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Sports betting and wagering
Chapters 10-14 cover issues related sports betting and wagering. They examine the Australian wagering industry, the growth of online wagering and the recent emergence of online corporate bookmakers. As the provision of online wagering services is permitted under the Interactive Gambling Act 2001, this part of the report discusses a number of issues that are currently regulated by states and territories, including the risk of betting on losing outcomes, the practice of credit betting, and the offering of inducements to bet. The risks of match-fixing and corruption in Australian sport as well as exotic betting are also discussed, as are gambling advertising and regulatory responses in relation to sport.
Introduction to sports betting and wagering
This chapter provides an introduction to sports betting and wagering in Australia.
It will cover definitions and types of bets and wagers; the sporting codes and
racing industries involved; the prevalence and recent growth of sports betting,
including the effect of online technologies; and sports wagering providers,
including corporate operators, traditional bookmakers, totalisators and betting
exchanges. It will also discuss how sports betting and wagering is excluded
from the Commonwealth Interactive Gambling Act 2001 (IGA) with the
exception of 'in-play' betting online. The chapter will conclude with a summary
of state and territory regulation of gambling services.
Sports betting, where individuals bet on the outcome of a sporting event
or individual events within the context of a match, has become increasingly
The fast growth in sports betting activity in recent years, combined with the
pervasive advertising of sports betting products and services during sporting
broadcasts, has resulted in what some describe as the 'gamblification' of
It has also raised particular concerns this will contribute to problem gambling.
Sports betting can be defined as:
...the wagering on approved types of local, national or
international sporting activities (other than the established forms of horse
and greyhound racing), whether on or off-course, in person, by telephone, or
via the internet'.
Wagering is a broader term which refers to gambling on the outcome of
sporting, racing or other events, or contingencies within an event.
In the following chapters, the committee uses the general term 'wagering' to
refer to both racing and sporting events. Sports wagering on non-racing events will
be specified as 'sports betting' (as opposed to 'race wagering').
The committee will use the term
'in-play' betting to describe the practice of placing bets after an event has
commenced. The term 'in-play' betting is used by some interchangeably with the
term 'in the run' betting, but 'in the run' usually
refers to racing events.
'In-play' betting can be further divided into:
- bets placed on the outcome of an event (e.g. which team wins or
- betting on 'micro'-events (also known as 'ball-by-ball' betting) on
a discrete contingency within an event after the event has started (e.g.
whether the next serve in a tennis match will be an ace). Betting on such
contingencies is referred to as exotic betting (explained below).
'In-play' betting is discussed further
at the end of this chapter in the context of its regulation under the IGA.
Exotic betting (also known as spot-betting) involves placing wagers on
individual events and contingencies within a particular event or match, such as
the number of goals scored, points won or penalties awarded. These
'micro'-events may pertain to a certain team or to a certain player, or to
certain time periods (e.g. within the first set of a tennis match, or the
fourth over of the first innings in a cricket match). These bets on individual
events within a match may be placed prior to an event online, over the
phone or in person, or during an event by phone or in person (not
online). The existence of such bet types is a relatively recent practice and is
discussed in further detail in chapter 14.
Which sports are involved?
Betting occurs on all of Australia's major national sports: Australian
Football League (AFL), National Rugby League (NRL), rugby union, cricket,
tennis, netball and soccer.
Australians can also place bets on international sporting events. Other sports
including golf, basketball, cycling, motor racing and swimming all attract
sports betting activity.
However, the majority of wagering in Australia is conducted on horse-racing.
Wagering and the Australian racing
The Australian racing industry is treated somewhat differently to other
sports in terms of gambling, as wagering is fundamental to the interest in
For much of Australia's history, wagering on horse, harness
and dog races has been the most popular form of gambling. The three racing
codes, and in particular thoroughbred horseracing, have a cultural significance
to many Australians that exists regardless of any monetary stake they may have.
Nevertheless, wagering underpins most of the interest in racing, which makes
these industries mutually interdependent.
The Australian Racing Board compared race wagering and sports betting:
Sports betting shares some common features with race wagering
in that it is active, participatory, and benefits from prior knowledge.
Probably the key difference is that betting is a secondary reason for people to
follow sports, whereas in racing, wagering is typically the main reason. Also,
many more people believe they have the know-how and insight to the outcome of
sporting fixtures than horse races.
