Hawke’s Vanuatu punt

Business

FORMER Australian Prime Minister Bob Hawke has become an investor in a new gambling venture based in Vanuatu. Under the proposed scheme the Vanuatu registered company VITAB Ltd, in which Hawke is a shareholder will take a substantial portion of the Australian TAB (Totaliser Agency Board) market in Vanuatu. VITAB Ltd has signed an agreement for agency rights with the Australian Capital Territory TAB.

The company is also interested in tapping into the lucrative Asian gam bling market. Being based in Vanuatu the company pays no corporate taxes and potential Asian punters will pay no taxes in Australia and will be able to maintain complete confidentiality which is seen by many in the industry as one of the main advantages for Asian gamblers, Vanuatu already has a three betting agencies which deal both with local as well as off-shore punters. It also has a

branch of the Victorian TAB.

The game plan for the new Australian company is to attempt to capture some of the huge $lO billion per annum Australian gambling market. In particu lar the company is reported to be aiming at the professional punters which consti tute 5 per cent of the Australian market.

The scheme works by punters placing bets in Australia by phone or computer link-up. The great advantage is that VITAB would, because of its links through the ACT TAB, have access to the huge pools of prizes and income in the Victorian, South Australian and Tasmanian TABs.

The company is considered a sufficient threat to the Australian TABs that the state TAB heads in Australia are to meet soon to consider strategy options. The fear of the TABs is that VITAB will offer inducements to capture the large Austra lian punters and thereby decrease the profitability. VITAB chairman Daniel Kolomanski is reported to have said that he would not be offering inducements to Australian punters but he would cer tainly be looking to attract possible punters from the lucrative Asian market.

The company will also be looking to expansion to the emerging Chinese and Vietnamese markets.

In Vanuatu the company pays no corporate tax as the country has no direct taxes but does pay a turnover tax equivalent to 1.08 per cent of sales. The company is expected to have a turnover of $2O million in the first year and this is expected to rise to $5O million by the second year of operations. This will mean a substantial boost for the strapped Vanuatu government which if predic tions of revenues are correct stands to earn in the vicinity of $500,000 at end of the second year operations of the com pany.

The potential loss of revenue from the totalisator business of such concern that the Vanuatu based business arrangement with the ACT TAB was raised recently in the ACT’s Assembly. The ACT Minister for Sports, Wayne Berry, admit ted that the agreement between VITAB and the ACT TAB “is silent on the issue of inducements”.

He went on to say to the ACT Assembly “Members should appreciate that the offering of substantial induce ments to investors is purely a commercial matter an TABs are like any other business, are not precluded from using such methods to attract business.”

Meanwhile, in Vanuatu sources close to government indicate that the investment is by no means entirely complete.

Existing TABs in Vanuatu, which in clude a subsidiary of the Victorian TAB may not be pleased to see further completion. VITAB like other betting shops and totalisators in Vanuatu will not be precluded from taking bets from ni-Vanuatu and will not be restricted from trading on-shore. □