TAB is looking to make pool betting sexy again with the launch of One Pool, which merges Australia’s three tote pools into one from Friday.
Parimutuel betting across the three totes has been in long-term decline as fixed odds betting has grown and competition for the punting dollar has intensified.
One Pool gives TAB deeper liquidity, but merging three declining pools won’t on its own reverse that decline. Many punters remain sceptical that TAB can revitalise the tote, and the proof will be in what unfolds over the next six to 12 months.
For punters, the merger happens behind the scenes. What they will notice is more stable prices, particularly in smaller midweek pools, along with bigger jackpots and a month of promotions headlined by a Quaddie MegaPot.
Tabcorp Chief Wagering Officer Michael Fitzsimons describes Friday as only “base camp”. In a wide-ranging interview with Betsy, he discussed:
- What punters get from day one
- The negotiations with Racing NSW and the other racing bodies
- Extra generosity on World Pool favourites to offset the higher takeout rate
- Variable takeout rates within three to nine months
- A wholesale tote for rival bookmakers
- How TAB plans to win back 18 to 34-year-olds
What punters get from day one
TAB is “throwing the kitchen sink” at the launch.
“Fundamentally we’re having a backend merger, commingling three pools, but for the customer that doesn’t really matter,” Fitzsimons said. “What matters to them is what they’re going to see, what they’re going to feel, what they’re going to experience.”
The biggest early impact will be away from the major racedays.
“Where it’s gonna have its big impact is the smaller midweek pools where there’s only several hundred dollars in it. Putting them together will give more stable pricing, more confidence to customers.”
Jackpots are central to the push, with the Quaddie MegaPot and Trifecta Reload paying bonuses to punters with winning selections. The merged pool will also allow “more frequent, larger jackpots”. Down the track, TAB wants an operator reserve similar to Hong Kong’s to build “super, super large jackpots” for major occasions, though that needs technology and regulatory work first.
“For the recreational customer, there will be a lot of sugar put around the experience in the first month.”
Sky has been revamped to better show market movements, with QR codes on screen linking to tips. For bigger punters, deeper pools mean they “can get on in bigger size in a way they can’t get on with the fixed odds bookmakers who restrict them”.
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Getting everyone to the table
A national tote has been talked about for years. TAB had to reach agreement with every principal racing authority in the country, with Racing NSW the final piece of the puzzle. Fitzsimons credited Tabcorp chief executive Gillon McLachlan with getting it over the line.
“Getting this together into one place is really only something Gil could have delivered.”
Fitzsimons was light-hearted about the negotiations with outgoing Racing NSW chief executive Peter V’landys, known as one of the toughest negotiators in the sport. “There were times it was a bit like Luke Skywalker and Darth Vader going at it,” he joked.
He said the process was cooperative throughout, and that both sides wanted the same outcome.
“We all want to get to the same place. People have to look after their own little corner. We always got that.”
Looking ahead, he said TAB was keen to continue the relationship under incoming chief executive Graham Hinton. “Graham and his team were great. We are looking forward to working with them for a long time.”
Sweetening World Pool favourites
World Pool combines Australian and international liquidity on major races but comes with a higher takeout rate than local pools. That has drawn criticism from punters this spring, with several short-priced favourites returning tote dividends well below their fixed odds price.
From the launch of One Pool, TAB will add extra generosity on World Pool favourites to offset that gap.
“What we’re doing for World Pool, starting from the launch of One Pool, we’re gonna do a super amount of generosity on the favourite, really just to make up that difference so nobody feels disadvantaged,” Fitzsimons said. “That’s how we’re gonna handle it this year.”
With so much liquidity going into some of these short-priced favourites, there are opportunities elsewhere. Fitzsimons used Hong Kong superstar Ka Ying Rising to explain the trade-off.
“When we talk about the problems with World Pool, yes, Ka Ying Rising is quite short on the tote, but it actually means that every other horse is way bigger.”
“If you want to back Ka Ying Rising, you should probably do it with us on the fixed. If you want to back any other horse, you wanna do it on the tote.”
TAB is also working with the Hong Kong Jockey Club on a permanent fix. “There are ways around it, things like net pool pricing, where we can show a different takeout rate in different countries.”
Rethinking takeout
A dog race carrying the same takeout rate as the Melbourne Cup is, in Fitzsimons’ words, “nonsensical”.
TAB wants to move to variable takeout rates based on factors such as field size and the price of the favourite.
“If you’re a $1.50 favourite, takeout rate arguably should be different if the favourite’s $3.”
“We will absolutely be optimising this over the course of the next three, six, nine months.”
Base camp
The risk is that One Pool becomes one bigger pool that keeps shrinking.
“We’ve got ourselves to base camp,” Fitzsimons said. “We’re going to launch with a lot of fanfare, with a lot of promotion, but really it’s just base camp.”
Next come extra places and new pool products, including AFL and NRL.
Large syndicates are expected to slow their turnover for the first couple of weeks while they recalibrate their models. TAB expects that money to return, but will manage how syndicates bet so late price moves don’t hurt recreational punters.
Winning back the next generation
The bigger challenge is convincing 18 to 34-year-olds raised on fixed odds that pool betting has something to offer.
TAB’s research found younger customers understood “pool betting” but not “tote betting”. An education program, backed by podcasts and TV shows, will explain each bet type.
Fitzsimons also points to prediction markets, share-trading apps such as Robinhood and the global boom in same-game multis, which he sees as the sports equivalent of tote exotics.
“That’s what the future tote product will look like.”
“How do we package them differently? How do we give customers control in a way they’ve never had before?”
Building a bigger pool
Rival bookmakers have already responded with tote-based offers of their own, including best-of-tote and starting price products.
TAB wants to bring that money into the pool rather than compete with it, with rival bookmakers betting into One Pool under a wholesale model. At this stage, though, that seems a way off.
“We think that a strong tote is good for racing, is good for everyone,” Fitzsimmons said.
“Liquidity begets liquidity, so the more that pours in, the better it gets.”
Data through the first few months will shape that offer.
Once TAB understands how the merged pool behaves, he said, it will be “in a very strong position to make a sensible commercial offer to them (other bookies).
Beyond that, the ambition is global, built on partnerships from Europe to the United States and Asia.
“The world bets into the Everest. But there’s no reason why the world shouldn’t be betting into every race every day.”
First, though, One Pool has to prove itself at home, and the sceptics will be watching closely.
Still waiting on Cup emergencies
One thing One Pool won’t deliver this year is emergencies in the Melbourne Cup.
“That’s a tech issue that I hoped would be solved this year. We haven’t quite pulled it off.”
Fitzsimons said it remained “top of the list of things we need to solve for”.
“We’ve probably been saying this for 20 years,” he said. “Next year.”
