Regional publicans concerned by loss of Tabcorp commission

Victoria’s country publicans are concerned they will be the hardest hit by changes to commission payments proposed by Tabcorp.

Publicans, including David Canny of Ballarat’s Red Lion Hotel, fear changes to payments from Tabcorp will be blow to their businesses.

Publicans across regional Victoria are terrified changes to payments from gambling giant Tabcorp will be a blow to their businesses amid rising costs.

Under a change to deals between the betting behemoth and pubs, those who do not pull in $10,000 a week will lose their commission until they reach that target.

The change is set to start in just a few weeks, on July 1.

Horsham’s Exchange Hotel publican Nick Murray said he would be out almost $15,000 — the equivalent of almost 520 chicken parmas — not by losing his commission but through the loss of management and deposit fees.

However, he said Tabcorp’s plan to drive business into pubs by helping spruce up outlets and spend millions on advertising was long overdue.

“I’d rather have the TAB than not and it’s an important part of my business factoring in my budget and the costings,” he said.

“With everything else rising it’s a bit of a blow to be losing that income.”

Horsham’s Exchange Hotel publican Nick Murray says the Tabcorp change will hit his bottom line. Picture: Abby Walter

Mr Murray said TAB services were about more than just placing bets.

“It’s a service I offer because it’s not hugely profitable for the venue but it creates activity and gets people inside,” he said.

“It might be that Joe who lives four doors down has a horse running in a race and the locals get together and watch, and there’s a lot of horse trainers in small towns.”

But other venues, Mr Murray said, would likely have to reconsider whether having the betting outlets was worth it.

“I think it’s obviously going to have a real impact on some venues,” he said.

“The devil’s going to be in the detail so there’s a little bit of unknown at the moment and that causes angst.”

Ballarat’s Red Lion Hotel publican David Canny said he was concerned about the effect the change could have on the viability of regional pubs.

“It’s a worry for us that a revenue stream, which may be only a break-even revenue stream that pays some of the cost of wages or electricity or whatever it is, might be taken away from these smaller venues,” he said.

“Our membership are looking to reduce costs. That’s the biggest thing we are trying to work on … the last thing we want to do is increase costs in some areas.”

Ballarat's Red Lion Hotel publican David Canny is concerned about the impact changes to payments made by Tabcorp will have on regional pubs. Picture: David Caird

Mr Canny, who also serves as president of Victorian branch of the Australian Hotels Association (AHA), said the industry needed more transparency about how Tabcorp’s new business model would look over the next two years.

“We’d like to see a model whereby the venue is rewarded by commission as they grow because it’s the venues providing the service, putting the show on and paying costs which are rapidly growing,” he said.

“We have an understanding of Tabcorp’s plight that they need to change their model, we’re just worried what the impact that’s going to have across regional pubs.”

It is understood Tabcorp and the AHA have met on multiple occasions since February to discuss the changes.

Despite the talks, AHA chief executive Stephen Ferguson said it looked bleak for some regional and rural pubs.

“We’re very worried about how many of those will be sustainable which then raises issues around not only a loss of revenue for the hotel sector but what’s the effect on the racing industry,” he said.

Mr Ferguson said while Tabcorp had pledged country pubs in towns with small populations would be exempt, the AHA and the pubs themselves were still waiting to be told who would benefit from the exemption.

Proposed layout of an upgraded Tabcorp pub venue. Picture: Tabcorp

“We don’t understand why Tabcorp is going hardest against those that can least afford it,” he said.

“They’re going to be massively increasing revenue and we say surely with a lift in revenue the pubs are entitled to some sort of commission or to retain the existing commissions.”

It is understood about 30 per cent of pubs with TAB facilities will have their commissions removed.

Tabcorp chief executive Gillon McLachlan said it would be the biggest upgrade to the business’ retail network in history.

“Importantly there will be no new fees or charges to fund the retail rejuvenation in FY26,” he said.

“We want to grow the retail network and work transparently with our partners to create alignment on a growth strategy that creates better commercial outcomes for venues.

“It couldn’t be more important to me to get this retail discussion right.

“I’m available to every single person who wants to call me or get in touch with me.

“We will be injecting unprecedented levels of promotions and new initiatives into our retail network over the next 12 months as we aim to revitalise our retail offering with a true omnichannel experience.”

Originally published as Regional publicans concerned by loss of Tabcorp commission