Racing is a 'gambling based activity and is totally reliant on betting
proceeds for its existence'.
State and territory governments administer and regulate the racing industry differently
to other sports through governing bodies in each jurisdiction. Chapter 11 will cover
some of the pressures facing the racing industry in light of the growth in
online wagering, including competitive tensions arising from the increasing
popularity of betting on other sports.
Prevalence of sports betting and race wagering
While expenditure on race wagering has remained stable over the last
twenty years, sports betting has grown rapidly since the mid 1990s.
Betfair's submission notes that 'sports betting is one of the fastest growing
areas of the gambling market and is now estimated to be worth $250 million
annually in Australia'.
Comparing trends in race wagering
and sports betting
While sports betting growth rates are high, the overall share of sports
betting in both the wagering and broader gambling market remains small.
The Productivity Commission's (PC) 2010 report on gambling showed that within
the overall Australian gambling market, the comparative market share for race
wagering was 14 per cent and for sports betting it was one per cent.
The NSW Bookmakers' Co-operative Ltd noted a trend towards declining
participation in betting on races and the increasing popularity of sports
Race wagering participation rates are generally flat and
falling in many instances. On-course racing attendances, which vitally affect
our members' viability, are stagnant. Excluding "once a year" days
and prime carnivals, "normal" meeting attendances are generally in
long term decline.
While off-course race betting expenditure levels remain more
stable, only sports betting has shown any significant growth in participation
rates and consumer expenditure, and this is off very low base levels when
compared with racing and other mainstream forms of gambling.
However, the PC report does not go so far in its assessment of
participation trends in race wagering and sports betting:
During the 2000s, racing has remained a more pervasive form
of wagering than sports betting...Both racing and sports wagering are subject
to several annual special events (such as the Melbourne Cup or football grand
finals), and therefore attract irregular or occasional gamblers. Participation
in race wagering appears to have fallen marginally. Participation rates for
sports wagering have been up in some jurisdictions and down in others.
The PC also noted significant increases in sports betting expenditure
over the past two decades; however, total expenditure remains low in comparison
with wagering on racing events ($171 million for sports betting versus $2.37
billion for race wagering in 2006-07).
More recent figures show that around $205 million was spent by gamblers
on sports betting in 2007–08.
Roy Morgan research estimates that for the 12 months to September 2011,
Australians spent $2.6 billion betting on races, down from $2.7 billion in
2002. Sports betting expenditure increased from $0.4 billion to $0.8 billion
over the same period.
According to media reports of IBISWorld's assessment of the industry,
sports betting expenditure has grown by an average of 12 per cent a year over the
past five years, compared to 1.2 per cent on poker machine spending and 0.5 per
cent growth on betting on horse-racing.
The growth of online wagering
Many submitters to the inquiry commented on the recent growth of sports
betting and wagering and the influence of new online technologies on this
growth. However, the extent to which the availability of online platforms (i.e.
internet, smart phone technology) has driven growth in sports betting cannot at
this stage be measured clearly.
In terms of expenditure, Dr Sally Gainsbury and Professor Alex
Blaszczynski cited a Global Betting and Gaming Consultants estimate that
Australians will spend $611 million on online sports betting in 2011,
representing a 230 per cent increase from 2006.
By 2016-17, online wagering is expected to be worth $10.6 billion or
38 per cent of the gambling industry.
The Australian Racing Board's submission also highlighted recent growth
in internet betting for sports and race wagering:
While phone betting is still twice the volume of internet
betting, growth in the latter is strong. In 2006/07, betting via the internet
accounted for 10 per cent of wagering on thoroughbred racing through all
Australian TABs, a three-fold increase over five years. The internet is much
more important for sports betting than race wagering, and for corporate
bookmakers and Betfair than the TABs, so the total amount of internet wagering
overall figure is probably several percentage points higher, in the order of 13
per cent, excluding online wagering on offshore sites.
According to Tabcorp, the internet has allowed wagering providers to
expand their market at low cost and to become 'very competitive':
Corporate bookmakers have established their online businesses
in jurisdictions that charge little or no wagering tax and racing industry
fees, and have regulatory structures that allow them to offer products and
services not permitted in other jurisdictions.
Tabcorp's submission included the following graph, showing the company's
internet wagering turnover as a percentage of total turnover over the last
In its first quarter report for 2010–11, Tabcorp reported that its
online betting turnover was up by 18 per cent, from $424 million to $508
million over the past year to the end of September 2011.
