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Changes in Wagering Within the Racing Industry

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Changes in Wagering Within the Racing Industry Changes in Wagering Within the Racing Industry FINAL REPORT Commissioned by: The Victorian Gambling Research Panel Prepared by: South Australian Centre for Economic Studies Swinburne Institute for Social Research University of Western Sydney Funded by the Victorian Government through the Community Support Fund May 2005 ISBN 0 9751191 8 4 The Research Team This report was prepared by: Michael O’Neil, Director, South Australian Centre for Economic Studies Steve Whetton, Senior Research Economist, South Australian Centre for Economic Studies Ben Dolman, Research Economist, South Australian Centre for Economic Studies Karin Duerrwald, Research Associate, South Australian Centre for Economic Studies David Hayward, Swinburne Institute for Social Research Richard Woolley, University of Western Sydney Acknowledgements The researchers interviewed many individuals with racing industry knowledge and acknowledge the assistance of the individuals listed in Appendix D ⎯ List of Interviewees and Organisations. We record our thanks to the many bookmakers and ‘racing identities’ ⎯ in the media or close to the track ⎯ who kindly gave of their time. TABCORP (Vic) officials greatly assisted this study ⎯ Mr Michael Piggott and Mr Neale Wheat ⎯ and Ms Fiona Gibson who relayed all our data requests. TABCORP (Vic) readily supplied information and data and kindly made time available to comment and assist on the interpretation of some of the more complex aspects of wagering. We appreciate how generously they gave of their time. Mr Mark Read of Interactive All Sports betting (IASbet) were equally generous, as was Mr Alan Giles of the Victorian branch of the Australian Hotels Association. The Secretariat of the Victorian Gambling Research Panel demonstrated once again their professionalism and commitment to achieving high-quality research outcomes. In particular, we gratefully acknowledge the assistance of Mr Mark Close, Manager, Government Relations with Racing Victoria Ltd, and also the Office of Gambling Regulation and the Department of Justice, Gaming and Racing. Authors Note During the period this report was undertaken, two significant events were unfolding. The first was that TABCORP (Vic) and UniTAB (Qld) were competing to purchase TabLimited (NSW). Ultimately TABCORP (Vic) was the successful party. Throughout the report the NSW TAB entity is referred to separately as TabLimited (NSW). The second event was the announcement by the Minister for Communications that the Commonwealth would not intervene to prohibit betting exchanges operating in Australia. This discussion coincided with the finalisation of this report. We have endeavoured to incorporate responses to this decision; however the full ramifications of the decision and the response of State Governments, of the racing industry, of existing wagering operators have yet to be played out. In reporting some of the responses and updating parts of the text, we have been careful not to speculate about the future. Research Secretariat Telephone: +61 3 9651 4945 Facsimile: +61 3 9651 4900 Office of Gaming and Racing PO Box 18055 Collins Street East Melbourne Vic 8003 Email: [email protected] Website: www.grp.vic.gov.au ii Changes in Wagering Within the Racing Industry Contents The Research Team ..............................................................................................................................................................................ii Acknowledgements................................................................................................................................................................................ii Authors Note ..........................................................................................................................................................................................ii Executive Summary ....................................................................................................................... 7 Wagering and Gambling ............................................................................................................................................................ 7 Understanding Changes in Wagering........................................................................................................................................ 7 Overview of the Racing Industry................................................................................................................................................ 8 Scale and Scope of the Industry................................................................................................................................................ 9 Trends in Wagering.................................................................................................................................................................... 9 Trends in Gambling.................................................................................................................................................................. 10 Trends in the Racing Industry.................................................................................................................................................. 11 Technology, Wagering and the Future ..................................................................................................................................... 12 Future Directions ..................................................................................................................................................................... 12 Conclusions ............................................................................................................................................................................. 13 1. Introduction ........................................................................................................................ 15 1.1 Background, Terms of Reference, Scope and Methodology...................................................................................... 15 Objectives.............................................................................................................................................................................15 Scope....................................................................................................................................................................................15 Methodology.........................................................................................................................................................................16 1.2 A Definition of Wagering............................................................................................................................................. 17 Legal Classifications.............................................................................................................................................................18 Wagering and Mutuality of Risk ...........................................................................................................................................19 The Australian Racing Ministers Conference (May 2001) ..................................................................................................20 1.3 Pure Chance and the ‘Gamblers Fallacy’ .................................................................................................................. 22 1.4 Competition, Efficient Markets, New Products and TABs .......................................................................................... 23 2. Analysis of Gaming and Wagering Trends ..................................................................... 25 2.1 The Racing Industry................................................................................................................................................... 25 2.1.1 Employment in the Racing Industry ............................................................................................................. 29 2.2 Wagering in Australia ................................................................................................................................................. 38 2.3 Recent history of Australia’s gambling industries....................................................................................................... 43 2.4 Have gaming machines and casinos caused the decline in wagering in Victoria?....................................................49 3. Overview of the Racing Industry...................................................................................... 55 3.1 Introduction ................................................................................................................................................................ 55 3.2 An Industry Perspective: Summary of Interviews ...................................................................................................... 55 3.3 Interactive Gaming Act 2001 and the States.............................................................................................................. 62 3.4 Punters, Problem Gamblers and Target Audiences................................................................................................... 64 4. Technology Changes ⎯ Operation and Organisation................................................... 71 4.1 Literature Review on Wagering.................................................................................................................................
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