Innovation is the key to tote revival

Merging the three Australian tote pools might sound bold, but without real innovation, it’s just rearranging deck chairs on the Titanic.

Over the last two decades, tote liquidity has collapsed. Once the king of the hill, the TAB has seen its market share slide, the tote playing a major role in that decline, now representing around 15% of all turnover.

The next generation of punters hasn’t abandoned racing – they’ve just followed the perceived value. Fixed odds and exchanges give them clarity, control and, crucially, trust. They’ve also been lured by incentives such as bonus bets and odds boosts, which should serve as a learning to TAB as it tries to reinvent the tote.

And let’s be honest: tote betting is a tough sell. What casual punter in 2025 willingly trades a fixed dividend $3.20 for the mystery box that might pay $2.60? You need nostalgia or masochism to choose the latter.

Yes, there’s still a niche for the syndicates and big teams who like the lack of bet limits, but even that’s eroding, with many leaving the Australian market. Today’s pools are so shallow that a single decent bet sends dividends into freefall.

Tabcorp boss Gil McLachlan is right to talk up a national tote. A vibrant tote isn’t just good for Tabcorp – it’s in the interests of the Principal Racing Authorities too. It strengthens racing’s funding model and can help slow the relentless rise of fixed-odds market percentages.

Former Racing Queensland CEO Jason Scott backs the move too. But here’s the catch: merging three anaemic pools won’t magically make them healthy. Sure, there may be a sugar hit with punters temporarily interested in the increased liquidity, but meaningful improvement in the offering to customers is vital.

Without new products, better value and aggressive marketing, the national tote will die just as fast as the state ones.

Look at Hong Kong and Japan – the last true tote strongholds. They thrive because they’re monopolies. Punters there have no legal alternative. In Hong Kong alone, illegal offshore turnover is estimated at HK$350 billion (that’s $68 billion Aussie dollars). Japan is experiencing similar trends. That’s how hungry punters are for alternatives.

Australia doesn’t have the monopoly advantage. The tote here has to earn its customers. That means changing the game.

Start by making it exciting again. The bones are already there – quaddies, trifectas, first fours, quinellas – all capable of becoming the racing version of a same-game multi. Package them, market them, and pitch them to the TikTok generation who love a low-outlay, high-upside bet.

Introduce jackpots that create buzz – daily, weekly, carnival-based. Give punters a reason to log in every Saturday.

And value matters. Either everyone gets rebates, or no one does. Drop take-out rates and make the product genuinely appealing. The idea that racing betting is inelastic is exactly that – a myth.

Punters aren’t engaging en masse with the tote at a 115% take-out on win bets. But if that rate dropped to 108%, would the trade-off against fixed-odds markets running at 130% suddenly make sense? It’s certainly a more compelling case to take to the market.

When value improves, turnover rises. It’s not rocket science – it’s price elasticity 101.

Scott went a step further, suggesting a newly formed Australian tote could take on the world. He’s right.

If Tabcorp has the stomach to drop take-out rates, why would global punters choose to bet into 17.5% take-out in the World Pool when an Australian tote could offer less than 14%? That single move would instantly make Australia the value destination for world racing bets. A global play, not a parochial patch-up. Suddenly, this isn’t just about saving the tote – it’s about exporting it.

Then there’s marketing. Two decades ago, Tabcorp didn’t need to advertise – it was the market. But Sportsbet, Ladbrokes and the rest didn’t steal the audience by accident. They built killer apps, shouted from rooftops, sponsored everything that moved and turned betting into entertainment.

The tote needs that same swagger. Market it to 18 to 34 year olds. Get influencers talking about it. Make it fun, not formal.

And while we’re at it, give us an app that doesn’t feel like dial-up internet. Sportsbet’s app didn’t conquer the market by luck – it conquered it by being slick, fast and punter-friendly.

The tote was once the heartbeat of Australian racing. Now it’s barely a pulse.

If Tabcorp doesn’t innovate – aggressively, creatively, shamelessly – it won’t matter how big the new pool is, it’ll still be empty.