For many years, the Melbourne Cup has been one of the favourite events for thousands of Australian punters. However, some of the recent problems in the country’s horseracing sector have fended Australian customers off, making many of the punters lose their interest in the event.
Hardly anyone would be surprised by the fact that the horseracing industry of Australia heavily relies on the local gambling industry. For the time being, it has been accounting for about 90% of the annual revenue of Racing Victoria and generated a turnover of over AU$7 billion over the last fiscal year.
Unfortunately for the sector, a certain decline has been registered in betting on large racing and sports events. For example, betting on this year’s edition of the Caulfield Cup registered a significant 24% decline, while Racing Victoria saw a 7.5% decline in 2019, regardless of the record-breaking numbers it reported on the previous year. Aaron Morrison, the chief financial officer of Racing Victoria, explained that the health of the sport and their products were extremely important to them.
As far as the industry is concerned, the decline registered in betting activities were probably due mostly to bad luck. According to Mr Morrison, a series of unprecedented race results which have been favourable to bookmakers and not to punters has been the main reason for the decrease.
Animal Welfare Concerns and Race Fee Structure Could Have Hurt Betting Rates in Australia
On the other hand, earlier this year, some concerns regarding animal welfare were raised. Right before the start of the Spring Carnival, a TV program aired by a local media made some revelations regarding the poor treatment which some thoroughbred racehorses have been getting after “retiring” from their careers.
The revelations made by the Australian media ABC, along with the scandals which unfolded within the racing industry over the last year, are considered as some of the factors which could have affected the number of bets made by local punters.
According to other analysts, the race fee structure of Racing Victoria has forced gambling operators to boost their odds. Richard Irvine, who is a self-described punting advocate, said that some punters such as himself could see that their odds of winning have been getting smaller. The same applies to so-called recreational players.
The hybrid race fee model of Racing Victoria taxes gambling operators based on their turnover or revenue when they generate a winning, and based on their turnover when they generate a loss. This policy has been considered controversial, with many individuals close to the betting industry blaming it for the recent decline in betting.
The organisation which represents local gambling companies, Responsible Wagering Australia, has shared an opinion that the aforementioned fees, combined with the introduction of the so-called point of consumption tax, were putting some pressure on the companies. A spokesman for the body shared that the point of consumption tax and the rest of the taxes make one of the highest effective tax rates that are imposed on the betting sector on a global scale.
- Author
Olivia Cole