Appearing on SBS TV's Insight program in September 2011, Neil
Evans of Centrebet stated that online operations constituted the majority share
of Centrebet's business and spoke about its growth:
Online is 90–95 per cent – it is virtually the entire
operation...The growth is big and that's come about because I think in the
world today the idea of taking fixed odds and having an account or multiple
accounts is very attractive for punters.
The markets are there now for everyone. No one can say
anymore, "I'm quite fascinated by betting but I don't bet because there is
nothing in the area I like or know something about." Now there is a market
for everyone...[I]t is a very rock solid growth industry, particularly in a
[T]his financial year...I think we've got about 12,000,
13,000 new registrations in two and a half months of which 9,000 to 10,000 are
Reasons for the growth of online
While it is difficult to identify the causes of the recent growth in
sports betting, Frontier Economics suggested that:
While the data on real expenditure can establish that the
market for wagering has grown, they are not sufficient to establish on their
own what the causes are...
Consequently, while it is true that [online] operators such
as Sportsbet have increased their share of the market, it would be incorrect to
infer that they they have driven an increase in wagering overall. Rather the
flat per capita expenditure on wagering suggest[s] that the growth of corporate
bookmakers has been driven by substitution away from traditional wagering
Betchoice also acknowledged that it was difficult to quantify or
determine the factors which may be responsible for the growth in online
The most obvious explanation seems the most likely, namely
that the growth is simply a function of the relatively recent liberalisation of
the activity. A similar growth curve is evident with other forms of gambling
In the case of Betchoice, we believe our growth has also been
due to the fact that we are able to offer customers a more customised service
than the “one size fits all” approach of traditional wagering outlets.
Betchoice customers have greater control over which events they wish to bet on
and are able to follow the events that interest them rather than those that are
simply the most popular. This flexibility is a function of the versatility
afforded by the technology underpinning our wagering systems and the more
liberal licensing regime in the Northern Territory.
The main drivers of the growth in online betting were identified by the
Australian Racing Board as follows:
relative novelty, though obviously private betting on sports events is
long-standing. Its growth is closely linked to the growth in sports coverage on
fastest-growing segment of the population, Generation Y, is keenest on sports
betting. The average age of sports bettors is about ten years younger than that
for race wagerers.
range of sports events is extremely broad and international. The past decade
has seen the commercialisation of many sports codes and a rapid growth in the
number of matches played or events staged.
proliferation of sports betting sites which are often treated more leniently by
regulators than online gaming (mainly casino games).
The NSW Bookmakers' Co-operative Ltd pointed to a substitution effect
from traditional betting to online formats:
It is reasonable to attribute a significant proportion of
this growth to transfers of traditional telephone and 'retail' forms of
betting. In other words, many consumers have found that interactive channels of
betting are more convenient and 'informative' [than] the traditional means.
Advertising was singled out among submitters as a crucial factor in the
growth of online sports betting and is covered as a separate topic in chapter 12.
A national wagering market
As a result of the development of online technologies, some submitters
argued that a 'national wagering market' has evolved. Tabcorp outlined the
history and development of the new online industry and illustrated how the
'borderless nature of the internet' has affected the market as well as consumer
Historically the industry has consisted of:
- State/territory-based totalisators, offering wagering services
on-course, in retail shops, over the telephone and, more recently, over the
- Bookmakers, offering fixed odds wagering services on-course and
more recently, over the telephone and internet.
Punters in a particular state or territory have traditionally
bet with their home state's totalisator which, in turn, made significant
returns to the local racing industry. Although bookmakers make a small
contribution to racing industry funding, between 70% and 90% of the racing
industry's funding comes from TAB operations, depending on the state or
The borderless nature of the internet now means that whereas
wagering has previously operated as a series of state-based markets, it has
evolved to become a national market. For example, a Victorian punter can now
bet with a Northern Territory bookmaker on a South Australian race or sporting
Tabcorp also pointed out that the online platform has made wagering much
more accessible across Australia:
Australian wagering customers have traditionally bet in
retail betting shops, on-course or over the telephone. The growth of the
internet has changed this with some account customers preferring to transact
with wagering operators online...
