures have been manipulated somewhat to reflect a “worst case” scenario, but even as far back as the N.S.W. Royal Commission of 1912, submissions given by Queensland officials suggested that “fractions” over a long period of time in fact equated to an average 1% over the official rate.

“Winning” Bets

Fortunately the rules were changed, but it took a while to do so.

Under the original totalizator legislation (both in Victoria and interstate, it was possible for a punter to back a winner (or more commonly a place-getter) and lose money on the race!

This absurd situation arose when the total wagered on a horse exceeded the net pool available for distribution.  In the example above, if the total bet on a horse exceeded  $3,520, the punter lost!

If, for example, $3,600 of the $4,000 was wagered on one horse, the dividend became 48.88 cents (assuming the original base unit of 50 cents), after fractions 45 cents for your 50 cent outlay. And if perchance the horse dead-heated, the situation was compounded as the fraction applied to both dividends, the “hot pot” in this case theoretically returned 24.44 cents but rounded down became just 20 cents to the “lucky” punter!

One extreme case in New Zealand noted just before the on-course tote was introduced in Victoria saw a dividend for a 10/- “winning” bet paid out as 7/6d - just how the dividend was arrived at is not clear, but it was suggested that the winner was bracketed with another heavily fancied runner.

Common sense eventually prevailed and the rules changed to ensure that a punter could not lose on a successful wager and a minimum payout. It was subsequently modified to ensure a punter always received a return and a “special case” dividend of 51 cents (now $1.02 for a $1 unit) introduced.