Tabcorp has been approving plenty of tobacco businesses as lottery outlets, providing foundational financial support for these tobacco businesses in regional and rural Australia.
The health and social harm of cigarettes is well documented. yet, here is Tabcorp, helping to support the reach of cigarette retailers. This is not the behaviour I’d expect from a company that says it cares for the community.
Tabcorp has a proud history of supporting our industry partners and the communities in which we live, work and play.
We have established key partnerships with a range of charitable organisations such as the Starlight Children’s Foundation, Prostate Cancer Foundation Australia, OzHarvest and Conservation Volunteers Australia, and also industry-linked charities such as the National Jockeys Trust and the Melbourne Racing Club Foundation.We engage with them to provide financial contributions and share our resources, networks, skills, expertise and people, to help improve the communities around us.
For the 2020 financial year, Tabcorp’s support to charities and community organisations totalled approximately $12.6 million. This voluntary support was provided through direct donations, unclaimed prize money donations, in-kind giving and forgone revenue, management costs and employee time. For further details regarding some of our recent partnerships and sponsorships see below.
Looking at some of the approved businesses, their model is tobacco and lotteries, with tobacco products discounted, and lotteries providing the commercial support necessary for the business to be viable and to have the capacity to sell cheap cigarettes.
What a health story Tabcorp!
Even the company’s position on the environment is compromised by their apparent love of cigarette shops becoming lottery retailers.
Tabcorp is committed to minimising its environmental impact.
Tabcorp is committed to minimising its environmental impact and operating as efficiently as possible. Our main focus is on reducing the consumption of natural resources to further minimise our environmental footprint.Due to the nature of our businesses, Tabcorp has a low environmental risk profile and footprint. Tabcorp is a low energy and water consumer, and is a low carbon emitter. Tabcorp does not meet any of the Federal Government’s thresholds for mandatory environmental reporting.
Refer to Tabcorp’s Corporate Responsibility Reports for details about Tabcorp’s environmental management activities.
Tabcorp’s website also speaks to workplace health and safety:
Health, Safety and Wellbeing
Tabcorp focuses on providing a safe working environment and promoting health and wellbeing in the workplace.
We are committed to high standards of health, safety and wellbeing for all employees, contractors and visitors.Tabcorp supports a number of employee health, safety and wellbeing initiatives, including:
- Jobs at Home Day
- Safety Week
- RU OK Day
- Men’s Health Week
- International Women’s Day
- Harmony Day
Yet, by approving cigarette shops to become lottery retailers in particular it challenges the health and wellbeing of the community in which it serves.
I get that Tabcorp will say that it is responding to applicants, retailers seeking to offer lottery products in existing business. Maybe so, however, there are situations where such applications have been made where the existing lottery retailer has capacity to grow sales and desire to grow sales, and Tabcorp has objected to the new retailer being approved. In these situations, it appears Tabcorp is favouring the cigarette retailer.
If I was a Tabcorp shareholder, this would concern me.
If I was running a charity receiving funds from Tabcorp, I’d be concerned about their apparent support for expanding the reach of cigarette retail in Australia.
These are matters relating to social responsibility, in addition to the core issue of placing local small business retailers that already sell lottery products under undue pressure through approving new outlets without evidence and to need.
Well said Mark.
The process of approving these new tobacco outlets worries me. There is no transparency.
In my opinion, the process of considering new outlets should be transparent to the public with easy access to the lodgement of support or objection re any new location application. The current process is too much in the shadows and biased against existing lottery retailers.
An online portal listing all new location requests and providing easy upload of comment / feedback would facilitate transparency and, hopefully, fairness. It would also provide communities with greater information about proposed outlets – such as what approval may mean for the sale of tobacco, for instance, in their area.
The whole thing is as you say wrong in essence.
Smoking Kills-Gaming can also be considered by some as not good for families.
However Lotteries are an acceptable form given support and respectablity through Newsagency outlets since Pools in the early 70’s Some could say Tobacconists over the years, like newsagents sold lottery tickets through runners.
this argument against Tabcorp selling lotteries through tobacconists is well founded and one that the Governments of the day should look at.
Newsagents also need to look at tobacco sales as well.
I sold a newsagency for a lady (who was running it on her own) who had lost most of the family wealth and deparately needed the money. It is now a whatever branded tobacconist with the Lott. The second newsagency in a yet to grow chain. The first a few kilometres away was a newsagency about to close.
I can’t blame the newsagent for selling, I can’t blame a landlord for wanting to establish a Tobacconist with the Lott styled Kiosk as it is available.
This only leave Tabcorp as you say to take the moral high ground by providing a healthy community styled outlet for their host franchise.
One such area is Taylors Sq, Sydney once owned by the Piggot family (whom you know) closed about 3 years ago. It has been advetised on the website ever since.
The process for these outlets is transparent,however they do not disclose the Host for “new” outlets. Also Tabcorp when recieving such an application, go to the surrounding outlets to see how it will affect them.
