Today's launch of Typhoon Pools marks the second totalisator licensed by Australian Territory, Norfolk Island.

The tiny island in the South Pacific is 1600km from Sydney, yet it is as much an Australian Territory as the Northern Territory and the ACT. Norfolk Island has its own Parliament with 11 MP's who meet once a month to deliberate on its laws.

In common with the NT and ACT, Norfolk Island is able to legislate on gambling matters. Its first foray into totalisator licensing was with AusTote in 2003.

AusTote was the first new totalisator licensed in Australia for decades and has enjoyed success in spite of poor promotion and a very limited product range. A majority share in the business was sold to Mark Read's International All Sports in 2005 by founder Mike King and his partners.

At the time, it was expected that IAS would take advantage of mainland gambling legislation which permitted advertising by totalisators licensed by a State or Territory government.

Even though this was possible, the TAB's had refused to openly advertise for new clients up until that point, preferring to maintain the "gentlemen's agreement", which saw them offering the same takeout rates and betting on each other's racing product free of charge.

Of course, even at that stage, there was fierce competition between the TAB's for high roller clients, with rebates and other benefits freely on offer to induce a switch of punter loyalty.

Despite a lack of marketing and offering win only pools, AusTote has grown on the back of a low takeout rate to the point where today it achieved pools of $40,000 or so per race at Sandown compared to SuperTAB's $200,000 or so.

Despite having only 20% of TabCorp's turnover, it can safely be assumed that AusTote has considerably less than 20% of its overheads.

Into this competitive space has now thrust Typhoon Pools, a privately funded totalisator with state of the art technology. Built on the back of its proprietory Typhoon software platform, the fledgling tote is able to offer products ranging from simple win and place through to its "Force 10" product which allows punters to bet on the outcome of 10 events.

Nick Plowman, Typhoon's CEO sees a much larger market than his company can service from Norfolk Island.

"If you look around the world, you see that most pari-mutuel betting platforms are based on technology which is decades old", he said.

"They do horse racing badly and they really suffer when trying to cope with sporting events such as golf and tennis."

TabCorp's continuing inability to cope with races with more than 24 runners is a classic instance of the limitations of older pari mutuel systems.

Legacy totalisator systems also cope badly with the requirements of internet wagering. They require nightly downtime where the days transactions are audited and archived, they don't accept multiple currencies and pooling with other totalisators requires years of programming and constant maintenance.

New bet types are time consuming and costly to implement. For instance, TabCorp's Big 6 product took 2 years and millions of dollars to implement.

In contrast, the Typhoon platform allows :-

Internet betting out of the box,
unlimited contestants in an event,
multiple pools on the same event,
contestants identified by number, shirt number or name,
different commissions for each individual event,
dividend approximates on each combination in an exotic bet,
comprehensive records on punter behaviour by recording all bets forever,
multi-currency betting into each pool,
24 hour operation with no downtime

Plowman expects that these capabilities combined with a rapid deployment cycle will be attractive to existing totalisator operators looking to upgrade their systems or break into new markets.

For instance, if the cost of developing an entire new totalisator platform is low, bidders for the new Victorian totalisator license may be prepared to pay a higher price.

Typhoon's developers, Arnold Kopff and his son Greg are the second and third generation of dedicated wagering system designers, with 40 years experience between them.

Kopff has developed 35 totalisator systems with his most recent project before Typhoon being the Korea Racing Association's nationwide system.

With its low overheads Plowman plans for Typhoon Pools to offer takeout rates "at least 30% lower" than those of the mainland TAB's. He has no problem with paying race field levies imposed by racing administrators.

"We are already licensed by Racing NSW", he said.

"We will not be betting on Victorian races until we have approval, which we expect will be within the next month."

With advertising restrictions abolished, Typhoon Pools will have no legal impediment to promoting its product to a local and international audience.

"We expect that it will take a while to build up our pool sizes", Plowman admitted.

"However we own the technology and our overheads are low, so we can take our time."