Analysis: The true story of Australian thoroughbred wagering since 1990
We’ve long been told that Australians are the biggest spending gamblers per capita in the world, but how much of this is wagered on thoroughbred racing?
Horse racing is the public face of gambling in Australia. The historical prominence of races like the Melbourne Cup looms large in the Australian psyche, and when it comes to the concept ‘having a punt’, most Australians conjure an image of a day at the track.
Recently released data from the Racing Australia Fact Book revealed that Australians turned over $26.4 billion on thoroughbred racing in 2022/23. While that is down 9.5 per cent on the previous year, it is still over three times more than what was spent in 1989/90.
However, through a comparative analysis of the official Australian Gambling Statistics and the RA Fact Book, The Straight has established that while annual legal gambling turnover on thoroughbred racing grew by close to $19 billion since 1990, that growth is dwarfed by the $179 billion extra spent each year on gambling in Australia.
What that means is that the percentage of overall gambling turnover spent on thoroughbred racing has more than halved since the start of the 1990s.
At the start of the 1990s, ahead of the widespread liberalisation of regulation of gaming machines and casinos, 30.4 per cent of money Australians gambled was via the two legal forms of wagering on thoroughbred horses – the TAB and bookmakers.
In the most recent total gambling figures taken from 2020/21, that proportion had dropped to 13.8 per cent. It was as low as 7.6 per cent before COVID-19 recharged the thoroughbred wagering batteries, but more on that later.
Put simply, while wagering on racing did experience a revival over the COVID years, the long-term trend has seen it playing a significantly less important role in the Australian gambling landscape.
You’ll have already established that this is a fairly statistic-heavy article but bear with us, as we pick through how that long-term trend has evolved, and the three key eras of change.
The first era of change was from 1990 to 2008.
While gambling expenditure on other forms such as poker machines, lotteries and casinos exploded by over 500 per cent in the 1990s, racing turnover grew by only 7.4 per cent to just under $9 billion in that decade.
From boasting nearly a third of gambling turnover in 1990, by the year 2000, that ratio had slumped to just 7.9 per cent as the thoroughbred industry faced major challenges when it came to its chief source of revenue.
That low percentage of overall turnover would continue for 15 years and was particularly stagnant in the middle of the 2000s, where it inched up to $11.7 billion, or just 7.9 per cent of total gambling spend in Australia.
The wagering industry, which had grown limp in terms of innovation under a monopoly TAB pari-mutuel model and a failing on-course bookmaker market, was ripe for a shake-up, and it came in 2008, when a landmark High Court case opened the door for the corporate wagering revolution.
That sparked the second era, which lasted from 2008 to 2019.
It did take time for wagering on thoroughbred racing to see a significant impact from this. While annual thoroughbred turnover had risen to $14.5 billion by 2012/13, that was still only 8.2 per cent of the $177 billion spent by Australians across gaming and wagering in that year.
Even by 2015/16, the ratio of thoroughbred turnover to overall gambling had fallen to a historic low of 7.5 per cent, as overall gambling spend rose much faster than spending on thoroughbred racing.
However, innovations in the wagering sector did have a marked impact over the Past six or seven years. In the most recent Australian Gambling Figures, which take in the 2020/21 financial year, Australians turned over $197 billion on gambling. Of that, $27.2 billion, or 13.8 per cent, was on thoroughbred racing.
Specific turnover statistics on thoroughbred racing are made available on an annual basis through Racing Australia. Through them we can see that thoroughbred turnover almost doubled between 2015/16 and 2021/22, where it reached a record $29.1 billion.
All of that growth came from the corporate bookmaking sector, which grew its market share of thoroughbred turnover from 37.6 per cent to 67.5 per cent in that six-year period.
The third, short-lived era involved the two years of the COVID-19 pandemic, where pick up in thoroughbred investment came at a time of falling turnover in other forms of gambling.
Australian gambling turnover dropped from $232 billion in 2018/19 to $174 billion in 2019/20 as lockdowns saw casinos and poker machine venues shut in the immediate pandemic era. While $58 billion less was turned over on gambling in that year, thoroughbred turnover saw small growth.
Then in 2020/21, with racing continuing despite ongoing pandemic challenges, thoroughbred investment went up by the highest amount in history, $6.1 billion, or 24.8 per cent. That outpaced overall gambling investment that year, which increased by 13.7 per cent.
Corporate bookmakers made massive gains over this time. Even once the difficult trading environment for parimutuel and retail betting eased last financial year, they maintained the lion’s share of the thoroughbred market, representing 63.9 per cent of turnover.
However, it is clear that we are now entering a fourth era, where spending on thoroughbreds is moderating off these precipitous highs. Where that ends, we don’t know, but anecdotally, expectations are that the market could be headed for another year of close to double-digit declines.
The final piece of analysis involves looking at the evolving shape of the Australian population since 1990, when there were 12.6 million Australians aged 18 or over. At that point, each adult turned over an average of $2128 a year on gambling and $663 specifically on thoroughbred racing.
In 2020, of Australians who were of the legal age to bet, the average spend on gambling had jumped to $9884, but only $1348 of that was on thoroughbred racing.
That means that while average gambling turnover has surged some $7756 per person in that time – a 364 per cent increase – the amount spent by those betting on racing went up $685, or just over double.
*Data sourced from Racing Australia Fact Book and Australian Gambling Statistics
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