The broken business of bookmaking

ban hammer

An all-too-familiar tale of woe yesterday in the Champion Bets office.

More messages from punters who’ve had their stakes severely limited by corporate bookies after a short successful period.

It’s become the bane of the punter’s existence.  Thankfully racing (in New South Wales and Victoria at least) has had the wisdom to deal with it and implement industry minimum bet limits, forcing bookmakers to actually manage a book rather than simply filter out any punter who may possess a brain cell or two.

For other sports, the battle continues.

Most banned punters we speak to are forced to seek other solutions, which usually means finding bookies from other countries who’ll take their action.

The impact of this on things at home has a few facets.

For the winning punter, life gets a bit more difficult.  Many still manage to get their bets on somewhere, but not with the ease that comes with betting locally.

Once upon a time, if a bookie was being beaten they might be inclined to sharpen their market.  The inherent percentage advantage a bookmaker holds in any market ensured them a profit as long as basic bookmaking competence was displayed.

No more.  The garbage markets and lines remain: rather, anybody smart enough to beat them is kicked out.

The other party with skin in the game is the government.

Financially, as soon as that money goes offshore, it’s gone forever.  Out of the Australian economy.  Untaxed.

Socially, it means the local subsidiaries (eg Ladbrokes, William Hill, Sportsbet, Unibet) of foreign-owned companies are purely targeting losing gamblers in order to turn profits to send back overseas.

It’s an industry model that encourages chasing those customers who lose the most.  That’s obviously going to include problem gamblers.

So who is benefiting here?

The government are slowly getting their heads around it, but their initial focus (that we spoke about last week) simply involves attempting to ban the use of overseas bookmakers.

It doesn’t address the root of the problem and let’s be honest, it’s hard to see it working anyway: technology generally remains a few steps ahead of any government efforts to curb it.

We were told last week that the man charged with implementing these measures, Federal Minister for Human Services Alan Tudge, had no response to our questions regarding the seemingly strong case for a national minimum bet law.

Tudge is implementing recommendations from Barry O’Farrell’s review of the Interactive Gambling Act.

The government’s own response to those recommendations includes a commitment to “examine the existing literature base on betting limits, commission further research, and undertake further consultations to explore options to address the impact of betting restrictions imposed by Australian licensed bookmakers, which have been cited as a factor in decisions to gamble offshore.”

Logic suggests it may well be the key factor.

When will we see action?