Probe into gambling a good idea? You bet!

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

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

The next day they put the motion on notice - and about an hour and half before the Senate was due to vote on the matter on Thursday the Australian Crime Commission announced that 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 a show of hands: maybe Greens leader Christine Milne should drop into Wrest Point Casino next time she's in Hobart and have a flutter.

Exactly what the ACC has discovered is the subject of debate, but the inquiry that surfed in on its back can still be useful. Sports betting is the fastest growing part of our gambling industry, and it 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. According to the Centre for Gambling Research in 2003, 77 per cent of Victorians 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, and for state governments, a major source of tax revenue.

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 pokies accounted for $10.5 billion, or 55 per cent, of the total. Racing accounted for $2.6 billion 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 that 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 gambling 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 pokies are not widespread, to 13 per cent in Victoria and 9 per cent in New South Wales. The percentage take 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 army helps explain the political power of the gambling industry lobby.

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 pokie machines. Quotas were the device of choice for controlling pokies, but lawmakers failed to understand that the revenue-collection potential of gaming machines was about to leap as mechanical pokies were replaced by electronic gaming machines that offered combination bets: gaming machines were collecting 29ยข in the national gambling dollar in 1986 before pokie machine numbers expanded and the new 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 will look at the advertising and promotion of gambling services in sport, including in-ground advertising and promotion. It will also look at the influence of sports betting on gambling generally, and its potential to be a catalyst and enabler of 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. The Greens announced on Wednesday that they were working on legislation to ban all broadcasting of betting odds during sports or sports-related programs.

Even so, the inquiry can do good work. As the Productivity Commission did, it will find that reliable statistics on the industry are scarce. It can 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 to widespread annoyance about the advertising of odds on games such as those by Tabcorp that ran during the Australian Open tennis it can work out how to regulate the fastest-growing part of the gambling industry without hobbling it.

That would involve looking beyond the obvious need for curbs on advertising and promotion to also consider how big sports betting is and is likely to become, and the technology such as interactive gaming might supercharge its growth, just as electronic gaming machines transformed pokies in the '90s.

Framing regulation for what sports betting may become, in other words, rather than what it is. A bigger task, but worth the effort: we need a well-regulated sports betting industry, not one that is 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

Related Articles