The borderless nature and immediacy of the internet means
that Australians can now place bets with wagering operators not licensed in
their home state much more readily than before. For example, Victorian and NSW
residents can now easily locate and place bets with interstate corporate
bookmakers and betting exchanges, or with international operators established
to target customers in Australia. These operators are not precluded from
accepting such bets. The immediate nature of the internet has enabled customers
to compare products offered by wagering operators and choose the product that
best appeals to them.
Advantages of online betting
The attraction and benefits of online betting were described by a number
of submitters. The NSW Bookmakers' Co-operative Ltd outlined the advantages
that the online format had brought to the industry and the flow-on benefits for
consumers, such as increased convenience:
From a racing and wagering industry perspective, internet
betting is a vital business tool for many Australian on-course bookmakers and
wagering operators in general. It has enabled the industry to maintain consumer
interest at a time when competition for the gambling dollar has been high and
in an era where race wagering has consistently lost market share to other
forms, especially gaming machines.
Put simply, the consumers of race and sports wagering
services highly value the benefits and convenience that the internet has
provided. They [have] progressively shifted their access methodology from
traditional "face to face" and telephone forms of betting, to the
internet and other newer communications technologies...
To summarise, the internet and similar telecommunications
technologies are keeping the wagering market share in the broader gambling
industry afloat. These technologies are vitally important to the consumers of
betting services, the providers of these commercial activities (including
bookmakers) and the Australian Racing Industry which relies heavily on the
resultant revenues for its viability and growth.
A range of other advantages for both providers and consumers were
nominated by the Australian Racing Board:
- Bookmakers can now locate in low cost, low regulation jurisdictions,
remote from customers;
- New wagering operating models are possible such as betting
- Information on, and coverage of, racing and sports events is
packaged with interactive wagering (though pay-TV probably plays a bigger role
- Uncertainty exists about the scope and extent of any intellectual
property rights which may affect gambling activities; and
- Comparing odds among TABs/bookmakers is much easier for bettors,
with dedicated websites that identify the best odds on each race.
While such advantages were readily acknowledged, traditional bookmakers
and the racing industry also expressed concern to the committee about the
growing influence of online corporate bookmakers and the regulatory frameworks
under which they currently operate. These concerns are discussed in more detail
in the next chapter.
Wagering services on racing and sports are provided by on-course
bookmakers, corporate bookmakers, totalisator agency boards (TABs), totalisators
and betting exchanges.
The types of wagering providers that operate in Australia have been
summarised by the PC as follows:
- on-course bookmakers, individuals who are licensed by states and
territories to operate at racing venues. They offer fixed odds, usually provide
simpler wagering products such as 'win' and 'place' bets, and can operate
face-to-face and over the phone and internet;
- corporate bookmakers, which provide services over the phone and
internet. They tend to have fewer restrictions than on-course bookmakers (e.g.
24 hour service) and offer a wider range of betting products. The major
corporate bookmakers operating in Australia are: Sportsbet, Betchoice, Betezy,
Betstar, Centrebet, Centreracing, Luxbet, Overtheodds and Sportingbet Australia;
- totalisators, which are operated by TABs and do not offer fixed
odds bets. All bets are pooled, with the winning bets sharing the pool (minus a
percentage taken by the operator). The final dividend is continuously updated
prior to a race;
- TABs, which refer to state and territory bodies exclusively
licensed to operate totalisators. They also offer off-course retail wagering
services, as well as on-course phone and internet wagering services. Modern
TABs provide a range of other wagering products (e.g. most TABs offer sports betting
and Tabcorp in the Northern Territory also owns Luxbet); and
- betting exchanges, similar to a stock exchange, where wagers can
be traded at different prices and quantities.
The following table
from the PC report illustrates the type of wagering services offered by online
The effects of different regulatory and licensing regimes across states
and territories on the growth of corporate bookmakers are illustrated in the
table below, also from the PC report.
A number of wagering providers made submissions to the committee's
Sportsbet and Betfair also appeared to give evidence before the committee. An
outline of these companies' business operations is set out below.
Sportsbet told the committee that it is Australia's largest corporate
bookmaker, with over 200,000 active customers in the last financial year. It
estimates that it holds 20 per cent of the Australian online wagering market:
sportsbet.com.au is one of Australia's leading internet
betting and entertainment websites, which is fully owned by Irish listed
company Paddy Power. Paddy Power is headquartered in Dublin and is listed on
the Dublin and London stock exchanges. It has a market capitalisation of over
A$2 billion and has over 2,500 employees...
