The value of bets taken by Australian sports gambling companies each year has passed $50 billion, as new figures show the migration of gamblers to digital platforms during the pandemic is here to stay.
The $50 billion milestone comes at a time when politicians are reviewing the operation of the industry, including the possibility of an increase in fines for companies found to have breached the industry code.
Three breaches by News Corp-backed startup Betr within its first week of taking bets last year have cost the company $75,000.
Given the company's multi-million-dollar advertising outlay to mark its launch, and initial funding from a group of investors including successful wagering entrepreneur Matthew Tripp, the fines represent a small proportion of the company's costs.
Betr is also in discussions to purchase the Australian operations of rival PointsBet in a deal reportedly worth more than $200 million.
Alastair Shields, chair of the Northern Territory Racing Commission, has told a House of Representatives inquiry into online gambling that an increase in fines is currently being considered as part of reform of the Northern Territory's Racing and Betting Act.
"It is anticipated that new legislation, incorporating increased regulatory powers for the Commission (such as the capacity to enter into enforceable undertakings and issue larger fines) will be introduced into the Legislative Assembly during this term of Government," he wrote in a submission published this week.
The Northern Territory is the preferred jurisdiction for the bulk of the racing and sports betting sector, as it offers relatively low taxes and a supposedly responsive regulator that supports industry innovation.
In exchange, the betting companies base their call centres in the Territory and make community contributions. A mobile laundry van dubbed "Betsy" was launched in Darwin by charity Orange Sky in 2018 thanks to $60,000 in annual funding from SportsBet.
The reform process for the Northern Territory's act has been underway for five years.
As part of the consultation process, betting companies threatened to leave the Top End if taxes were increased.
The $50 billion figure for industry turnover is equivalent to $2,500 being gambled every year by every adult in the country.
The total covers all bets taken by the 32 sports bookmakers and two betting exchanges licensed in the NT including industry giants SportsBet, Bet365 and Entain. It covers betting on racing and sporting codes, across telephone and online, but does not include expenditure on poker machines.
Tabcorp is the major industry member not licensed in the NT. Individual bookies and smaller companies represent the bulk of those accredited in other states.
Shift to digital
The latest financial results for ASX-listed Tabcorp — which is licensed through each state jurisdiction separately due to its traditional retail offering — have revealed the shift towards digital betting appears to be here to stay.
Tabcorp's overall wagering turnover between July and December increased compared to the equivalent period last year thanks to an increase in non-digital activity.
The online component of its wagering turnover dropped fractionally by 6 per cent compared to the previous year.
But at $4.9 billion, it is almost at the same level as the equivalent period in 2020 when the pandemic drove people online, and well above the $3.4 billion figure in the second half of 2019.
A report from IBISWorld last year predicted industry revenue would grow 3.2 per cent per year over the next five years due to growing use of online betting platforms.
Tabcorp claims it currently holds a quarter of the digital betting market and wants to increase its share to 30 per cent by 2025.
Federal inquiry
Mr Shields from the NT Racing Commission will appear next week at a hearing of the House of Representatives inquiry.
His submission noted a new NT industry code would be launched in the first half of this year and he flagged more "modern" Territory legislation was a priority.
In contrast, Tabcorp's submission called for all regulation to be managed at the federal level, saying "only a single national betting regulator could enable all states and territories to act in harmony to bring their regulations into line with the modern economy".
Such a move would challenge the Northern Territory's status as the traditional home of sports betting in Australia, which can be traced back to the emergence of CentreBet in the early 1990s.
Inquiry chair Peta Murphy, a Labor MP from south-eastern Melbourne, said the committee was still hearing evidence but the regulatory landscape did need streamlining.
"Both gambling harm reduction advocates and sports betting companies have told us that it is a too-complicated web of regulations and that we should be looking at how to simplify it or merge it," she said.
She said the inquiry's broad scope — which also includes harm reduction, advertising and even so-called loot boxes in video games — is in response to community feedback about the pervasiveness of sports betting and online gambling.
"We as a committee have heard your concerns, and that's why we're looking at it," she said.
"Tobacco and sports betting are very different products, but when there were moves to ban advertising and sponsorship for tobacco products, there were also suggestions the sky would fall in for sport. But it happened and the sky is still up there."
A submission from the Coalition of Major Professional and Participation Sports, whose membership includes the AFL and NRL, called for no changes to current laws.