The decision then is with Tabcorps. existing outlets when changing hands and if the the usage changes especailly after takeover,This is where the problem of transparency or lack of it occurs.
I guess we can’t really “shoot them” when newsagents sell tobacco, are we are posing a double standard even though I agree it’s not a good thing?
They also seem pretty committed to fossil fuel retailers.
They want to move online. So why are they signing up any new sites at all? Why tobacconists? Especially when tobacconists aren’t even open the hours that newsagents are.
I am glad to see this issue brought into the open here. Tabcorp has their reasons approving cigarette shops and petrol outlets as new retailers and not giving two hoots about newsagents who lose business as a result. We will never be able to understand their selfishness. They do something hurtful to existing retailers and you digest it and deal with it and then they do something more hurtful. They are an awful company.
Today I did my compulsory course on responsible Gamming that all Franchisees have to undertake. It is in my view nothing but a spin Doctors Joy and Delight (it reminds of something that Scotty our Prime Minister would push).
If I believe I have a problem gambler the best I can do is to politely point at a pamphlet or two or suggest the Lot’s website for help. I must still accept their bets though and put it on a credit card if that is the customer’s request. It explained that paying for the Lot’s products using a credit card is not credit gambling as there is contract with the Banks to pay the bill. Go figure.
The course leaves me in no doubt that the Lot considers it has the best ethics and morals in the world I am totally deficient until I am told what to believe and how to think
At the end of the whole process I passed with the compulsory 100% knowing I have been told exactly to think by Lotto. WOOHOO! It left a distinctly foul taste in my mouth and I know my staff who will also do this course think the same way.
Amanda/Mark , it is clear there is no transparency in the new outlet approval process. Any request for data or financial forecasts justifying the opening of a new outlet is simply blocked by Tabcorp on the grounds of “commercial in confidence” and “market sensitivity “. On the other hand existing outlets must provide full financial disclosure in any objection process.
Subaru your question is a good one and without transparency in the approval process one has to question the motivation of the franchisor. Certainly there are serious health consequences associated with the approval of new lotteries outlets in tobacconists.
I think the best approach is for lottery retailers to actively petition respective state governments and state politicians for a transparent, accessible to the public, process around new outlet consideration.
I say petition them because this is a matter for government in that they grant Tabcorp a licence to run the business and because the government controls lotteries for the community.
Politicians should be concerned about moves by this government overseen relationship that negatively impact local small business retailers.
The approach to politicians needs to reflect the high-stakes emotional narrative as they are more likely to understand that.
Stephen I feel for you. It’s a kick in the guts.
I bet you run a good outlet that meets their criteria and that is loved by locals.
I also bet they refused to disclose the details of their reasoning either than them saying it won’t hurt your business.
Tabcorp is disrespecting long standing retailers through these decisions.
Any new agent (or exisiting agent updating to the new corporate shopfit HAS to use TheLott approved shopfitters. You cannot use your normal shopfitter.
My shopfitter doesn’t have time to go and do their approval process
To me, this stinks of “jobs for the boys” and you have to pay whatever price they demand.
No one at TheLott can clearly show what advantage changing from a blue counter to a red counter can acheive for ROI.
Also, instead of adding more “franchises” to the business, maybe they need to listen to their existing franchisees thoughts on improving the customer experience and red tape involved.
For example efficient serving of customers by getting rid of scratchie scan on sale. If a customer wants 1 of each scratchie in the dispenser, it is so slow. If a customer walks in with 10 scratchies each winning a free ticket, its so slow. There is no thought (by TheLott) for the other customers of my shop that line up behind this person.
Scan of last ticket at the end of day was far easier, faster and more efficient. But no one at TheLott wants to hear it.
I’m sure there are plenty of you who have many ideas on how to improve TheLotts systems to improve the customer experience of your customers in your store
Calling them out on supporting tobacco doesn’t really work since the majority of current lotto retail network sells tobacco products. It is confusing that lotteries proceeds to governments are used to fund hospitals and other health initiatives but also helps supports retailers to sell tobacco.
Tabcorp is bordering on franchisee exploitation by issuing new outlets since they are fully aware that the growth of online is a clear trend now and that little is gained from expanding the retailer network in already serviced areas. The only winner is Tabcorp who is going for new franchisee fees while they can. They are probably counting on some churn to get more fees.
Unfortunately I don’t think any of the state lottery licenses are up for renewal anytime soon or elections so while a good idea, any pressure by politicians would be little and too late.
I disagree Pat with that defeatist view. These new outlets are predominantly cigarettes – quite different to newsagents that sell cigarettes. Also, around half newsagents no longer sell cigarettes.
Mark,
There is an old saying “you can’t be a little bit pregnant”
You either sell cigarettes or you don’t you either “Live by the sword or die by the sword”
Pat what you say is reality even though the licenses are not up for renewal the Tabcorp business is up for sale.
Taking the moral high ground on Cigarettes etc, as much as I agree with it is not going to work no matter how we state it. Unless we all cease selling them and take the stand- Fat chance.