Sportsbet is licensed as a bookmaker in the Northern
Territory and is regulated by the Northern Territory Racing Commission.
Sportsbet is a globally competitive e-commerce business which provides high
value, high tech jobs for Australians. Sportsbet employs more than 250 people,
with 200 people based in Melbourne and an additional 50 in Darwin.
With the privatisation of TABs over the last 15 years (except in Western
Australia, Tasmania and the ACT), Tabcorp has emerged as one of Australia's
leading wagering operators (while also managing keno and venue-based gaming
interests). Tabcorp manages the TABs in both Victoria and New South Wales
through a network of 2,750 agencies and licensed venues. It also owns TAB
Sportsbet, which provides fixed odds betting on racing and sports, as well as
Luxbet, a national online racing and sports bookmaker licensed in the Northern
It employs more than 3,000 people in Australia and serves millions of customers
In July 2011, Tabcorp signed a $410 million exclusive wagering licence
with the state of Victoria which will take effect from August 2012. Under this
deal, the Victorian racing industry will receive half of Tabcorp's Victorian
TAB profits instead of a quarter (amounting to at least $1 billion between
August 2012 and June 2015).
Betting exchanges are similar to the stock market in that 'outcomes' can
be traded during the course of an event (i.e. customers can back one outcome or
'buy' at a high price and then sell or 'lay' it at a lower price):
A punter places a lay bet when he or she thinks the odds are
too short – it's the same as an investor selling shares when he or she thinks
the price has peaked.
Tabcorp's submission provided an overview of betting exchanges, noting
that Betfair is Australia's only licensed betting exchange:
Betting exchanges are a relatively new form of wagering,
allowing customers to bet against each other on a variety of events at mutually
Betting exchanges were introduced in Great Britain in 2000.
In January 2006 the Tasmanian Government licensed the conduct and operation of
Betting Exchanges in Tasmania under the Gambling Control Act (TAS) 1993...
The Tasmanian-licensed betting exchange, Betfair, now matches
bets on racing and sporting events in all Australian jurisdictions and across
Giving evidence to the inquiry, Betfair alluded to the 'degree of
controversy' that had accompanied its entry into the Australian marketplace in
2006. Mr Andrew Twaits, Betfair's Chief Executive Officer, remarked that this
...predominantly driven by fears about the impact that our
entry would have on the TAB operations and revenue flowing to the racing
industry. Without putting words in the mouth of the racing industry, I think
that most of those fears have been allayed. We have now been in operation in
Australia for over five years and we are making contributions right around the
country to the racing industry and to the sports industry, and we initiated
those contributions. We are seeing that consumer preferences are changing.
There has definitely been an increase in the willingness of consumers to
transact online. And that is not just a phenomenon in wagering; you are seeing
that in retail and other forms of purchasing products and services. We are also
seeing a shift in the younger customer demographic to interest in betting on
sports rather than racing.
Betfair told the committee that its betting exchange service was similar
to 'eBay for wagering'
and provided further detail in its submission:
Betfair...provides products through a betting exchange
platform, where punters effectively bet against one another, in a similar way to
buying and selling on the stock exchange. Technically, Betfair operates in a
similar way to a bookmaker – accepting bets from customers, but only doing so
where it is immediately and fully able to offset the risk of those bets from
Using sophisticated technology, Betfair administers markets
where punters effectively bet against each other. For each transaction one
punter is required to 'back' a result and another is required to oppose that
outcome by placing a 'lay' bet. Punters are not aware of the identity of their
opponents, but Betfair and its regulators have capacity to view the
transactions of every customer. Betfair's revenue is generated by a commission
that is generally between two and five per cent of a punter's net winnings on a
Further discussion of the concept and merits of betting on losing
outcomes is contained in the next chapter.
Sports betting and problem gambling
Data from counselling services that treat problem gamblers shows that,
nationally, the percentage of problem gamblers reporting harms associated with
sports betting is around seven per cent. Western Australia has the highest
percentage of problem gamblers who report harms associated with sports betting
(20 per cent), while Tasmania reports the lowest percentage (five per cent).
This suggests that a small but notable proportion of gamblers experience harms
from sports betting.
