This winter, the federal government rushed to regulate sports betting, with a live odds ban followed up by the AFL and NRL promising to impose their own vetoes on “exotic” bets and on-field cheats.
Stephen Conroy’s edict — which will stop Tony Greig droning on about Betfair during the cricket — received strong backing from state governments. But a crunch of the latest gambling numbers reveals outlays on footy and the cricket are the lowest of low-hanging fruit — by backing the crackdown provincial leaders have precious little to lose.
Take Victorian gaming minister Michael O’Brien’s presser bragging that he had “consistently expressed concern about the blurring of the line between advertising and editorial when it comes to sports betting advertising during the broadcast of live sporting events. ”
Particularly “insidious”, O’Brien reckoned, was the promotion of sporting odds targeted at children.
Buried further down the press release was the kicker. The Baillieu government was opposed to the federal government’s mandatory pre-commitment technology for poker machines, preferring a voluntary system that put the onus on individuals, not governments.
Pokies regulation is one area in which the states are at one, with South Australia, Queensland and Western Australia joining a chorus of opposition to Andrew Wilkie’s and Julia Gillard’s proposed laws. Victoria is the most virulent, threatening to take the federal government to the High Court if it proceeds with the mandatory measures.
A quick look at fresh Australian Gambling Statistics data released quietly earlier this month reveals why. Sports betting almost completely fails to register on Australia’s gambling radar — a reduction in revenue from the likes of Betfair, Sportsbet and Sportingbet would have next to no impact on state government balance sheets.
As a proportion of 2008-09’s total government gambling tax take of $5.2 billion, sports betting makes up a pitiful 0.34% or just $17 million across the country. Even the declining pastime of racing rakes in 22-times more cash than heavily-promoted wagers on the cricket and the footy.
Sports betting’s minnow status is reflected the actual amount punters spend. Real per-capita expenditure on sport was just $13.32 or 1.2% in 2008-09, compared to a whopping $975.23 or 85.1% for “gaming”, which includes poker machines and casino expenditure.
And according to the new AGS data, considered the bible among serious researchers, the dominance of the one-armed bandits is even greater when you include machines in casinos, echoing last year’s Productivity Commission report that showed electronic gaming’s total share had risen from 40 per cent to 75 per cent over the past 20 years.
It’s true that sports betting has undergone rapid expansion — 16% in real terms in 2006-07, 18% in 2007-08 and 5.6% in 2008-09. Next year’s 2009-10 data is expected to show another spike. In Tasmania sports betting grew 183% between 2007-8 and 2008-09, thanks mostly to Betfair’s 2008 High Court victory against the Western Australian government and in the other hotspot, the Northern Territory, $390 or 16% of an annual per capita spend of about $3,000 was spent.
The NT is the currently the only state government that issues licences for online gaming with the vast majority of betting websites filtered through the Top End.
Online betting is still dangerous, in the words of Tim Costello, because you can “lose your home without leaving it”. But in real terms the vast majority of Australia’s $19 billion gambling market continues to operate through pokies owned by conglomerates like Woolworths at clubs in poorer suburbs.
Pokies expert Charles Livingstone from Monash University’s medicine faculty told Crikey that “state governments are Australia’s biggest pokie addicts. Their total revenue — $5 billion — shows how deeply conflicted they are on gambling regulation.”
“‘It’s easy for Australia’s state governments to crack down on sports betting; their tax take is minuscule from that source compared to the pokies. And much of it goes to the Northern Territory, or Tasmania, anyway. Of course, there are five billion reasons why regulating pokie gambling to make it less harmful is an entirely different matter.”
Livingstone said pokies were still the biggest game in town as far as gambling in Australia is concerned, especially the $5 billion lost each year through the souls of the pathologically addicted.
“Despite recent hoopla, sports betting is still a small player. Even casinos are a long way behind the pokies; and NSW continues to be the country’s most pokie riddled state.”
Livingstone’s view is born out by the hard data, as the graph below shows.
Real poker machine expenditure, excluding casinos, was $10.5 billion in 2008-09, a small decline of $34 million on the previous year thanks to the Global Financial Crisis. NSW sits atop of the shame table, accounting for $4.8 billion or 46% of the damage with its 97,067 machines, followed by Victoria (25% with 29,272), Queensland (18% with 45,571) and South Australia (7% with 13,720).
The total number of machines paints a sorry picture.
South Australian Senator Nick Xenophon, a strong supporter of Wilkie’s legislation, was scathing when contacted by Crikey, and called for the states to get out of the way.
“State governments are the biggest pokies junkies in the country. The rivers of gold they rake in from gambling taxes come from rivers of tears.
