Interactive Gambling Ban

8 June 2001

Meeting in Brisbane, the Australian Racing Board today called on the Communications Minister, Senator Alston, to accept legislative amendments it has submitted to exclude wagering services from a proposed ban on interactive gambling.

The Australian Racing Board fully supports the Federal Government's attempts to prevent the proliferation of electronic gaming machines and casino games in homes via the internet.

Racing can fully understand that the idea of people sitting at home playing poker machines and casino games in their living rooms has the Federal Government concerned, and it is commendable that the Government is trying to prevent it.

However, extending the ban to wagering is superfluous to the Government's real objective and the product of some basic misunderstanding. Furthermore it will do serious damage to the racing industry.

The role of the internet in wagering is simply as an alternative to telephone betting, something the TABs have been doing for 40 years. Internet gaming is different. If allowed people won't have to go to a casino, club or pub to play a poker machine - they can instead do it at home and at any hour of the day or night.

While gaming turnover has grown by 900% in the last 25 years, wagering turnover in the same period has regressed by 10.8%. Soaring rates of problem gambling are attributable to one thing - State Government's and their addiction to poker machine revenues.

Australian Racing Deserves the Federal Government's Support

Australian Racing is a major agribusiness which is one of the mainstays of the economic base of regional Australia. Racing currently contributes some $6 billion per annum to GDP, 40% of which is generated in regional areas.

A total of 22,000 races are held around Australia each year. These are staged by 428 race clubs, of which thirteen are metropolitan and 415 are located in country or provincial areas. Of the 22,000 races conducted each year, 23% take place in cities -77% take place in the bush or regional areas of Australia. If this ban is extended to wagering then it will mean the closure of country race clubs which would do great damage to the social fabric of country communities.

Breeding and racing are labour intensive activities providing direct employment for 100,000 Australians, many of whom live in regional areas. These jobs, particularly those in regional Australia, are largely irreplaceable. But if funding to Australian racing is undermined then people employed in racing-related callings, particularly in regional areas, are highly unlikely to find replacement jobs in substitute industries.

The Offshore Threat

Finally, what must be understood is that Australians wager online today and will do so in even greater numbers tomorrow and in the future. We already have the problem of bookmakers based in the no-tax haven Vanuatu, taking telephone bets from Australian citizens on Australian races. One of these Vanuatu operations alone has an annual turnover of over $500m. Basing themselves in no-tax countries already gives offshore operators - who don't pay anything to our racing industry or governments - a major competitive advantage over Australian TABs and bookmakers - who do pay the Australian racing industry to bet on our races. If Australian operators are prevented from offering an on-line service then that money will go offshore.

A leakage of only 3% per annum in turnover from Australian TABs to overseas operators over the next 10 years would see the distribution of funds to racing cut by $115 million and would cause a significant rationalisation of country race clubs. Leakage of 10% a year would mean a fall of $345 million in racing industry funding, which would cripple the Australian industry.

In all these circumstances, the Australian Racing Board is urging the amendment of the Interactive Gambling Bill. Shortly stated there are no benefits to be obtained from including wagering in the Bill and very real and serious costs if it is not excluded.

Further inquiries regarding this Press Release call:

Andrew Harding

(02) 9551 7700