Researchers from the University of Sydney Gambling Treatment Clinic (the
Clinic) drew attention to the increasing number of clients presenting to the Clinic
with problematic sports betting:
Indeed, from representing less than 5% of our clients in the
2006-07 financial years, problem gamblers with sports betting problems now
represent 15-20% of new clients in the current financial year. Thus, whilst
still representing a minority, reported problems with sports betting are
rising, and rising rapidly.
Illustrating that the problems appear to be exacerbated by the online
format of sports betting services, the Clinic stated that:
...the majority of clients report accessing online betting
sites from their home or work computers, on their phones, or through
university/educational facilities or other public computers. Many clients
report gambling sessions that last for long hours as they bet on a range of
sports and events. As they are able to bet freely on events from anywhere in
the world, they often spend many hours betting on things such as Australian
sports during daylight hours and sports in U.S.A. or in Europe through the night.
The Clinic also reported that the amounts wagered by clients fluctuated
markedly and depended on a number of factors including:
...funds available, confidence in the bet and the extent of
recent wins and losses. In contrast to most other gambling clients however,
including those players who gamble excessively on Electronic Gaming Machines,
online sports betting clients do not typically report that the extent of their
betting or gambling sessions depends on the time that they have available.
Instead, they report that the accessibility of online betting enables them to
attend work, spend time at home and socialise. They do, however, typically
report that dividing their attention between these tasks and monitoring
gambling sites greatly detracts from their productivity and quality of life.
At a public hearing, Mr Christopher Hunt of the Clinic also described
the 'human face' of these addictions to sports betting:
It is not unusual for people even in their late 30s to
already be in debt for up to hundreds of thousands of dollars. Then they start
to feel low self-worth, they can be quite depressed, they get quite anxious
about where their money is coming from. Sometimes if they are gambling at work
that can lead to difficulties with their productivity at work, and that can
lead to being reprimanded, sanctioned or potentially even terminated at work.
Frequently that also [leads] to suicidal thoughts in a significant proportion
of our clients.
We also find that the impact on family can be just as great.
We do counsel family members of gamblers as well and what we find is that they
are often having to do without, from minor things like not being able to go on
holidays as much to quite major things like not being able to feed children to
the extent that they would normally or not being able to buy new clothes for
children or to do renovations on their home. Particularly for spouses of
problem gamblers that can lead to a lot of frustration, a lot of depression and
anxiety as well, and a lot of hopelessness. So the impacts are diverse and can
be quite severe.
The Clinic also noted that the pervasive promotion of sports betting
contributed significantly to their clients' problems and relapses. The impact
of sports betting advertising on problem gambling behaviours will be addressed
separately in chapter 12.
The committee notes with concern the risks and consequences of excessive
sports betting that the University of Sydney Gambling Treatment Clinic
described. It also appears that advertising is a significant factor for
individuals who are at risk or who already have a problem. The committee
acknowledges that further research into the risks and harms associated with
online sports betting is necessary to develop appropriate harm minimisation
Sports betting and the Interactive Gambling Act
As mentioned in chapter six and earlier in this chapter, while the IGA prohibits
the supply of interactive gambling services to customers in Australia, online
wagering on racing or sporting events is excluded or allowed, with the
exception of two forms of 'in-play' betting in the online format:
- betting on the outcome of an event; i.e. betting online on
the outcome of an event, after the event has started, is prohibited (except for
racing events) but customers can still use the TAB or phone for such bets; and
- 'ball-by-ball' wagering (e.g. who will score the first try) in
the online format (again, such betting 'in-play' is permitted over the phone or
During the inquiry, betting agencies unsurprisingly argued that the
wagering exemptions in the IGA should continue. The argument was made that online
wagering is different from forms of gambling that rely on random events or are
pure games of chance. For example, Tabcorp argued that the exclusion of online
wagering services from the IGA should be retained because of this fundamental
TABs take wagers on real events such as horse races or
football games, that take place elsewhere and are not controlled by the
gambling operator, as opposed to computer generated random results produced by
interactive gaming operators.
Wagering through the internet is merely an alternative method
of transmitting bets to the TAB and is equivalent to existing telephone
services that the TAB has been operating for many years.