“This is why federal action is essential when it comes to poker machines. The states just can’t be trusted to do the right thing.”
It’s no wonder premiers would prefer to gag the likes of Richie Benaud than do anything that might disrupt the stream of misery that ring-fences their credit ratings. Unlike the battlers that vote for them, they’ve been hitting the jackpot for years.
I agree with your comments about the need for pokie reform. But I hope your article is not intended to suggest that the reforms to sports gambling should nit have happened. The concerning aspects of sports gambling were that they opened up new “audiences” for gambling; normalized gambling by making it the normal way for understanding sport; and allowing gambling anywhere through the use of gambling apps. Most sports gamblers were young men aged 18-24. They were tomorrow’s problem gamblers. The reforms will hopefully stop the damage before it occurs. If only such reforms were taken with pokies in the early days, we probably wouldn’t be here debating Andrew Wilkie’s reforms.
Mr Crook,
What went wrong with your graphics? The colours are indecipherable. The resulting graphs are meaningless.
@John In the first graph sportsbetting is indecipherable precisely because it’s so small. Maybe you’re referring to the “real poker machine expenditure” one? Did you try clicking on the graph itself? Should expand in your browser.
Gambling is an extra tax on the stupid – unfortunately it also affects those dependent upon their income. It’s just another example of the “sin” taxes beloved of the puritans, left & right & wrong, such as tobacco & alcohol excise. The most puritanical of western nations actually has a agency, Bureau of Alcohol, Tobacco & Firearms, complete with a heavily armed SWAT function.
Figures 1 and 2: No green.
Figure 3: three states visible, just. The remainder are missing in action.
Figure 4: Kinda OK.
The images seem to be generally washed out… overexposed.
Tried IE and Firefox.
I understand your point, though.
Last week at Rotary, a member addressed the club with a full-on one eyed view from the ClubsNSW playbook, full of concern that the community organisations that we all rely on would be wiped out, that the 50 employees of the club of which he is CEO would be on the street, that banks would not get their loans repaid, that clubs would go to the wall in 12 months.
The message was that gambling volume (ie the number of dollars put at risk in an individual’s session) is overestimated by Zenophon, by counting the number of plays and the value of each play, instead of just the starting and end position of a gambler’s wallet. If a man puts $5 through a machine but along the way has won $10 in pays that he has also returned to the machine, has he gambled $5 or $15? I like this article’s focus on nett losses, which is quite clear.
Further, reportedly, Labor has been held to ransom by two Independents, the proposed legislation impinges on State rights and is thus unconstitutional, the proposed technology is not available anywhere in the world, Norway tried this type of legislation but it failed and has been rescinded. My comment: “So what?”
The list went on and on.
He is a close friend of mine, but on this topic at least, he exaggerated every point in his favour and ignored all else.
I particularly liked the tack along the lines that gambling support groups are supported by clubs and thus clubs are showing that they care most. Also, that clubs have neither the need nor the right to suggest to patrons that they may be overindulging in their gaming – it is up to the patron to recognise the addiction from which they suffer and to do something about it… the clubs have no say in the matter and the gambler will only go elsewhere if challenged, so the problem is not addressed but the club loses the income.
This shallow crap went on for half an hour.
Sad to report, there was little or no recognition that pokies in pubs and clubs and the casino in NSW are dangerous, damaging and represent a huge drain on society.
There’s one point I do agree with him on, and that is that hotels and Woollies and Coles and Matheison have no community obligation so the proceeds of gaming go into private hands whereas the proceeds from club gaming is held in not-for-profit community based organisations which have constitutional and legal limits on how they spend their money – often, it seems, on huge and garish palaces.
How keen would pubs be if their pokies had to be owned and operated by community organisations, rather than for private profit?
Zenophon is right.
Perhaps the Federal Government needs to tie some state grants to poker machine control programs, in order to wean them off the pokies.
For mine, Zenophon doesn’t go far enough. Beyond mandatory user ID and setting of daily limits, I would add phasing out of all gaming machines which are not owned and operated by community not-for-profit organisations, with the possible exception of casinos, about which I know nothing and care not at all. Those community organisations, which currently in NSW are obliged to make donations of part of the proceeds of gaming to local sports, social and community purposes, should have the percentage thus disbursed increased progressively, till at least 60% of nett is returned, and for this to be reported publicly and in detail every 6 months or so. The administration and related charges need to become public, because these are also included in the grossed up figures which are currently available.
Who cares that the club holds an annual dinner to publicise the community program? The cost of this self-advertising is currently included as a donation to the community, while not a cent leaves the premises and it degenerates into a free night out for the hangers-on in the club industry.
Sorry, dear readers – I have a bit of a hobby horse going here, so it’s best that I stop now.