The Commerce Commission has received an application from the New Zealand Racing Board (NZRB) seeking authorisation for parts of a proposed arrangement between the NZRB and Tabcorp Wagering Manager (Vic) Pty Ltd (Tabcorp).

The NZRB is a statutory body established under the Racing Act 2003. Its primary purpose is to promote the racing industry, facilitate and promote racing betting and sports betting and to maximise its profits for the long-term benefits of New Zealand racing.

Tabcorp is one of the three major wagering operators in Australia with a licence to operate totalisator pools. It offers totalisator and fixed odds betting on racing and sporting events.

Since 2007, the NZRB and Tabcorp have had arrangements that provide for the commingling of totalisator horse and greyhound racing betting pools. These arrangements allow customers to place bets on Australian (and other overseas) racing through the NZRB, and similarly to place bets on New Zealand racing through Tabcorp. Commingling means that the NZRB and Tabcorp combine their respective betting pools into a single larger pool into which customers of the two betting operators can wager.

The application relates to new arrangements that the NZRB and Tabcorp propose entering into replacing existing commingling arrangements. The NZRB is seeking authorisation for specific provisions of the new arrangements because, in contrast to existing commingling arrangements, the new arrangements are to include restrictions on participating in commingled pools. The restrictions under the proposed arrangements relate to the NZRB’s and Tabcorp’s take-out rates from the commingled pools and the rebates or commissions that the NZRB and Tabcorp may pay high volume customers.

Anyone who has an interest in this matter and who wants to make a submission can contact the Commission at registrar@comcom.govt.nz with the reference NZRB/Tabcorp in the subject line of the email.

A public version of the application will shortly be available on the Anti-competitive practices authorisations register.

Background

The Commission may grant authorisation under section 58 of the Commerce Act for certain agreements that may otherwise breach the Commerce Act if it is satisfied that the public benefits of the agreements outweigh the detriments arising from the loss of competition.

The granting of a restrictive trade practice authorisation protects the applicant from court action under the Commerce Act by the Commission and private individuals.

The Commission’s Authorisation Guidelines explain when anti-competitive agreements will be authorised and the process used to determine authorisation applications.

Tabcorp has, in Australia, sought and been granted authorisation from the Australian Competition and Consumer Commission (ACCC) to enter into international commingling arrangements with overseas wagering operators including the NZRB. A copy of the ACCC’s decision is available at: http://registers.accc.gov.au/content/index.phtml/itemId/1178280/fromItemId/401858/display/acccDecision. NZRB’s application to the Commerce Commission reflects the policy and commercial ramifications of Tabcorp’s ACCC authorisation.