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Project ­Alfred

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    Posted: 27 May 2017 at 9:46am
Project ­Alfred

Gaming giant Tabcorp would charge weekend punters more under a ­secret plan to introduce Uber-style surge pricing.

It has also considered extending the plan, known as “Project ­Alfred” to Melbourne’s Spring Racing Carnival, The Australian has learned.

The existence of Project Alfred, which Tabcorp shopped to Victorian racing authorities in 2015, has emerged in Competition Tribunal hearings where the company is asking for approval to go ahead with an $11 billion merger with rival Tatts.

Yesterday, counsel for the Australian Competition & Consumer Commission, Andrew McClelland QC, told the tribunal he had received documents dealing with Project Alfred and a software package called Longitude that “cast doubt on a lot of evidence” given by Tabcorp’s witnesses.

“This has just been disclosed to us and has caused us some concern,” he said.

He said Tabcorp’s witnesses, which have included chief executive David Attenborough and commercial development boss Doug Freeman, might need to be recalled to deal with the new information.

And he also said the ACCC wanted all documents related to Project Alfred produced to the tribunal. Tabcorp makes its money by taking a cut of the total amount bet on each race or type of bet.

Under Project Alfred, it proposed reducing this take-out on weekdays and increasing it on Fridays and over the weekend.

Tabcorp research is believed to show punters betting on the weekend and during the Spring Racing Carnival were least sensitive to changes in the size of the tote pool.

It is estimated Project Alfred could reap between $2 million and $3m a year in extra profits for Tabcorp, although the company said it planned to plough benefits back into promoting the tote.

Mr McClelland told the tribunal the new documents showed Tabcorp hired an accountancy firm to examine the “inelasticities of demand” in regard to tote pools.

“They also disclose some plans to increase the take-out rate above the maximum statutory rates in some jurisdictions,” he said.

It is believed this refers to a proposal that Tabcorp would lobby government for an increase in some take-out rates, which vary depending on bet type.

On Friday, Mr Freeman told the tribunal Tabcorp’s “strategy was we would increase the take-out rates on certain days, decrease them on other days”.

“There was likely to be a net difference which we then intended to use that extra revenue to promote more, just like the corporates do,” he said.

“We presented it to Victorian Racing, we have explained it to our key stakeholder, and they are a total supporter of it.”

Yesterday, Mr McClelland told the tribunal the new documents also showed that Tabcorp sometimes referred to the take-out rate as the price of its services.

Mr Attenborough denied the take-out rate was the price when giving evidence to the tribunal last week.

Neil Young QC, representing the James Packer-backed corporate bookmaker CrownBet, said he also wanted to see documents relating to Longitude.

Longitude is software designed to allow better management of tote pools, including by combining small pools into larger ones to improve liquidity.

Mr Young contrasted the new information with Tabcorp’s previous statements that a merger with Tatts would benefit racing by allowing bigger tote pools.

“Again this is a matter not consistent with earlier evidence,” Mr Young said.

Longitude “will have consequences for eliminating any need to make changes to any pooling arrangements”, he said.

The ACCC’s interventionist stance yesterday ruffled Tatts’ feathers, with counsel for the gaming company, Rod Smith SC, questioning the regulator’s impartiality.

Mr Smith objected to questions Mr McClelland asked Sportsbet chief executive Cormac Barry, who was giving evidence yesterday. “This is the so-called impartial ACCC trying to get evidence which has got nothing to do with what I asked this witness about,” Mr Smith said.

Justice John Middleton, who is hearing the case along with lay members Grant Latta and Darryn Abraham, allowed the question.


reductio ad absurdum

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