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Urgent proposal to Tabcorp

Mark Fletcher
March 20th, 2020 · 12 Comments

Here is a proposal I put to Tabcorp early this morning following Powerball jack potting to $80M last night:

I write on behalf of newsXpress members as well as the 1,700 newsagent retailers using the Tower Systems POS software.

We are concerned that the $80M Powerball jackpot will prove to be challenging for retailers impacted by restrictions such as no gatherings of more than 100 people, nursing home access in or out, offices emptying as people work from home and entertainment precincts that are shut down. We also expect sales will be a challenge in shopping centres where traffic is down significantly.

We propose urgent, and by urgent we mean today, consideration of:

  1. Relaxing your rules and allowing retailers to pre-print tickets so they can be taken and sold offsite, such as in a nursing home or at the front of the shop to people who do not want to enter the shop. This relaxation of rules could be limited to 7 days to mitigate any concerns within the company about abuse.
  2. Releasing to Tower Systems and any other channel connected software company your API along with approval to develop an online sales ability for local stores to sell lottery tickets to regular / local shoppers. We anticipate that Tabcorp has an API for securely accessing the vending of tickets.

While this may challenge your OzLotteries relationship, as a shareholder inn that company I expect Tabcorp could prevail.

Should you release the API and permit existing Tabcorp franchisees to sell online, we would fast track this development for retailers for any individual store website. We would also look at a group wide solution for newsXpress members and urgently work on it if it possible.

I am concerned that in locations where traffic is down because of COVID-19, regular shoppers in those stores will try your website or app, establishing the risk of migration of that shopper from in-store to online.

5 likes

Category: Lotteries

12 responses so far ↓

  • 1 Peter // Mar 20, 2020 at 5:46 PM

    As a supporter of small business I agree with the sentiment of what you’re saying, particularly at this time of crisis. Unfortunately this represents an opportunity for big business to migrate more people online and cut out the middle man. Banks will be looking to do a similar thing in convincing the remaining few that use branches to take up internet banking, so that they can accelerate the closure of more branches. I personally don’t like it, as money needs to be circulated far and wide for a healthy economy and society, but it will happen.

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  • 2 Graeme Day // Mar 20, 2020 at 6:28 PM

    It’s not going to happen. If one looks at the bigger picture it is not feasible and it’s not for all franchisees and therefore not acceptable under the Code.
    the part Peter also mentions re on line “snitching” is as he says probably unavoidable but by open it up by introducing the very thing we don’t want and that is on line competition Omni yes competition no.

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  • 3 Mark Rirchardson // Mar 20, 2020 at 9:14 PM

    So am I reading this correctly Mark is proposing that Tower develop a software package for all Tower users to sell lotteries tickets ?

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  • 4 Mark Fletcher // Mar 21, 2020 at 6:12 AM

    Mark, you have not read it correctly. My pitch to Tabcorp is for all relevant software companies to have access to the API so they can create the solution for their customers.

    In my own case, my commitment is that it would be released without cost.

    While, Graeme, there may be code challenges, these are unique times. My proposal would provide 2,000+ lottery retailers a possible valuable stream they may miss otherwise. The question is, can the channel be unified enough to want that?

    An alternative response Graeme and mark could have been: good luck, it is good to see something being tried to help small business retailers.

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  • 5 Colin // Mar 21, 2020 at 9:15 AM

    Many will see this as making gambling easier. I don’t see it as getting widespread support nor do I see Tabcorp having positive long term view on the proposal.

    It will not help where footfall is the issue.

    The pubs are effectively being shut down so there may be an upside there for some retailers.

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  • 6 Graeme Day // Mar 21, 2020 at 12:38 PM

    Mark,
    The most positive thing that could happen to B&M Retailers is that the State Govts. supsend all GST from now UFN. This would help with the substantial paperwork, the Govt could put off workers on full pay to mind their childred when the enevitable School Lock takes place as well as that it would be fair for every one over 40% of the population is over 65 and therefore pensiners and Self Fundeds can share the consumption advantage and it is what Govts want and so do we is more retail consumption. I was not knocking you for trying I believe other solutions are more equitable for all Australian consumers and these will help more.
    The other is to go to Landlords for a 10% on product sales effective immediately.
    Tht’s my positive contribution ..let’s discuss the benefits for all.

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  • 7 Mark Fletcher // Mar 21, 2020 at 1:22 PM

    For the record, I doubt Tabcorp will agree to the proposal. That said, the proposal is sole about allowing indie retailers to continue what they do today. Not to expand it. But to continue and thereby slow the migration to Tabcorp’s own online business.

    This post is solely about and not other COVID-19 measures.

    1 likes

  • 8 Steve // Mar 21, 2020 at 3:13 PM

    Yes an interesting proposal Mark. I agree we should be pushing for a greater share of Tabcorp’s online revenue growth though I argue that they need a better appreciation of the role we could play in this growth. Must say their lack of a response todate to the current Coronavirus crisis is very noticeable and doesn’t provide me with much comfort. A remuneration model based on compliance rather than growth is also somewhat draconian and clearly doesn’t foster a strong and trusting working relationship.

    Ps Why are site visits still occurring whilst other corporates are cancelling all face to face meetings and rep visits?

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  • 9 Mark Fletcher // Mar 21, 2020 at 3:29 PM

    Steve – two separate issues. My proposal is about urgently addressing the $80M in the unique COVID-19 related situation, which, of course, they will not do.

    If terms of the other issue – a share of online growth more broadly, to play an uncomfortable devil’s advocate: why should they? They owe their retailers nothing. They have a legal obligation to share price. Their share price benefits from online.

    I agree that their remuneration model is wrong. No about of lobbying, negotiating or yelling has brought about change because from the governments they are not under pressure to address this.

    On store visits by any sales rep or supplier rep – yes, they should have stopped 2 weeks ago.

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  • 10 Steve // Mar 21, 2020 at 4:52 PM

    Mark to answer the devil’s question Omni channel growth will not be driven by franchisees whilst remuneration for Omni channel sales are lower than for in store sales. The ability for a franchisee to sell lotteries online is worth thinking about for both franchisee and franchisor but the remuneration will need to at least match that of an in store sale. This appears to be what you are proposing at least for next week’s Powerball.

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  • 11 PJ // Mar 21, 2020 at 5:02 PM

    If Tabcorp were smart they’d increase, temporarily, the online revenue share to agents. Any loss of revenue to them in the short term will be easily made up in the future from regular in store customers converted to online sales in the future. Also it’s great PR for them.

    They can’t allow other uncontrolled websites to have access to selling tickets online. That’s a major risk of violating responsible play and incorrect promotion. Also every agent involved would need their lottery insurance altered to take online and away from counter sales into account. I doubt there is external APIs and like the terminals, Ozlotteries is part of the same virtual network and acceses the system directly.

    Doesn’t matter anyway that sort of project even if it didn’t need regulatory approval would take more time then hopefully these circumstances last and would be temporary.

    Best could hope for is to be allowed to embed The Lott website on an agents website or create an affiliate program just for agents and get the standard commission on referred sales.

    Printing and selling tickets away from the counter may be possible if it’s just a Lott restriction but I’d say it’s a regulatory thing and would take time to get approval.

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  • 12 Mark Fletcher // Mar 22, 2020 at 8:53 AM

    To be clear, my pitch to Tabcorp is focussed on supporting existing Tabcorp retail franchisees only.

    0 likes

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