Gambling at the TAB, monopolies and innovation

I like to place the odd sports bet. In New Zealand I have no official option but to do this through the TAB, which is a state-sanctioned monopoly.

In other countries there are often many competing institutions offering odds on various events, including sports. In fact, there are now many companies that operate across borders in many countries,  such as BetFair and Bet365.*

The lack of competition in the betting market in New Zealand stifles innovation in the betting options they offer. One recent pundit proclaimed the TAB “the most conservative betting agency in the world”. Essentially the TAB has no incentive to innovate, as they know punters have limited ability to legally gamble through other avenues.

The TAB have started opening more interesting books on the FIFA World Cup, such as whether Lionel Messi will score more goals during the campaign than the All Whites combined (Messi the hot favourite at $1.55!).

If the gambling market were officially opened up to competition I suspect we would see a lot more of this innovation.

*I’m not sure of the legal status of these organisations in New Zealand, although I understand it is possible to open accounts with them (legally or otherwise).

  • Shame iPredict is barred from those areas.

  • Exactly, iPredict would have to be one of the most innovative organisations I’ve seen in this area. I love their decentralised model, where users make suggestions on new stocks. Quite a contrast with the top-down TAB approach…

  • Does iPredict count as gambling in NZ?

  • @rauparaha
    Nope, that is how they are allowed to operate. They are not allowed to open stocks on areas that might compete with the TAB. e.g. sports.

  • iPredict is an exempt exchange operating under a specific regulation authorized by the Securities Commission.

  • “If the gambling market were officially opened up to competition I suspect we would see a lot more of this innovation.”

    And that would offer me some substantial consumer surplus – love random Fifa World Cup bets 😀

  • Is there any particular reason for the government to prevent firms from running private gambling operations? Other than the obvious “nom, nom, more money for meeeee!” I don’t know anything about it so I’m just curious why we have a state monopoly on something that doesn’t really seem to be a ‘core’ state function.

  • @rauparaha
    It seems to me to be a legacy thing, back from the days when gambling was seen as a problem that needed to be kept under state control (see 6 o’clock swill). That’s always been my take on it, I’d like to see if anyone else can shed more info on it.

  • @rauparaha


    Gambling is addictive and it ruins lives guys – seriously, we can’t trust private individuals with their own choices :/


  • Amazingly coherent for 330am on a Friday morning. 😛

  • @goonix

    Red wine = top economic analysis

  • It was all vodka last night mate.

  • @goonix


    Vodka soda = top economic analysis