Racing’s burning questions as PM moves on wagering advertising reform

When key public hearings were held preceding the landmark You Win Some, You Lose More report in 2023, the Australian racing industry didn’t get a seat at the table

Wagering and sports’ biggest names were put in the public spotlight before the parliamentary committee chaired by the late Peta Murphy, but racing’s best interests were represented in written submissions by Racing Victoria and Racing NSW, two of over 100 received.

It was a similar story when policy discussions began in 2024. Wagering, sports and media bodies were on the front foot, but racing executives, with the exception of one whose professional interests crossed over with other sports, were not heavily involved.

In that instance, it was broader representatives of the thoroughbred racing industry who attempted to ensure that racing was part of the conversations being had about gambling reform in Canberra.

The racing industry has long assumed it would get a carve out from advertising reforms and bans. The final You Some, You Lose More recommended an exemption for “dedicated racing channels and programming” when concerning gambling advertising.

It was a suitably vague recommendation, which left a lot of questions unanswered.

After Prime Minister Anthony Albanese announced the most significant raft of gambling advertising changes in Australian history on Thursday, one would hope the racing industry has learned its lessons and is much more active in seeking out how the new measures will work.

It can’t rely on the wagering companies to always act in the best interests of the racing industry.

As one wagering industry insider put it to The Straight, ‘the devil will be in the detail’.

Currently that detail is very light on – we won’t know more until the official response in May – and there has been no confirmation if racing would get an exception and what that might look like.

The expectation from within both the racing and wagering industries is that it will happen.

If it doesn’t happen, the consequences for racing media and racing in general will be dire. But even if we assume it does, there are several significant impacts to consider.

What we don’t know is much more concerning than what we do know. There are key questions still to be answered.

Will it be racing media or racing related marketing which will get a carve out?

This is a very important distinction. The expectation is that the digital, social media, TV and radio restrictions will be applied according to the platform of what is being promoted. Racing-dominant publications – it was previously mooted as 75 per cent –  will still be able to feature gambling advertising.

But what about the Nine Network during Cup week or Seven on Saturdays? They are not racing networks. Will they be able to feature gambling promotion?

The other question is if the exemption is dependent on which media it is on, then what is to stop bookmakers advertising sports betting on a racing channel.

If you cut it the other way and make it racing related betting marketing, does that mean that racing promotion can sit on a mainstream media publication?

Will in-venue restriction apply to racing?

Racing media may get a carve out, but will this extend to racing venues/racecourses?

Under the proposed reforms, in-venue signage promoting wagering would be banned. Applied strictly, this would prevent racecourse sponsorship, as well as aspects like name takeover of venues.

You would assume that the federal government would understand that, but The Straight has been told that in previous rounds of consultation when this was raised, policy makers had not even considered this as a possible impact.

How does the ‘celebrities and sports people’ promotion ban apply to racing?

Racing’s participants, both current and former, are often used to promote wagering.

One bookmaker has contracted two former champion jockeys to market its racing presence for several years, but under proposed new laws which restrict celebrity and athlete endorsements, then that would be prevented, unless racing marketing received an exemption.

The vague use of the term celebrity could apply to anyone but could also prevent cross promotion between racing and other sports in any form of wagering context, a staple of carnival time promotion.

Also, where do odds updates, a raceday standard over many years, fit into this?

Will wagering companies cut promotion of both racing and sports?

Assuming these additional restrictions are introduced from January 1, we can expect bookmakers will be spending a lot less on marketing across the board. As one industry insider put it, the marketing arms race would be over. That would satisfy the political desire for behavioural change.

Even with racing media having an exception, it won’t necessarily mean that those platforms will get an increase in marketing. It may be that bookmakers find other avenues to reach their customers.

What about the flow through of punters from sports to racing?     

Racing administrators have previously claimed that a decline in sports wagering would be a positive for racing, and that sports betting was cannibalising racing.

The data over the last 10 years does not support this. It shows sports taking share of market, but racing having grown significantly. On this evidence, it would appear they are more complementary than they are competitors.

The Straight reported in 2024 on anecdotal evidence that a cohort of new betting customers from one major brand aged 18-30 were split 80-20 per cent sports/racing when they first signed up. Within 2-3 years, 40 per cent were betting on racing.

As one betting executive put it: “It may end up that sports ends up being the saviour of racing.”

But if the flow of new customers coming into sports betting slows significantly due to advertising restrictions, then what happens to those future racing customers?

What about the POCT impact?

Racing benefits from sports betting through state-based Point Of Consumption Taxes,

Every racing body in Australia has funding agreements which flow directly from the proceeds of POCT, but if advertising restrictions lead to drops in sports wagering, which then impact POCT revenue, then those shortfalls will be felt by the PRAs.

It’s a quite simple equation and given the expectation is that wagering across the board will take a hit from these proposed new measures, then the racing industry will need to cut its cloth accordingly.

That is before we consider the likelihood that sports bodies, which had previously enjoyed lucrative sponsorships with wagering companies, come looking for the POCT which is generated on their sports.

Does this boost the illegal market?

Illegal overseas bookmakers are becoming more prolific within Australia, and if the regulated industry’s research is to be believed, one in seven dollars on Australian racing is being placed through these unregulated providers.

The argument against many of these mooted changes from the wagering industry is that they open the door for illegal bookmakers to target Australian customers. For at least one senior executive spoken to by The Straight, it was their main concern.

The government’s response is that they will be better resourced to police this black market, but there is a belief that policing a more regulated market locally will be a much easier task than chasing nebulous international outfits down rabbit holes.

The expectation, from industry at least, is that a higher percentage of money will be spent offshore. These operators do not pay local taxes or product fees, Even more significantly, hundreds of them offer markets on Australian racing thanks to agreements with local providers.

Greater regulation in other jurisdictions, such as the UK, has led to much higher leakage into offshore markets and a deleterious impact on wagering revenues.