Tote Betting in South Africa 16 March 2006

1
Tote Betting in South Africa 16 March 2006
2
CONTENTS

• South African Horseracing
• Direct Costs of the Show
• How Betting Funds Horseracing
• The Betting Channels
• The Products
• Key Tote Betting Issues

3
SOUTH AFRICAN HORSERACING

• 1797 first race meeting
• 1998 legal competition (Lottery March 2001)
• Restructuring
• Infrastructure
• Employment
• Exports
• Transformation

4
DIRECT COSTS OF THE SHOW

• Stakes R220 million
• Staging of the races R190 million
• The NHA R40 million
• TOTAL R450 million
• Excludes marketing, corporate, betting and
  capital costs
• Est cost to owners of horses in training R315
  million
• Owners share of stakes (83) R182 million
• Gap still R133 million if based on 100 recovery
  of training fees
• The above excludes the capital cost of the horse

5
HOW BETTING FUNDS HORSERACING

• For every R1000 T/O the Tote delivers R120
  directly to fund Racing.
• For every R1000 T/O Fixed odds betting delivers
  R18 to fund racing (via 3 of winning bets).
• For every R1000 T/O Exchanges will deliver R1.05
  to fund racing (via 3 on 3.5 average
  commission).
• For every Rand taken by a fixed odds bookmaker on
  the open bet racing loses 85 of its funding.
• For every Rand taken on a betting exchange (if
  legal) racing would lose 99 of its funding.

6
BETTING CHANNELS (R1.9 Billion)

• Branches
• Agencies
• On course
• Internet
• GPRS Betting
• Telebetting
• IVR

80 T/O
20 T/O
7
THE PRODUCTS

• SA Racing 363 days a year
• Monthly major race days
• International product commingling
• Sports betting
• Harness Racing
• Dog Racing
• All supported by Tellytrack/ Newsprint / Radio /
  Virtual

8
KEY TOTE BETTING ISSUES

• Customer Service
• Retail infrastructure
• Supply of Information
• Extended betting hours
• Business Continuity (Eskom Telkom)
• Limited Payout Machines
• The Open Bet
• Betting exchanges

9
SUMMARY

• Putting on the show costs some R450 million.
• The stakes are well short of funding ownership
  expenses.
• Over 90 of current funding dependent on Tote
  betting.
• We are investing heavily in the Tote betting
  channels.
• We are busy sourcing more product to bet on and
  improving our customer service and supply of
  information.
• The open bet and betting exchanges are threats.