Straight Up – Fair game? – Racing fights sports betting surge with one hand behind its back

In this edition:

• Racing reliance cited as a weakness in fight for PointsBet
• Not in-play – Aussie bookies reject automated in-race pricing
• Overseas punters, simulcast meetings help Hong Kong Jockey Club increase seasonal betting turnover
• Betr calls EGM as share buyback looms
• ReadyBet latest bookie in ACMA sights

Based on current trajectories, at some point in the next decade, turnover on sports betting in Australia will surpass that on racing.

The liberalisation of the corporate bookmaker landscape in Australia in the past 25 years has seen the value of the sports betting market grow from $1 billion to projections in excess of $15 billion in 2025.

While racing wagering has also grown over the same period, fuelling rocketing investment and prize money in the sport, the past three years have seen a circa 20 per cent decline from the reported turnover highs of $29 billion in 2022.

But the various sets of data, including participation in the two modes of wagering – racing and sports – indicate they are closer to parity than ever before.

A Melbourne University study released in March put regular participation in gambling on racing at 10.1 per cent and sports betting at 9.3 per cent, while other studies indicate that on an annual basis, 38 per cent of Australian adults bet on racing and 34 per cent on sports.

Racing’s monopoly on the wagering dollar ended a long time ago, and sport has become particularly attractive to a younger generation with ready access to global sports.

The difference of course is that while racing is heavily reliant on wagering to fund an industry which creates significant employment, the revenue derived by sports bodies is much less important to their bottom line.

In fact, for most overseas sports, including the NBA which is by far the biggest sports betting product in Australia, there is little to no product fees involved, with the exception of data fees.

The switch from Australians punters being racing-led to sports-led is on in earnest, with several WSPs already reporting that sports is now a bigger part of their business.

But a detail in the current battle for PointsBet highlights the challenge that racing has moving forward, and it should raise eyebrows at every PRA and racing club in the country.

PointsBet claimed potential suitor betr’s business was too racing reliant, saying 85 per cent of its net win was derived from racing products.    

The people who run PointsBet would be described as “racing people”, but their duty to their (current) shareholders is to profitability. Sport makes them more money, which is why they are moving toward becoming sports-betting led.

If this was just a matter of customer preferences, then so be it, but it is the cost of betting on racing which is driving this approach. Product fees (race fields), plus POCT and data fees make margins on racing a lot thinner.

It is little wonder they would rather push their customers to sports and with overrounds continuing to blow out on racing, it is also little wonder that punters might choose the MCG, Accor Stadium or indeed Madison Square Garden as their venue of choice for a weekend punt rather than Randwick or Flemington.

This week UK punters started betting in-play on Victorian races, thanks to AI-generated automatic pricing. In-race betting represents less than five per cent of turnover in Australia, but we have highlighted the possibility of it before.

Australian punters won’t see a major difference to their product offering, with local bookies sticking to their current approach of utilising trading teams rather than automation.

Meanwhile, Hong Kong has reported a jump in its wagering numbers in its recently completed racing season.

In other wagering news this week, ReadyBet has earned a rebuke from ACMA over a breach of its responsible wagering duties, while the fight for PointsBet rolls on.   

Don’t forget to check out this week’s edition of Straight Talk, featuring an extensive interview with trainer Will Freedman and discussion of the biggest issues in wagering, racing and breeding.

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Regards

Bren O’Brien

Managing Editor and Founder

The Straight