‘In Australia, surely there should be regulation in place that allows punters an equal chance to win and equal chance to lose. If punters can only lose, why, as a society, do we allow gambling?’ … Richard Irvine.Michael West:Lose or be locked out; you bet!
Gambling is an equal chance to win and equal chance to lose, says Richard Irvine, a professional punter who lives in Sydney. It is about a fair bet.
This is Richard Irvine’s story:
At this time of year sports gambling is ever present in our lives due to grand finals in both major football codes and the countdown to the gambling event that stops our nation, the Melbourne Cup.
It’s the bookies’ busiest time of year and they remind us of this with their blanket advertising.
If you ask the masses in Australia why gambling is popular in our society, the overwhelming response would be peoples’ desire to make fast, easy money in an entertaining way.
Most would agree that as long as it is regulated properly, to prevent corruption and prevent problem gamblers losing everything, it is an acceptable element of our society.
The Northern Territory government regulates the majority of online bookies. In 2011-2012 corporate bookmakers in the Northern Territory turned over $5.7 billion. They made a profit of $469 million, and they paid $2.35 million to the NT government in tax.
These bookies make a minuscule contribution to the government coffers in return for being able to run their businesses in this manner.
The punters lose twice.
On-course bookmakers have been the vibrant lifeblood of the horse racing gambling industry in Australia for well over a century now. There have been ‘undesirables’ plying their trade over the years, but the majority are hard working women and men working to make a buck.
Like all businesses, there has been a seismic shift to the internet. This has led to the quick demise of the on-course bookie and the rise of the online juggernaut.
On-course bookies are obliged to bet all comers, a rule that has been in place for decades. After the latest regulatory ruling by the Northern Territory Government, online bookies licensed in the NT are not obliged to bet anyone.
This ruling came about after much lobbying of the Territory government by various successful gamblers fed up at the disgraceful way they were treated by these bookmakers.
Over the years I have bet with virtually all online Australian bookies. I have had my account closed or severely restricted by 95 per cent of online bookies in the NT. The vast majority run ruthless, businesses with the sole aim of attracting and exploiting losing gamblers.
They are in business to make money and have every right to be successful. But is it fair that they are allowed to operate on a basis where they only allow losing gamblers to be their customers?
In Australia, surely there should be regulation in place that allows punters an equal chance to win and equal chance to lose. If punters can only lose, why, as a society, do we allow gambling?
The reason the majority of online bookies in Australia are licensed and based out of the Northern Territory is the very generous tax rates; along with very relaxed regulation over the bet types the bookies are allowed to offer.
The NT government allows them to bet on virtually anything from the gender of Kate Middleton’s baby to the winner of Big Brother. Other state regulators are much tighter on what bookies are allowed to bet on.
In the early 1990’s, the NT government lured these firms by offering them a turnover tax rate of 0.33 per cent on horse racing bets as opposed to the 1 per cent that other states were charging. They paid no turnover tax on all sports bets that Australian punters had with them. It was a no-brainer for them to head there. It provided a healthy revenue stream for the government.
The bookies which set up shop in the NT enjoyed growth. They paid very little tax to the NT government and avoided paying tax in other state racing jurisdictions around Australia.
This was in contrast to on-course bookies who were paying 1 per cent to their respective state governments and 1 per cent to their states racing bodies – so 2 per cent in total. The NT online bookies have only just recently started paying a 1.5 per cent turnover tax to Racing NSW after Racing NSW took them to court and won.
The bookies wanted to pay a 10 per cent tax on their gross profits instead. They also pay turnover taxes to other states on varying scales. They have only recently started paying turnover tax to all Australian racing bodies. For many years, they were happy to use racing as product to bet on but not return financially to the industry and its various racing bodies.
The NT became a very attractive place to do business. Due to the reach of the internet, a bookie can be located anywhere. They offered products that were far more competitive for punters than on-course bookies and the TAB could offer. Their costs were dramatically lower.
