Ad clampdown to cool Australia’s sports betting growth?

Published in: Latest Intelligence Sports betting in Australia has seen explosive growth in recent years, fuelled by a relaxation in advertising rules. But the industry may yet become a victim of its own success, with mounting calls for the level of ads to be scaled back amid concerns about the social impact.
Gambling regulation has remained a hot-button issue in Australia, with the new government headed by Tony Abbott recently overturning efforts by his predecessor Julia Gillard to target problem gambling in the nation’s pokies industry. His stance towards sports betting, the fastest growing area of the market remains to be seen.
Horse racing still commands the lion’s share of the Australian market, but sports betting has been eating into it. Australian Wagering Council figures illustrate the shift, showing 2012/13 Total Racing with 83.7 percent share of gambling turnover and Sports Betting at 16.29 percent. That compares with the almost monopoly position of Total Racing just six years ago of 98.14 percent, compared with just 1.86 percent on Sports Betting.
Malcolm Richardson, Deputy Director of Gambling and Licensing services in the Northern Territory in Australia, says gambling turnover from racing and sport has grown from AU$220 million ($199.3 million) in 1996 to $7 billion now, with the lifting of ad restrictions spurring growth.
“Northern Territory licensed sports bookmakers were prohibited from advertising in several Australian jurisdictions, particularly New South Wales and Victoria. Once these ‘prohibitions’ were challenged and removed, the bookmakers undertook expensive and concerted advertising campaigns which proved successful,” he said.
Growth in the market has also attracted a flood of foreign investment, with some estimates saying foreigners now account for about half of the Australian bookmaking market.
Earlier this year Ladbrokes, announced that it had purchased Gaming Investments, an Australian betting operator that owns bookmaker.com.au. At the same time, www.ladbrokes.au was launched.
Ladbrokes paid AU$22.5 million for Gaming Investments. This acquisition follows William Hill's $40 million acquisition of the Tom Waterhouse online betting business in August. In March this year, William Hill completed its AU$660 million acquisition of Sportingbet, which had itself purchased recently the Centrebet business. While Irish firm Paddy Power owns Sportsbet and IASbet.
A general move to online gaming has also helped boost the trend, again helped by a flood of advertising cash.
Jamie Nettleton, a partner at Addison’s law firm in Australia said: “Mobile betting has come from nowhere. Those devices (tablets and PDAs) just did not exist three or four years ago.”
The mobile telephony space now attracts the mobile savvy younger generation – and most bookmakers have developed user friendly ‘apps’ for all forms of the new technology, Richardson added.
However, this growth is now sparking concern. Sports betting agencies spent almost $50 million on TV, radio and print advertising over the past year, a record amount, according to Nielsen data. That outstripped spending by some of the nation’s biggest advertisers, including National Australia Bank.
On average, Australians are exposed to over 25,000,000 internet gambling ads per week, according to figures on the Victorian Responsible Gaming Foundation website. And what’s of most concern is the demographic these ads are reaching, hitting the eyeballs of young, mostly male sports fans. The average young football fan is exposed to over 300 seconds of sports betting advertising per week, the foundation says.
As a result, the regulations are tightening again.
South Australia moved to ban live odds betting in July and will require tobacco-style warnings on gambling ads. The Australian Communications and Media Authority, the country’s broadcast regulator, followed suit in August, adopting five new codes of practice.
The change means there are now bans on promoting betting odds during play, and for half an hour before and after the game. Representatives of gambling companies will also have to be clearly identified, rather than appear as part of the broadcast team. Gambling ads will be restricted to before or after play, or during breaks.
Online wagering needs to be distinguished from online gambling in Australia, which is still illegal and offshore.
The AWC told AG Brief that offshore wagering turnover has dropped from 37.7 percent in 2003 to 13.8 percent in 2011, since licensed providers in Australia have been given more leeway to operate.
“Having this turnover onshore not only provides significant benefits to consumers in terms of customer protection and harm minimisation measures but is also critical to maintaining the integrity of racing and sports in Australia,” the AWC said.
However all forms of wagering, online or not, still form a small fraction of gambling in Australia. People still vastly prefer to use pokies, followed by casinos. According to the Australian Productivity Commission’s Report on Gambling 2010, sports betting in 2008 - 2009 was only 1.2 percent of the AU$19 billion total spent on gambling. In comparison, pokies represent 55 percent.
Interestingly it is often rugby clubs in New South Wales where pokies are most common.
 

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