Wednesday, 2 June 2010

Charging towards turnover

I see that owners and breeders in Victoria, Australia are the latest group in racing to come out against a gross profits tax and advocate a turnover charge.

I find it bewildering, to be honest. It's like voting for an ancient by-gone age in the naive belief that you can go back to a world that was, instead of dealing with the world that is.

How does anyone believe that the solution to a funding crisis is to stifle innovation and competition? I could see it if racing were the only game in town, but it isn't: it has to compete with lots of other gambling product.

Voting for turnover on the basis that it brings a short-term boom, without recognising that it encourages people to bet offshore, that it keeps domestic prices high, that it makes it impossible to compete on price and that it therefore makes it less likely that new market entrants will keep up with consumer tastes is a very short-term approach.

It's like being a recording artist and insisting that you want to keep selling vinyls, on the grounds that vinyls sell for a higher price and all your longest-standing fans still have turntables. Your old fans keep buying your songs, and you might well sell them records at higher prices for a bit. But by the time you turn to the people who are using MP3 players, you realise that the people who might have become your fan-base are listening to someone else.

Still, I guess by then, both you and your old fan-base are dead.

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