Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

New lottery outlets impact the value of an existing businesses

Mark Fletcher
September 25th, 2018 · 5 Comments

Imagine the impact on your newsagency with lotteries if a new outlet opens a few minutes walk away.

Imagine you’ve worked hard for years to build up your business, traded through tough economic times and here you are experiencing nice growth and, finally, feeling that your head is above water.

And then you discover a new competitor, a business just like yours, with lotteries is to open and, for sure, take some of your customers.

In these weeks or months when you know a competitor is coming it can do  your head in as you worry abut revenue leaking from your business, growth you have achieved being wiped off. It can be distressing and can have you looking at the situation in an unhealthy way.

Once the competitor opens you have a new target, the new business. Even though they are new, and maybe new at business, it can play on your mind and have you acting irrationally.

I have never seen support from Tatts for this situation, where they have approved (encouraged?) a competitor to open close and take business from you.

This scenario of Tatts approving a new outlet close to a existing outlet is not new. It’s happened before. It’s happening now. It’s set to happen again.

I get that Tatts has the right to appoint new outlets and needs to do so as part of its business plan. However, from what I have seen, their process of deciding on new outlets, especially those close to existing outlets, is not transparent and can harm small family businesses.

There is no reasonable and independent path of review or appeal. Tatts is investigator, judge and jury. The small business negatively affected by a plan by Tatts to approve a competitor outlet is weak compared to Tatts in the process.

While I am no lawyer, from what I can tell it is a state or territory issue if a business owner wanted to agitate on this. Points of compliant and agitation could include tribunals such as QCAT, VCAT and the CTTT, small business ombundsmen, small business commissioners and, maybe but it is a long shot, state / territory gaming commissions.

I would like to see Tatts agree a code of conduct that offers structured measurable criteria for Tatts assessing and approving new outlets and that respect the position off any existing nearby outlet within a reasonable distance of any proposed new outlet. This process needs to respect existing small businesses ahead of any benefit perceived buy people at Tatts.

If I’m wrong in what I have written here, if Tatts does have processes I suggest they establish, please outline them in comments below.

Footnote: I don ‘t have lotteries in businesses I own for several reasons including this one. I don’t want a business that is easily impacted by decisions by a core supplier. A newsagency without lotteries can thrive.

19 likes

Category: Ethics · Lotteries · Social responsibility

5 responses so far ↓

  • 1 Colin // Sep 25, 2018 at 8:40 AM

    In SA this situation has been ongoing for years with OTR seemingly able to add lottery to any of their sites no matter how close an existing outlet. Where I live, there is an OTR with lottery within 50 metres of a newsagent.

    Not just Tatts have this issue. One of the largest card companies has no qualms about supplying any number of outlets no matter how close. Same with certain impulse girls trinket supplier.

    0 likes

  • 2 Steve // Sep 25, 2018 at 9:19 AM

    Lotterywest have been known to do the same thing, I even had a Customer Service Rep admit that they don’t consider existing outlets when someone applies for a new license.

    In one major shopping centre with 2 existing newsagent outlets Lotterywest approved a third kiosk. Within months one newsagent folded, the second folded a couple of years latter leaving the Kiosk as the only outlet.

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  • 3 Jim // Sep 25, 2018 at 1:13 PM

    Tatts can essentially do as they please according to their franchise agreement. They notify existing outlets in the same catchment of an application and give you 7 days to reply as to why it shldnt be granted addressing the criteria set out in the FA. Effectively you must prove there are no incremental sales to the network, which we all know is impossible. It’s a sham process that provides no considerstion of the fixed and variable costs associated with running the nearby outlet.

    4 likes

  • 4 Mark Fletcher // Sep 25, 2018 at 1:15 PM

    Steve, my understanding is that with the change of government and change of CEO Lotterywest was to alter its process. I’d be interested to know if that has not transpired.

    0 likes

  • 5 Steve // Sep 25, 2018 at 3:31 PM

    Mark, Your probably right. The instance I mention was a few years ago, but it was pointed out to me by a Lotterywest employee and as I visit the centre regular myself I have seen the consequences.

    Though I have to admit the Kiosk that survived is a lesson in getting the most out of a small footprint. Very efficient use of space.

    0 likes

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