Prohibition of 'in-play' betting
When the IGA was enacted, 'in-play' betting over the internet was
considered to be a riskier form of gambling than conducting 'in-play' betting
over the telephone or in person. According to the Department of Broadband,
Communications and the Digital Economy's (DBCDE) 2011 discussion paper on the
Review of the IGA, the IGA currently prohibits 'in-play' wagering in an online format
...reflect the view that such 'continuous' services could
become highly addictive for consumers and are likely to be easily accessible
(for example, through interactive television using a remote control).
The exemption of wagering from the IGA and the prohibition of 'in-play' online
betting are discussed further in the following chapter, which covers a number
of key issues in relation to wagering and sports betting.
State and territory regulation
States and territories regulate gambling providers offering services
that are not restricted by the IGA, i.e. those which can be licensed and
offered in Australia. Mr Richard Windeyer, First Assistant Secretary of the Digital
Economy Strategy Division, DBCDE, clarified the distinction between the work of
the Commonwealth and the states and territories in the online environment:
One of the points to keep in mind is that in a sense by
definition the state based authorities are in the business of regulating
providers offering services that they can offer in Australia. The Commonwealth
authorities are by and large in the business of looking at and investigating
complaints about providers who are offering services that are not able to be
licensed and offered in Australia. So, to some extent we are looking at
different bits of the environment.
Submissions on the inquiry's terms of reference were invited from all
jurisdictions. However, the committee only received responses from the Tasmanian,
New South Wales and Queensland Governments, the Western Australian Department
of Racing, Gaming and Liquor, and the Northern Territory Racing Commission. During
the inquiry the committee wrote to all regulators to request information. The
information below is drawn from submissions, correspondence and other available
The committee was advised that Tasmania has established a strong
framework to regulate gambling and this includes online gaming and wagering:
The regulation of online gaming and wagering has been in
place since 1999 and currently Tasmania has two wagering operators licensed
under this framework (TOTE Tasmania Pty Ltd (the TOTE) and Betfair Pty Ltd).
Other than on-course bookmakers,
all gaming and wagering licence holders within Tasmania are regulated under the
Gaming Control Act 1993 and the TT-Line Gaming Act 1993.
The Tasmanian Gaming Commission (TGC), an independent body established under
the Act, is responsible for the regulation of gaming and wagering.
All gambling that takes place in Tasmania or from Tasmania requires the
operators to hold an appropriate licence or permit. The Gaming Control Act was
amended in 1999 to extend the regulatory framework to include gaming activities
conducted via the internet, by telephone and by any other means of
telecommunications. Providers can apply to the TGC for a Tasmanian Gaming
Licence but they must meet the required regulatory, financial and probity
standards. In January 2008, the UK Government 'recognised Tasmania's strong
regulatory framework by granting Tasmania a 'white listing'...'to enable
gambling operators, licensed in Tasmania to advertise their services in the
The regulatory controls governing interactive gambling provide for a
number of player protection measures which include:
- the ability for players to impose limits on the amount they can
gamble and exclude themselves from participating in gambling activities;
- a prohibition on the provision of credit by a licensed provider;
a complaints mechanism.
New South Wales
The principal pieces of NSW legislation covering gambling are: the Unlawful
Gambling Act 1998; the Racing Administration Act 1998; the Totalizator
Act 1997; and racing controlling body legislation. NSW legislation is
complemented by the IGA 'which includes a 'carve out' in section 8A of the Act
that results in the NSW laws not being in conflict with the Act'. The NSW
government supports the continuation of this exclusion in relation to
traditional wagering and also lotteries.
The submission acknowledged that wagering laws across jurisdictions are
fragmented, but cautions that a national approach should not adopt the lowest
common denominator which would lower wagering regulation standards across
Australia. Another example of fragmentation is the race fields fees scheme, which
governs the payment of fees by wagering operators that allow bets on Australian
racing events. Each jurisdiction has its own regulatory framework and fee
Although this particular issue is not specified in the terms of reference, it
was raised with the committee and is described in more detail in chapter 11.
The Queensland Interactive Gambling Act is supported by the Interactive
Gambling (Player Protection) Regulation 1998. The Act 'applies to prohibit a
person from conducting an interactive game in Queensland or allowing a
Queensland person to participate in an interactive game, unless the person holds
an interactive gambling licence'. The Act:
...incorporates best practice harm minimisation and consumer
protection measures that are reflective of the risk posed by internet gambling
(such as the requirement to provide limit setting facilities (i.e.
pre-commitment)). The Act also provides a regulatory framework that seeks to
ensure the probity of licensed interactive gambling providers and the ongoing
audit of their activities as well as a legislative complaints process.
