Promotion of gambling short-changes Australian sport … and its fans

Some sporting organisations have called for veto powers on “exotic” betting. Joe Castro/AAPimage

GAMBLING IN AUSTRALIA – Australians spend about $20 billion every year gambling. This level of expenditure is, according to The Economist, the highest in the world on a per capita basis.

Some would argue this reflects Australian’s love of a bet. It’s more likely that what it reflects is Australia’s highly accessible gambling markets.

Australia’s 200,000 poker machines consume close to 60% of the gambling dollar. A long way down the list, but catching up fast, is sports betting, which in 2008-09 was estimated by the Productivity Commission to constitute about 1.2% of Australia’s gambling market – $230 million in expenditure.

Most wagering is still on horses. But the sound and fury around sports betting has grown fast, and it’s now worth closer to $400 million.

This rapid growth was the result of a successful challenge against WA legislation by Betfair, a betting exchange operator, half owned by Packer interests and licensed in Tasmania.

In 2008, the High Court determined it was unconstitutional to prohibit interstate operations by such gambling operators. This meant that online gambling operators licensed in small jurisdictions (notably the Northern Territory) could expand their operations into states where they were not licensed.

The result was a scramble for market share, utilising aggressive sponsorship and advertising, including sports sponsorship and deals with governing bodies.

A different style of bet

This growth is not uncontroversial. Earlier this month, sporting organisations called for veto powers on some types of “exotic” or “spot” bets, such as how many no-balls might be bowled in a particular over during a cricket match.

These types of bets are easily corruptible, and have already lead to scandals in international cricket and in Australia, the NRL.

A couple of weeks before that, state and federal gambling Ministers declared that unless in-call promotion of odds ceased within 12 months, legislation banning it would be introduced. Independent Senator Nick Xenophon has already proposed legislation covering both practices.

Clearing up sport

Problems with sports betting are at least two-fold. The first area of concern relates to the possibility of corruption, damaging a sport’s integrity and leading to a loss of confidence among fans and participants.

The impact of such scandals has been profound in some sports, notably international cricket, but also, in Australia, with the NRL.

Players' reputations are trashed, and the sport’s administrators have to play catch-up to demonstrate to the fans that corruption has been eliminated.

But doubts often remain, which can significantly damage the enjoyment previously experienced by those who love their particular game.

Perhaps more importantly from a public health perspective is how the promotion of sports betting can influence people to look on it as a necessary element of their enjoyment of the game, normalising gambling via its connection with sporting heroes and highly entertaining elite sport.

It’s all about the money

Professional sporting codes present massive marketing opportunities. The TV rights for AFL were recently sold for a record $1.25 billion, an amount that underscores the importance of the code to the marketing strategy of many significant companies.

Some sports bodies have defended gambling sponsorship on the basis that it permits the code to scrutinise bookmaker’s accounts and detect dubious patterns of betting (reflecting some corruptly-obtained inside information) and bets made by prescribed individuals (players, officials, and so on).

Of course, this information could be readily obtained via legislation without entering into a commercial partnership. Indeed, sports could also be provided with a legislatively prescribed share of gambling’s proceeds, without sponsorship or marketing being involved.

At present, sports betting is probably not providing a vast stream of revenue to sporting codes. It’s estimated that commercial “partnerships” between the AFL and gambling operators are worth between $2 and $3 million to the league itself.

Nonetheless, some AFL and NRL clubs promote sports betting heavily, with logos adorning their guernseys, links on their websites to bookies, and frequent and unavoidable advertising on TV, radio and at the grounds.

Victorian AFL clubs alone made $30million from poker machine operations in 2009-10, and changes to the regulatory system in Victoria mean that will grow to more than $63 million by 2012-13.

Sports betting will have to grow significantly to match that. But the impact it may have on the emerging generation of sports fans will be profound.

The benefits are negligible; the costs are likely to be very high.

This is part two of The Conversation’s Gambling in Australia series. Read part one here: Gambling in Australian culture: more than just a day at the races.