Love of a punt a bit of a myth, but those that do make it huge

On Tuesday, February 5, the Greens let it be known that they were about to push for a new Senate inquiry into sports betting in Australia in the wake of the announcement by Europol, Europe's organised crime watchdog, that it suspected officials, players and criminals had conspired to fix the results of more than 380 professional football matches.

On Tuesday, February 5, the Greens let it be known that they were about to push for a new Senate inquiry into sports betting in Australia in the wake of the announcement by Europol, Europe's organised crime watchdog, that it suspected officials, players and criminals had conspired to fix the results of more than 380 professional football matches.

The next day they put the motion on notice - and about 90 minutes before the Senate was to vote on the matter on Thursday the

Australian Crime Commission announced it had evidence of drug use and possible "match-fixing and fraudulent manipulation of betting markets".

What are the odds? If there was going to be any push-back against yet another inquiry into gambling in Australia it evaporated with the ACC announcement, and the Senate approved the inquiry on hands: maybe Greens leader Christine Milne should drop into Wrest Point Casino next time she's in Hobart and put some dough onto the roulette table.

Exactly what the ACC has discovered is the subject of debate now, but the Senate inquiry that surfed into existence on its announcement can still be useful. Sports betting is the fastest growing part of Australia's gambling industry, and isn't properly understood.

Paradoxes abound in the gambling industry. Despite the age-old line that Australians love having a punt, they don't much care for it. For example, in polling on the attitude of Victorians to gambling by the Centre for Gambling Research in 2003, 77 per cent agreed with the proposition that gambling did more harm than good. It didn't matter much whether they actually gambled or not: 85 per cent of those who didn't gamble believed that it was a community negative, but 75 per cent of those who gambled did too.

Australians may not particularly like gambling, but enough of them do it to make it a major industry, however, and a major source of tax revenue for state governments.

The Productivity Commission estimated that about $19 billion was spent on gambling (that is, lost by gamblers and collected by those offering the bets) in Australia in 2008-09, up from $17 billion a decade earlier and about $7 billion in 1988-89.

Spending on poker machines accounted for $10.5 billion, or 55 per cent of the total. Wagering accounted for $2.8 billion, including $2.6 billion on racing, and spending on sports betting was estimated to be just $200 million.

The figure would be substantially higher now. Online wagering firm Sportsbet released a report last year that estimated sports betting turnover was growing at a rate of 13 per cent a year, three times as quickly as betting on the races. It estimated sports betting turnover was running at $3.3 billion a year: that means net spending on the Productivity Commission's measure is probably now above $300 million.

The commission also detailed the jobs the industry creates and the way governments are on a gambling tax revenue drip feed, both real world factors in any debate about what to do about the sports betting phenomenon.

Gambling taxes averaged 10 per cent of state revenue, and ranged from 4 per cent in Western Australia (where poker machines are not widespread) to 13 per cent in Victoria and 9 per cent in NSW. The importance of gambling to the states rises and falls as other sources of tax revenue fluctuate, but it's obviously a key earner for them.

Official statistics are hard to get, because the Australian Bureau of Statistics does not closely track the industry. But the Productivity Commission published estimates that hotels with gaming machines employed between 68,000 and 78,000 people, that clubs employed about 81,000 including 32,000 licensed staff, that casinos employed almost 20,000 people including almost 8000 gaming staff, and that wagering companies employed almost 9000 people.

That's a small army, which helps explain the political power of the gambling industry.

What's interesting, however, is that what we gamble on has changed significantly in the past two decades. The same might be occurring now as the internet supercharges sports betting and younger generations turn away from the races.

In the 1980s the states progressively laid legislative foundations for casinos and poker machines.

Quotas were the device of choice for controlling poker machines, but lawmakers failed to understand that the revenue collection potential of gaming machines was about to leap as mechanical machines were replaced by electronic gaming machines that offered combination bets: gaming machines were collecting 29¢ in the national gambling dollar in 1986 before poker machine numbers expanded and electronic machines took over.

By the time the Productivity Commission looked at the industry their share of the gambling purse had almost doubled.

The inquiry that the Greens have created, with input from independent senator Nick Xenophon, has a brief to look at the advertising and promotion of gambling services in sport, including in-ground advertising and promotion by commentators. It will look at the influence of sport betting on gambling generally and its potential to affect the integrity of sport by, for example, contributing to match-fixing.

The Greens have already pre-empted it to an extent, and also overrun moves by the radio and television groups to produce a voluntary code at the urging of the federal government. Greens sport and gambling spokesman Senator Richard Di Natale announced on Wednesday that his party was working on a bill to ban all broadcasting of betting odds during sports or sports-related programming.

But even though it has been set up with agenda, the inquiry can do good work.

As the Productivity Commission did, it will find that reliable statistics on the industry are scarce. It could recommend that the ABS fix that problem, pronto.

And rather than react reflexively to the recent revelations about links between gambling and match-fixing and widespread annoyance about the advertising of odds on games, by Tabcorp, for example, during the Australian Open, it should work out how to regulate the fastest growing component of the gambling industry without hobbling it.

That will involve looking beyond regulations on advertising and promotion that are definitely needed to consider how big sports betting is, and how big it might become.

It will also involve getting an accurate picture about how technology, including interactive gaming, can accelerate its growth - as occurred with electronic gaming machines in the 1990s: a bigger task, but worth the effort.

We need a well-regulated sports betting industry, not one so shackled and restricted that betting demand migrates via the internet to less well regulated venues overseas where rorts, including match-fixing , can flower.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Join the Conversation...

There are comments posted so far.

If you'd like to join this conversation, please login or sign up here

Related Articles