Racing: Bonus bet botch-up comes at worst of times for TAB

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The TAB has commissioned an independent review into a mammoth miscounting of its bonus bets promotions which is set to significantly affect the racing industry's returns this year.

TAB staff and racing code bosses have been told of an error inside the new fixed odds betting platform (which runs the TAB betting website) which effectively meant bonus bets were being counted twice.

That has resulted in the TAB's income being overstated by $1.6 million in the year till July 31, 2019 as well as further double counting in the six months to February this year.

Bonus bets are given away by the TAB in promotions and/or to punters who lose other bets as a way of driving interest and stimulating turnover, and are a common practice with bookmakers worldwide.

The TAB admits that the numbers of bets and the amounts of money they were costing the TAB were checked incorrectly and this was discovered by the TAB's internal team as they completed the half-yearly report in late January.

Put simply, that means the bottom line for the expected profit for the first six months of the 2019-2020 season, which was thought to be tracking positively at around $700,000 ahead of budget, will actually be hugely behind the forecast budget.

And that is without factoring in last year's issues for the same reason.

TAB chairman Dean McKenzie told the Herald there is no hiding from the error but an independent review will be undertaken to discover exactly how it happened and who or what is at fault.

The unearthing of the mistake could hardly have come at a worse time for the TAB as the New Zealand racing industry faces huge losses of income because of Covid-19.

While New Zealand, and importantly Australian, racing continue for now many of the sports which also generate turnover for the TAB, much of which is paid back to New Zealand racing, have stopped.

Without turnover (betting) the TAB has nothing to sell and it is impossible for them to predict how long those sports will be suspended for. The codes were also briefed on potential numbers, as much as any could be accurately produced, on what the loss of profit will be should New Zealand, Australian or racing in both countries be halted.

The numbers are already not pretty for a struggling industry but if racing was to halt for any period of time extending to months, the racing industry will face the greatest crisis in its history.

The Herald understands the industry has yet to make a formal application to the Government for assistance but that would seem likely in the next 12 months otherwise thousands of jobs could be lost.

While many inside the racing industry understand the difficulties the TAB and therefore racing will face because of Covid-19, the glaring error in the bonus bets accounting will not be viewed sympathetically by some.

The new FOB platform, which started up last January, has already been widely criticised for a budget blowout and this latest error will have horse people, breeders and owners fuming.

As bad as it undoubtedly is, if racing here is halted by Covid-19, the bonus bets fiasco may pale by comparison.