With the introduction of the IGA, no interactive gambling licences have
been issued in Queensland. Prior to the IGA, Queensland had one licensee which
surrendered its licence when the IGA came into effect.
TattsBet Ltd holds a sports wagering licence issued under the Queensland
Wagering Act. The legislation does not prevent TattsBet from accepting wagers
on certain bet types for sporting events. TattsBet may also offer wagering
events or contingencies not related to sports or racing; for example, political
elections or interest rate changes. However, this requires approval of the
minister. To date, TattsBet has only received approval to conduct wagering on
the Academy Awards.
Interactive gaming in Victoria is regulated under the provisions of
Chapter 7 of the Gambling Regulation Act 2003. To date no licence has
been issued under Chapter 7 of the Act.
Australian Capital Territory
The ACT Gambling and Racing Commission advised that sports bookmakers
and their agents are licensed under the Race and Sports Bookmaking Act 2001.
The South Australian Office of the Liquor and Gambling Commissioner
Under the Authorised Betting Operations Act 2000 (SA) (the
ABOA) an interstate betting operator who is lawfully permitted to conduct
betting operations (under a licence or other authorisation) in another State or
Territory of Australia can become authorised to engage in betting by telephone,
internet or other electronic means with South Australians. This authorisation
is given by the Independent Gambling Authority (SA) (the IGA).
Although the committee did not receive a submission from the Northern
Territory Government, it did receive a submission from the Northern Territory
Racing Commission (NTRC) which is responsible for the racing industry.
Sports bookmakers are licensed pursuant to section 90 of the Racing and Betting
The Northern Territory is where Australia's largest online corporate bookmakers
are licensed and it is important to understand what attracts them to be
licensed in that jursidiction. For example, Tabcorp pointed out:
Corporate bookmakers have established their online businesses
in jurisdictions that charge little or no wagering tax and racing industry
fees, and have regulatory structures that allow them to offer products and
services not permitted in other jurisdictions. The Northern Territory is one
example of a jurisdiction with a flexible regulatory structure. Such an
environment enables corporate bookmakers to:
- Offer better prices to customers
because of the relatively low tax and racing industry contributions required;
- Offer a broader product suite to
customers, including the ability to bet on
novelty events and to extend credit to their customers.
This “arbitrage” of taxes, product fees and regulation has
fuelled growth in the corporate bookmaking market...
The figure below shows the growth in Northern Territory corporate
bookmaker turnover over the past decade.
The 2008 Social and Economic Impact Study into Gambling in Tasmania
noted the effect of the regulatory regime in the Northern Territory:
A significant proportion of the nation’s sports betting
expenditure is actually channelled through the Northern Territory. This outcome
has been brought about by the Northern Territor[y's] relatively liberal
attitude towards sports betting, which has encouraged the development of a
significant local sports betting industry that services the nation. For instance,
the Northern Territory approved Australia’s first sports bookmaker—Centrebet—in
December 1992, which went on to launch the nation’s first internet based wagering
service in August 1996. As a consequence of interstate gambling "exports",
average expenditure on sporting betting is relatively high in the Northern
Territory with the Territory accounting for 25 per cent of national sports
betting expenditure in 2005/06, which is well above its share of the national
adult population (0.9 per cent).
The NTRC advised that:
From 1 January 2010, the Government replaced the Northern
Territory's current bookmaker turnover tax with a tax based on gross wagering
profits. The Government has capped the tax each Corporate Bookmaker has to pay
to a maximum of $250,000 which is subject to annual indexation based on the
Darwin consumer price index.
The NTRC also explained that each sports bookmaker must:
a) comply with the mandatory
Code of Practice for Responsible Gambling;
b) have established account opening
procedures and steps to ensure accounts cannot be opened by under aged
c) ensure all senior
personnel, directors and major shareholders have undergone police checks and
have not been found guilty of any offence in the last 10 years;
d) must have systems in place to
properly record bets and monitor all betting patterns;
e) report unusual and/or
suspicious betting patterns and circumstances to AUSTRAC.
A number of issues were raised in relation to sports betting and
wagering which highlight the lack of regulatory consistency between
jurisdictions. These are detailed in chapters 11 and 12.
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