Here's why Tote Tasmania only made 1.7 million on a billion $ turnover, now kicked out of supertab, and joined forces with Tatts Tote (QLD TAB) and i quote...``They (Tote Tasmania) rebated the backside out of the business until there was nothing left,'' he said.
Tote accused of giving away profits BY AARON LAKIN 19 Feb, 2012 03:00 AM
THE state opposition wants claims a massive betting syndicate systematically milked taxpayer-owned betting agency Tote Tasmania of tens of millions of dollars, effectively leaving it unprofitable, investigated by a parliamentary committee.
An Australian Financial Review article claimed the syndicate, run by Hobart-born gambler Zeljko Ranogajec, convinced Tote to pay it rebates in return for its betting dollar.
It said these rebates allowed Mr Ranogajec's syndicate to run a system which saw it profit from Tote regardless of whether its bets won or lost.
Tote says the claims are wrong. It would not confirm or deny it had a rebate deal with Mr Ranogajec.
Quoting a source ``with intimate knowledge of the Tote Tasmania business'', the AFR report said Tote paid out an estimated $45 million in rebates in the 2011 financial year, ``most of that would have been to Zeljko (Ranogajec)''.
Tote returned a profit of just $1.7 million in the same year, despite a turnover of close to a billion dollars.
Dick McIlwain, chief executive of Tatts Group, which bought Tote from the government for $103 million in December, told the AFR the business had given its profits away.
``They (Tote Tasmania) rebated the backside out of the business until there was nothing left,'' he said.
Mr Coleman acknowledged rebates were paid to high-end punters but not at a loss.
``Any suggestion that our profit result in 2010-11 was a result of rebates and commissions paid to larger customers is simply incorrect . . . our 2010-11 profit reduced because of increased compliance costs . . . and costs associated with race field fees, core wagering system replacement and labour,'' Mr Coleman said.
``The unsuccessful sale process that concluded in December 2009, that saw a loss of key customers and personnel, also contributed to the fall in profit.''
According to its five-year summary, Tote's expenses increased by 20.7 per cent in 2011, from $82.6 million in 2010 to $99.7 million, while its income rose 3.5 per cent, from $98 million to $101.4 million.
At the same time its turnover increased by 27 per cent, from $745.8 million to $950.7 million, and profit dropped 88.9 per cent, from $15.3 million to $1.7 million. Mr Coleman said Tote continued to pay rebates this financial year.
Opposition Treasury spokesman Peter Gutwein said the public had a right to know if Tote was giving away millions in rebates.
``I am so concerned by comments from Tatts Group CEO Dick McIlwain that I have spoken to the chair of the committee investigating the sale of Tote Tasmania, urging him to call Mr McIlwain to appear before the committee,'' he said.
A spokesman for Racing Minister Bryan Green said the government was not aware of the rebate deals between Tote and high-end gamblers and would not be drawn on whether the minister supported them.
