When the government-owned Sports Toto was sold off to Vincent Tan in 1985 by Dr Mahathir Mohamad, it came after a campaign in the Sunday Mail, then under the editorship of Ahmad Sebi Abu Bakar, featuring articles by Shaik Osman Majid. Much of the criticisms laid against the government-owned Sports Toto rested on how ineffective it had been in raising money for sports development.
Ahmad Sebi, a protege of Mahathir’s alter ego Daim Zainuddin, later became TV3 boss, and was a key player in the Sport Toto privatisation and other deals during those go-go years. During the 1987 Operation Lallang, he was detained for a week after being stopped at the airport with RM20mil in cash in his suitcase as he was trying to leave the country.
A quarter-century later, as another Vincent Tan betting licence gathers controversy, it is pertinent to ask how much the Vincent Tan-owned Sports Toto has contributed to sports development as a percentage of the total bets placed with the company since it became the magic cash cow of Berjaya group.
The government-owned Sports Toto was given a licence by Tunku Abdul Rahman in 1969 to raise money for sports development — that’s the “sports” part of the name. The VT-owned company’s contribution to the National Sports Council in the 2008-09 financial year was RM62m, “a laughable 1.7% of the year’s takings from bets. Its profits were 15% of revenues. By comparison:
The UK National Lottery returns 90% of all bets back to the people. Camelot, the UK lottery operator, takes only 10% of revenues, split between the operator and ticket-sellers. Camelot works with a profit margin of about 0.5% of the lottery’s revenues. Sports Toto in 2008-09 made pre-tax profits of RM558m, a 15% return, on betting revenue of RM3,571m.
» Real reforms worth the gamble
VT being charitable?
Last night’s news was all about Vincent Tan deciding to “donate to charity” the entire RM525m from the sale of Ascot Sport’s betting licence. “I will get zero from this deal,” he’s quoted by Insider. Big deal. His net worth, according to Forbes, is USD1,600mil — or RM5,240mil. The money he’s supposedly “donating” to charity is just 10% of his net worth.
In fact he says he’s giving the money to his own foundation. He is a trustee. So is his son Robin, who still owns 30% of Ascot Sports. (Dr Lim Chong Eu is also a trustee.) The foundation is the one that will actually fund charitable projects.
So Vincent Tan & Son still control where the money goes. Patronage on a grand scale. So much for getting “zero from this deal”.
Hardev elevated
Congratulations to Hardev Kaur, elevated to Datuk in the birthday honours. Hardev and current NSTP and Media Prime executive director Ahmad Talib »(Pahit Manis) were both part of A Kadir Jasin’s team at Business Times all of whom who later went on to lead the NST. Hardev is still keeping busy as a special officer Najib-style at the Treasury, I’m told.
It’s the people’s money. Give it back. But keep some to pay for things that will benefit all the people, and not just some already-rich towkays or their already-rich companies.
Sports betting runs into the billions. Vincent Tan himself estimates that the government could earn as much as RM3bil a year in taxes. At 26% company tax on profits that means gross profit of up to RM11,500 a year. Almost billion a month.
No wonder they’re salivating. That’s why the system must be changed.
Allow Vincent Tan and Berjaya to only take a management fee, up to 10% of all bets, off the top. They can pay for the costs of running the betting system out of that, and keep what is left over.
Use the balance of 90% to pay back the people. Use 60% for prize money. Keep 26% for taxes. Put the remainder into a fund for sponsoring heritage, arts, culture, and social welfare. Let everyone apply for grants. For example, subsidise all museums for free admission. Or set up more libraries, with free membership to all. Give grants to set up school orchestras and organise free public concerts. Boria troupes. Dondang sayang troupes. Wayang kulit troupes. Chinese wayang troupes. All kinds of cultural stuff we are about to lose which no one wants to pay for.
Do the same to Sports Toto, 4D, and Damacai
Change the system by which gambling licences are given out. Set fixed terms for licences. Call for open bidding for licences. Allow each bidding company a fixed profit margin. Here’s one way. Assume a total of RM9bn in bets collected by the three companies. Allow each company a management fee of up to 10% of total bets. Allow 60% of receipts to be returned as prize money. After paying income tax, there would be a balance of RM2.4bn to be disbursed in heritage grants.
Figures given by way of example only, and are not company accounts
That’s RM2.4bil a year — from the numbers games alone — available to be spent on worthy causes that the people themselves could decide on. Set the same system on sports betting and there could be as much as a billion a month extra for good works.
Change the system. Don’t allow the people to feel beholden to a politician or tycoon grandly lording it over them by selectively dishing out so-called patronage. The sheer gall of it all. These towkays are using the people’s money — then making the people feel grateful that he’s throwing some crumbs back at them.
The system must be changed. Who’ll take a gamble on reforms?
It could work either way, Boh Low! Imagine if the Chinaman Vincent withdraws the wealth and use it elsewhere. He might not be so dumb to put all his eggs in one basket. OK so each has a hold over the other!
It reminds you of the contention that, if Hang Tuah was Chinese, we never really have moved much, have we?
But we might have started something with reformasi. Capital and wealth should have no physical home. That’s what that globalist Japanese consultant, Ohmae, reiterated. There’s plenty of capital amongst the Overseas Chinese and all the Diaspora. It’s there for the sharing. It might be looking for home base or residence but it has its terms – some good, some not so good!
At the end of the day, there is always something beyond cold cash! Some good, some not so good!
Comment by Watcha — June 13, 2010 @ 12:08 AM |