The Lott Commission Review 2018

Dear retailer,

After several meetings with The Lott and discussions around our submission on commission and various other topics which were covered as part of the new licensing structure, we have received a determination from Tatts which will also be provided to the Minister for Gaming next week.

We are disappointed that further increases in commissions were not part of this determination. We sought further concessions on several issues such as the Digi Pos fee and other structural charges. Notwithstanding a more concerted effort to engage with the associations, we feel that the release of the determination as a fait accompli was in essence not in the spirit of the negotiations.

We felt that the negotiation process was lacking from a more detailed discussion around commission growth and that the determination by Tatts did not adequately consider the challenging environment retailers are faced with.

Tatts’ communication to associations late Thursday, detailed that Tatts would inform the Victorian Gaming Minister early this week of their outcomes from the commission review mechanism (CRM). As a result, we have responded with a draft asking for a clear commitment from Tatts in commission growth.

VANA is also seeking discussions with the Minister for Gaming, to express our need for commission increases in these challenging times. As an industry, we were seeking to offset rising commercial costs and structural fees via commission increases and or removal of imposed fees. VANA will continue to seek further concessions in this area whilst we accept some key positives from this review.

VANA has been lobbying for the Gift Card product to be made available to all franchisees across the network, not to be solely launched through other channels. We are pleased that this advice has been taken on board and Tatts can see the absolute benefit to all stakeholders of having a new product launched and sold through a strong retail network.

VANA is also pleased to see the removal of the weekly scratch ticket fee, which has presented a considerable burden to retailers. This is a move in the right direction but more still needs to be done.

This new era of a collaborative approach by Tatts and associations has allowed some insightful discussion which has resulted in some undertakings from The Lott. One of the key undertakings has
been the acceptance of the need to review franchise costs and we are pleased that Tatts will engage with a consultant to review these.

However, we note with interest the undertaking by Tatts to consider varied options that augment the omni-channel offering, which includes online participation as they evolve their 360-degree view of the customer.

Customer experience is key to driving growth and the realisation that physical retailers can play some role in this space whilst engaging with the online offering is welcomed news. Although Tatts make no commitment at this stage, we feel that there needs to be a more structured framework put around some timelines where discussions can begin to take shape around online revenue share. We will be looking to challenge aspects of the determination with a view to engage with ministerial departments and monitor developments as they evolve.

To access the full Tatts determination please log in with your membership code.

Chris Samartzis
General Manager Vana Ltd

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