Victorian Government Considers Australian Sports Bodies' Campaign for a Cut of Betting Revenues

16 June 2006

A coalition of major sports organizations in Australia wants a cut of revenue wagered on their respective sporting events, and it looks as though the support of the Victorian government and most of the rest of the country's sports bodies may help them get their way.

In November 2003, seven sports organizations (Cricket Australia, the Australian Rugby Union, the National Rugby League, Football Federation Australia, Tennis Australia and the PGA Tour of Australasia) assembled to discuss sports betting in Australia. Over the following 18 months, the groups formed an alliance called the Coalition of Major Professional Sports (COMPS) and set out to lobby the government for better regulation of sports betting.

Members of COMPS were concerned that they had no input on who can conduct betting activity on their respective sporting events and complained that they received no share of the A$1.6 billion (US$1.2 billion) generated each year by sports betting in the country. They brought these concerns to the Victorian Government.

COMPS' main objectives are to ensure that all sports receive a fair share of the revenue wagered on their respective events and to implement a more effective regulatory regime for sports betting in Australia.

Victoria has no law requiring bookmakers to be authorized by the controlling bodies of sport or to return any revenue from the betting that takes place on sporting competitions to the sporting organizations. So in October 2005, COMPS sent a letter to the Victorian Government asking for support for better protection for major sports in relation to sports betting.

In response to COMPS's plea, Victoria's minister for gaming, John Pandazopoulos, in March 2006 released a discussion paper on sports betting titled "Sports betting: a new regulatory framework?" that sought comments from sports betting providers and key sporting and racing organizations.

The paper was intended to open a dialogue about how the industry can be better regulated to authorize controlling bodies to determine which aspects of their competitions can be used for betting purposes, to ensure the integrity of the sporting events on which betting takes place and to return a proportion of revenue from all sports betting to each sport on which a wager is placed.

Pandazopoulos explained that in bookmakers Victoria pay a levy to Racing Victoria Limited because a joint venture between Tabcorp and Victoria Racing Ltd., (a consortium of representatives from Harness Racing Victoria, Greyhound Racing Victoria, RVL and the Country Racing Victoria) requires Tabcorp to pay a product fee to as well as return a portion of its revenues to the industry.

He gave the sporting organizations and regulating bodies until April 13 to submit responses to the paper and received submissions from 10 sporting and betting organizations: the Association of Australian Bookmaking Companies, Betfair, COMPS, the Australian Football League, Intralot Australia, Racing Victoria Limited, gaming consultancy firm Sporting Management Concepts, Sports Acumen, Tabcorp and the Victorian Bookmaker's Association.

Eight of the organizations supported COMPS's proposal. The Association of Australian Bookmaking Companies (AABC), which includes Centrebet, IASbet and Sportingbet, was the only organization to question the feasibility of the proposal. Betfair's submission was confidential so its position is unknown.

AABC said that while it supports the idea of sharing a product fee, it does not feel COMPS made a compelling enough argument for legislative intervention. Its major concern is that COMPS does not have an appropriate grasp of how the sports betting industry works and that if the changes COMPS proposed were implemented, operators would be forced to shut down or move offshore.

AABC said it feels that the proposal does not reflect the true nature of the industry and that it should not be used as a basis for legislation without first consulting all participants in the industry.

The government has said it will consider a policy position paper developed by the Office of Gaming and Racing in the next few months in response to the submissions.

Emily Swoboda is the senior staff writer at IGamingNews. She lives in St. Louis, Mo.