Expressions of Interest have already made billions of offer for the Gaming side of the Business and Private Equity is looking at the consolidation of the most profitable part The Lott- Tabcorp bought it a low price from Tatts and if they can build the outlets the franchise is worth so much more.
We are barking up the wrong tree in thinking they only want on line. Sure they do -they want both- just like newssagents they need to convert one exposure to another and may the best exposure win.
No doubt they would like this to be on line as overheads are much lower however B&M is where the current strength is in customer aged base and daily usage.
Graeme, Tabcorp’s own annual report highlights the growth trajectory of online lotteries. I see no issue with that other than the ongoing marketing of online sales aimed at players registered in store. Clearly the margin derived from online sales is greater than from in store. Again no problem and all good for Tabcorp.
The problem is for lotteries agents our main competitor is online sales. Ie our franchisor itself with their compliance based remuneration model and their excessive floor and advertising space requirements Add to this at the same time there is a lack of territory protection for agents and a propensity by the franchisor to approve new competing outlets without consultation and transparency or any consideration of their loyal and hard working existing outlet owners.
Due to the conflict of interest and lack of transparency one can only question the motivation of approving additional outlets particularly from channels which continually rank poorly on Tabcorp’s own outlet ranking reports. I agree with Mark’s recommendation.
Steve,
i am not disputing what Tabcorp have stated I am saying that B&M is by far the greater outlet for Tabcorp. Yes they are competeing with us to see how much they can transfer to on line -every other company is doing this as well –
Please read what I said. Apart from this Tabcorp is a Franchise even when it is on a “Host” basis. Franchise do NOT have territories (check it out (ACCC) and those that did were restricted to their own brand, in Books there were Dymocks, A& R’s and Collins all of which did not duplicate in the same areas (suburbs) however Dymocks, Angus and Robertson and Collins Book depot could open alongside each other. Some suburbs have more than one newsagency Both or more may have Lotteries and cigarettes.
I am not sticking up for the way Tabcorp run with tobacconist 0r the extra outlets I am saying as a realist it is what it is, and legally so.
It is no good complaining about the space for your agrument is not correct. Tabcorp space at the Front Counter may be half of the full Counter or 2/3rds the total of the Front Counter is not much more than 20 sm. in a shop od 100 sm it is 20% making lotteries 10%.
I do space allocation of newsagencies professionally for many large organisations and individuals and believe me Lotto punches its weight well and truly psm. In your own words your store is in tourist area max two hrs from Sydney (tourists are not the biggest lotto buyers especially day trippers on weekends) Therefore it may not be the biggest return for you however for others it is crucial. I have stated the figures and facts in other posts and really can’t see the point in perpetuating the same, same, again.
I don’t Know Mark’s recommendation, i do agree with his thoughts re the selling and promoting of Cigarettes etc. however I point out legally and therefore rightfullyWE newsagents do the same. Marks stores do not.
If we bring this argument to force we will die by the very sword we are swinging. I don’t know why this can’t be acknowledged within the argument.
Alternatively, if we all give up cigarette selling as health idealists, then we would have a cause. Not a Franchise one but a community one.
I suggest that one should read the Franchise agreement and then go about what your appeal is that suits , however it’s not about tobacco or fuel selling which the post is.
It’s about whether Tabcorp is acting imprpoperly according to” Hoyle” I believe they are just as News Corp had an agreement of no compensation.
Mark has been saying for yonks diversification is the answer- I totally agree.
Steve re the Graph it is right I acknowledge the Graph however as an Accountant you know that if there is not a reference to the base of etc then the percentage is comparison is useless. The trajectory is growing at XYZ % 17% 30% of what is the base?
My recommendation is: An online portal listing all new location requests and providing easy upload of comment / feedback would facilitate transparency and, hopefully, fairness. It would also provide communities with greater information about proposed outlets – such as what approval may mean for the sale of tobacco, for instance, in their area.
Thanks Mark.
I believe as stated that this would do harm to many newsagents. The community decides now where they shop and with whom they shop.
Asking them re our situation is really asking for problems as the community (exactly which section) wouldn’t know nor should they be involved with Tabcorp’s decisions. It is a legal matter and they conform with this.
The argument is too emotional and too vague to get any traction I believe the tobacco issue is a tough one. There must be a better way.
Subaru,
Totally agree with you. Plus when their appointed shopfitters cannot progress efficiently which makes you fail to do the shopfitting on time following their schedules, you better be careful because they will give you a breach anyway. They apparently do not care about your shop’s own consideration but just like ‘just finish it like I said’. I also feel Tabcorp is really happy to send breach letter easily for any possible situation. But the question is doing this to your retailers brings any good?
For scratches, Tabcorp just do not tell customers how to scratch appropriately but leave to us the retailers. Quite annoying when busy hours or after Xmas like you said.
I dealt with these and related concerns myself by getting out of lotteries almost 10 years ago. My three Melbourne based newsagencies have done well and continue to do well without lottery products.
Newsagents need to understand that trading without lotteries is an option, a viable option.