They could offer better value odds to their customers too due to the relaxed betting rules in the NT.
But all this was still not enough for them. Punters who were winning too much could have their account closed or restricted.
This came at a cost to on-course bookies. It also had a significant impact on the TAB which has been the financial lifeblood of the industry.
Today, a number of these bookies are companies worth hundreds of millions of dollars.
Their profits are huge and they are going from strength to strength.
Often, they are contributing to the different sports they are using as products to bet on – often via sponsorships (which are all about advertising).
However, the other way they maximise their company profits is by only allowing punters who consistently lose to be their customers.
In today’s world of super-fast computers and an abundance of information available to people via the internet, many punters have been able to find winning formulae for betting.
The vast majority of NT online bookies don’t welcome these winning gamblers as clients and simply close their accounts or severely restrict the products they are offered.
There are five major on-line bookmakers in the NT. Luxbet, Sportingbet, Sportsbet, Centrebet and the new kid on the block, Bet365.
I have had my account closed or severely restricted by all five.
What is meant by restrictions is this: they no longer offer you a fixed price service. A bookmaker’s point of difference to the TAB and its totalisator system is they offer fixed price to their clients. The odds are locked in at the time of placing the bet, where as TAB totalisator system is a pool of money that is distributed by weight of money for a particular result.
So by not allowing you to bet fixed price with them, these bookies are effectively closing your account as well.
Bookmaking is a skill based on chance and probability.
Bookies work out what they think is the percentage chance of an events outcome and then turn it into odds for their customers. They shave these odds a little to create a bookie’s profit margin. Once they put these markets up they should have confidence in their market and should bet, you would think, all comers. That’s the business model.
They are direct in their message when closing accounts.
Luxbet sent me an email telling me my account was being restricted and saying it would not offer fixed price betting on horse racing, and that it was a commercial decision.
With Bet365, I received a call from a man based in their UK office telling me my account was to be closed for economic reasons.
Sportingbet emailed me and said, following an account review, there have been some changes made to your product offering, effective immediately”.
After getting blocked, I looked into the regulatory framework for these bookies and found that their obligations were insignificant.
I then began lobbying the NT government for online bookmakers to be obliged to bet all comers to win at least $1000. After six months of lobbying and getting pushed around to all different parts of the government they finally made a ruling. They ruled that NT licensed online bookmakers are not obliged to bet anyone, and can close accounts of anyone they choose. The big money had won. The punter had lost.
The main reason the NT government put forward in defending the changes was that the bookies could not handle the volume of bets that came their way via the internet.
In its findings, the NT government said that the losses bookies could sustain by being hit with large volume of individual bets all at once would be unreasonable.
Again, this is ridiculous. Sportingbet and Centrebet were just acquired by William Hill (a UK gaming giant) for $660 million. The absolute maximum amount of individual bets they could receive all at one time would be five, before they had time to change the odds. To lose maybe $5000 (only if the horse or sporting team wins) in one transaction is hardly unreasonable for a company the size of William Hill.
Surely the government has sanctioned a system which leads to problem gambling when the only customers these bookies accept are losers.
The NT needs to be asked a series of questions regarding its regulation of online bookies and the effect the regulation has on problem gambling.
Foreign interests own the four biggest online bookmakers in Australia; Sportingbet, Sportsbet, Centrebet and Bet365.
These companies, valued in the hundreds of millions, and are only interested in betting losers and all profits are then funnelled off-shore.
The general public is fed up with the intrusion of gambling into their everyday lives and the barrage of advertising. It seems many have no idea how ruthless these bookies are in their business practices and the NT government is happy to let it all happen.
Be warned, the big toothy grin of your bookie on your TV screen will disappear, along with your account, should you do the unthinkable and consistently win.
Richard Irvine is punter who lives in Sydney
The original release of this article first appeared on the website of Hangzhou Night Net.