KZN Bookmakers’ Society
On 3 March 2015 the “KwaZulu-Natal Bookmakers Society (KZNBS) and Others” lodged a 59 page official complaint with the Competition Commission about alleged prohibited conduct by the “Tellytrack Partnership and partners” including Phumelela, Gold Circle and Kenilworth Racing.
This is the latest installment in the long-running Tellytrack vs Bookmaker dispute. As it’s all getting a little complicated and difficult to follow, we outline a brief summary of the salient events below:-
On or about 1 August 2013, Tellytrack, our national horseracing channel, announced a license fee hike of 3%, to take effect on 1 October 2013. In order to afford Bookmakers sufficient time to consider their options, an extension of the pricing was granted until 31 January 2014.
Subsequent to the fee increase announcement, there was much negotiation, mainly centred around what might be considered an acceptable fee. The Bookies were of the opinion that the fee charged should be linked to reasonable costs as has been the arrangement since the early 90’s and in compliance with various gambling board license conditions. Phumelela wanted to levy a fee of 3% of turnover per Bookmaking ‘shop’, in line with what they claimed was the rate charged internationally by suppliers and receivers for televised horse racing content.
When agreement could not be reached, the Gauteng Off-Course Bookmakers’ Association (GOBA) laid complaints with the Gauteng Gambling Board (GGB), Eastern Cape Gambling and Betting Board as well as the National Gambling board at the end of January 2014. GOBA also lodged a complaint with the Competition Commission in March 2014. We understand that the Commission have confirmed that they are investigating the complaint.
Applications by the GOBA Bookmakers for interim relief, seeking the fees to be restored to the 2013 status quo, were denied on the basis of urgency on 16 May 2014 and bookmakers were left with the choice between making alternative arrangements or paying the increased fee.
Then on 9 October 2014, as a result of proceedings before it, the Gauteng Gambling Board issued an interim ruling requiring Phumelela to make the Tellytrack channel available to all bookmakers at the 2013 price plus an inflation adjustment. Phumelela publicly announced that they found the interim order to be “irregular” and subsequently instituted review proceedings in the High Court.
Subsequent to the GGB’s October order, members of the bookmakers societies, believing themselves to be in a credit situation (having paid the higher rates since May 2014), did not pay any further subscription fees.
On 20 Dec 2014, Phumelela issued a communication, announcing its intention to terminate its broadcast unless bookmakers paid the increased fee of R16,500 per month and the additional backlog. With it being 4 days before Christmas and with limited recourse to legal services, the bookmakers capitulated and paid the fees under duress, in order to allow the service to run over the holiday period.
When business resumed in January 2015, Phumelela then proposed an increased fee of R22,075 / month.
The KZN Bookmakers, seeing the timed targeted termination threat 4 days before Christmas and the further January 2015 hike as a clear indication that Phumelela had no intention of complying with the Gambling Board ruling of 9 October, launched an urgent application for interim relief, which was granted on 20 February 2015.
On 3 March 2015, they formally lodged a complaint with the Competition Commission.
Sean Coleman, who signed the official complaint on behalf of the KZN Bookmakers, explained “The 20 December disingenuous action to cut off the broadcast and place our members’ businesses under immediate threat, was the straw that broke the camel’s back. Given their attempts of what, in our view, is clear anti-competitive behaviour, we have lodged a complaint with the Competition Commission.”
Watch this space.
