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Tabcorp ignores retailers, encourages online purchase

Mark Fletcher
November 24th, 2020 · 7 Comments

At the website for TheLott, Tabcorp aggressively pitches online purchase and faintly offers help in finding a retail outlet. This screen shows their focus on online and their disregard for retail.

Add two this their relentless promotion on social media through paid advertising.

Then, there is their App promotion, encouraging people to purchase before November 24 for a gift of $5 for more spending. They say it can be used in-store, but the core focus is online spending.

I have heard from several newsagents over the weekend that they are angry by the actions fo tab copy promoting online. My, somewhat unfair, response is so? I have been saying for years online is their focus and that there is no upside for over the counter lottery product purchases.

Tabcorp has a responsibility that trumps all others and that is to its shareholders. Online serves that focus more so than in-store retail.

Years ago, before online, lotteries were rivers of gold for retailers. No more.

If you are a lottery retailer and update about their focus online, either get out of lotteries, or make your business less reliant on lottery revenue. But, for sure, stop complaining as it will achieve nothing and that Tabcorp is doing is nothing new.

That said, their behaviour toward retail compared to online is contrary to undertakings they have provided regarding promoting in-store purchase.

12 likes

Category: Ethics · Lotteries · Social responsibility

7 responses so far ↓

  • 1 Peter // Nov 24, 2020 at 8:52 PM

    At one stage I was trained by Lotto (along with the rest of NSW) to say can we have a Mobile Number with that so we can inform you of your winnings and the latest and greatest to come. I told the rep it reminded me of the Line from Ronny Macdonald “do you want fries with that”. It was obviously not accepted by Government when they ticked off changes by Lotto. The provision is still there on the lotto machines but not pushed. Sometimes Tabcorp can be brought to heel by Politicians so aggression can very occasionally be blunted.

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  • 2 Graeme Day // Nov 24, 2020 at 9:22 PM

    Currently the NSW Government is engaging MacQuarie Bank into conducting a study separating the Revenue Streams from lottery earnings to that of general gaming. Tabcorp. Basically has earnings from the the franchise of State Lotteries and its soveriegnty and from the income from Tab outlets Pub and other realated gaming increasing with youth on line especially impulse using iphones.
    There is great opportunity here to claim the essence of Lotteries is communal and founded with the outlets engaging newsagents for this very reason.
    The other gaming is outside of what the Government leased out into what has transpired.
    A properly prepared document to NSW Govt. may well illustrate the difference in the Goodwill and therefore the future direction these two very different types of Gambling may end up.
    i urge every newsagent to look at the proposal -just google it for reference anyway- and then if you agree contact your local member.
    The future is in your hands. Maybe your Association has already taken this point and is acting on it. It’s up to you to follow it through as Mark points out Tabcorp is not interested in our section alone it is the online overall that counts.

    2 likes

  • 3 Jonathan Wilson // Nov 25, 2020 at 11:28 PM

    The fact is, online is more profitable for Tabcorp so they will always favor online over retail.

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  • 4 Mark Fletcher // Nov 26, 2020 at 7:09 AM

    I don’t see any connection between the state government’s consideration of selling a future revenue stream from Tabcorp and the retailing of lottery products.

    I don’t see how it impacts retailers.

    Investment analysts have said as much in briefing material circulated over the last 2 days.

    In terms of lotteries, the main focus has to be on Tabcorp use of retail to encourage online shopping and thereby migrate retail commission online.

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  • 5 Graeme Day // Nov 26, 2020 at 7:39 AM

    The mere fact that the State Government is looking at the revenue streams as being different in nature and purpose through its process may give us the opportunity to discuss a wider brief. Other than that you are right.
    As for the on line versus retail debacle ongoing saga it’s fair to say tha on line ans reatil B&M are by design in competition with each other.
    The variances of the competition vary from who owns the product (news Corp and newspaper deliveries is a classic example, yet it is hurting them as the advertising revenue dropped considerably in print media) There are many varities and examples as I am sure you are aware and as you say -one should not be dependent on such a product- or upon any product or service as it all evolves.
    The best outcome is to use what we have for the time of it;s ue and at the same keep developing our future aroung the changes within our (local) society. Something you mention often.
    There is little to bless and a lot to blame and this holds us back from moving on as we should.

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  • 6 Amanda // Dec 1, 2020 at 9:50 PM

    I think associations need to demand more from Tabcorp, or alternatively the state governments should open up negotiations to the Marketing groups.

    There is a great divide between the fitout costs of Level 1 stores and those underneath. The divide between the costs of rental space occupied by Tabcorp in a Westfield in comparison to a strip store is also significant.

    Some things which should be discussed could include:
    * sub-leasing of Lotteries retail space back to Tabcorp.
    * tiered commission structure based on ranking…Top 33% stores get X commission, next 33% stores get Y commission, final 33% get z commission.
    * set $ figure for change of ownership and new outlet fees rather than a flat 1% of commissions.

    Currently the top selling outlets, rather than being rewarded are generally penalised the most with higher rental for space taken by Tabcorp fitout and a higher cost of fitout when installed. Those outlets are also heavily penalised in ownership changes and new outlet charges in comparison to smaller outlets.

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  • 7 Graeme Day // Dec 2, 2020 at 1:35 PM

    I believe the transfer fees for new owners were a lot more under the NSW Lottery Government owenrship than the 1% of commissions. I see no differential charges between ant Franchisee as the same percentage appiles to all.
    this means ranking as well for the more sales you achieve the more you make and same in reverse.
    This is what percentage based operations are all about.
    We should take note of this with real product such as magazines 25% of cover price no extra for more sales same with the 12.5% for retail only newsagents.
    The main problem with the physical product is space and handling costs-returns etc. It’s not relevant to retail today with rents as they are.
    Not sticking up for Tabcorp however it is bringing a better return than some of our namesake products are.
    When you have many lottery agencies earning three times their rent or occupancy cost per annum
    plus pays for wages as well in some it makes a hard argument for wanting more.
    The biggest problem is their online competition with our outlets. It’s cannibalism pure and simple especially when their own charges are less than ours and they advertise this.
    As for the State Govt. I would agree that they should, they may but chose not to. They do give a fit out allowance of $10k for new fit outs and that’s about it.

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