The experience of 40 years of legal sports betting in Australia highlights potential risks for gamblers in the United States.
Australians have a strong affinity for gambling, often expressing a willingness to bet on various events, even as trivial as two flies crawling up a wall. Gambling has played a role in funding iconic landmarks such as the Sydney Opera House and Sydney Harbour Bridge through government-operated lotteries.
While the United States has only recently embraced legal sports betting, with the overturning of a federal law in 2018, Australia has had a long history of legal sports betting since the 1980s. As a researcher in the field of gambling since 2011, I have been involved in significant studies on online gambling, risk factors associated with problematic sports betting, and the potential harms linked to specific types of sports betting.
As Americans become more familiar with sports betting, there are valuable lessons to be learned from Australia’s approach to sports betting and the extensive research conducted on its effects.
A culture of gambling
Australia has a rich history of government-regulated gambling, with its origins traced back to the earliest recorded horse racing event in 1810.
Originally, individuals who wanted to place bets had to physically visit a race track. However, this proved to be inconvenient for many bettors. As a result, unauthorized bookmakers began accepting bets in establishments such as bars. These illicit bookies offered more favorable odds compared to the official bookmakers at the race tracks, primarily because they were able to avoid paying taxes.
As a response to the growing demand for off-course betting options, state governments in Australia took action. The initiative began in 1961 with the establishment of the Totalisator Agency Board in the state of Victoria. This move paved the way for other states to follow suit and open their own off-course betting companies.
While horse betting had already been legalized in Australia, sports betting remained illegal until 1983. It was during this year that Totalisator Agency Boards started accepting bets on sports, primarily focusing on popular sports such as soccer, cricket, and boxing. The emergence of privately-owned sportsbooks didn’t occur until 1993 when Sportsbet became the first non-governmental company to obtain a license. Subsequently, online sports betting gained momentum, with the launch of Centrebet.com.au, an online gambling website, in 1996.
In the present day, numerous online operators offer a wide range of betting options, including sports, races, and even unconventional bets such as predicting the color of the prime minister’s tie.
Slowing the pace of bets
The impact of gambling on Australian culture has resulted in various consequences.
Australia holds the unfortunate distinction of having the highest per capita gambling losses globally, with individuals losing more than double the amount compared to most other countries. This can be attributed in large part to the widespread presence of slot machines in hotels and bars. Additionally, Australians also incur higher per capita losses through sports and race betting.
Given that sports betting was already established in Australia before the advent of online gambling, the government had to determine which types of betting would be permitted online. Consequently, the country has implemented regulations that restrict certain forms of wagering, particularly those that involve fast-paced betting.
For instance, slot machines are considered fast-paced as each spin represents a bet, and individuals can easily become engrossed, losing track of their spending. As a result, online slots are prohibited to mitigate this risk.
Similar restrictions apply to online sports betting. Most individuals place their bets before a match commences, typically wagering on the outcome of the game or the margin of victory. However, over time, an increasing number of betting options have become available. People can now place bets on who will score first or next, or whether a specific number of points will be scored in a quarter or half. Since 2002, Australians have also had the opportunity to place bets “live” or “in-play” during a game.
In Australia, live sports betting is permitted, but it cannot be conducted online. Instead, individuals must place their bets through telephone calls or at designated venues such as bars, casinos, or betting shops. These physical locations serve as storefronts where people can personally place their bets. One of the reasons for this restriction is to enable staff members to intervene if they observe signs of problematic gambling behavior, similar to how a bartender may refuse to serve alcohol to an intoxicated customer. However, the frequency of such interventions is a separate matter that may vary.
Additionally, there is a specific type of sports betting called micro betting, which involves placing bets on very short-term outcomes, such as predicting whether the next pitch in a baseball game will be a ball or a strike.
Through studies conducted by myself and other gambling researchers, we have found that micro betting is predominantly engaged in by individuals who exhibit higher-risk gambling tendencies. In Australia, microbetting is not permitted even through telephone calls. However, consumers can access markets in other countries to place these bets, although they are strongly discouraged from doing so.
Ads flood the airwaves
The Australian online betting market is highly competitive, resulting in a significant influx of gambling advertisements and promotions targeted towards Australians.
Remarkably, the number of television advertisements for gambling is five times higher than that of alcohol advertisements, despite Australia’s prevalent drinking culture.
These gambling advertisements have proven to be effective. Through a series of studies conducted in collaboration with Professor Nerilee Hing from the Experimental Gambling Research Laboratory at CQUniversity, we discovered that individuals who are exposed to a greater number of ads and promotions are more inclined to engage in unplanned betting, exceed their intended betting amounts, and place bets on less probable outcomes. Consequently, this heightened betting activity leads to increased losses for these individuals.
Our research also delved into the impact of public advertising, such as television ads, in comparison to direct messages, including emails or text messages. Surprisingly, we found that direct messages tend to be more influential, as they can be personalized and are often more challenging to regulate due to their private nature.
In Australia, individuals have the option to use credit cards for placing bets. However, it is important to note that these transactions are not treated as regular online purchases. Instead, they are categorized as cash advances. Consequently, there are no interest-free periods, and higher interest rates and cash advance fees apply. Unfortunately, many consumers are unaware of this distinction and end up having to pay more than they initially anticipated. In response to such concerns, certain gambling operators have even advocated for a ban on the use of credit cards for online gambling.
Regulations in play
As mentioned earlier, one of the primary objectives behind restrictions on online gambling is to mitigate harm. However, the accessibility of online gambling remains a concern, as it is readily available at any time through smartphones or tablets, which are ubiquitous in our society. This ease of access raises particular concerns for individuals who experience strong gambling urges, especially those with limited self-control. With various payment methods, including credit cards, individuals can easily place bets even when under the influence of alcohol.
Fortunately, additional regulations are being implemented to address these issues.
The responsibility for legislating online gambling in Australia lies with the federal government. To address the challenges associated with online sports and race betting, the government has introduced the National Consumer Protection Framework. This initiative aims to implement changes such as restrictions on gambling promotions and the establishment of a national self-exclusion program.
Previously, individuals who engaged in heavy betting often held accounts with multiple gambling operators. If they wished to self-exclude, they would have had to do so separately with each operator. However, a forthcoming government-run program called “Betstop” will allow individuals to self-exclude from all online operators in one centralized place. This unified approach will provide a more effective means of self-exclusion for individuals seeking to control their gambling habits.
To promote responsible gambling, consumers can set limits on their betting activities and monitor their spending. Since 2019, it has been a requirement for every online gaming provider to offer deposit limits, although consumers have the choice of whether or not to utilize them. However, our research team has discovered that voluntary limits, many of which have excessively high maximum levels, have limited effectiveness. Implementing mandatory limits with reasonable maximum thresholds would have a more significant impact on promoting responsible gambling practices.
In contrast to Australia, where sports betting was already legalized before the emergence of online betting, the United States is currently introducing legalized sports betting in an era where technology enables various types of betting products, including those that can be particularly risky. It is crucial for U.S. legislators and regulators to carefully consider not only the legality of sports betting but also the types of betting products that should be permitted and the potential implementation of harm-reduction regulations.
Different U.S. states have varying restrictions on sports betting. Some states do not allow it at all, while others only permit in-person betting, and some states allow a wide range of options, including online wagering. Additionally, certain states have restrictions on specific types of bets.
While some may argue that it is the responsibility of bettors to ensure their own safety, it is important to recognize that nobody sets out with the intention of developing a gambling problem. Moreover, gambling products inherently possess addictive qualities. Therefore, it is crucial to prioritize measures that promote responsible gambling and protect individuals from the potential harms associated with excessive gambling.