There are four types of wagering and sports betting providers: totalisators, on-course bookmakers operating at racecourse meetings, corporate book- makers operating off-site from racecourses, and the newest type, betting exchanges. This section briefly outlines how each of these are regulated in the Australian, Canadian, New Zealand and UK markets and the associated public policy issues associated with regulating their operation.
All Australian state and territory governments have granted their respec- tive TABs an exclusive licence to conduct wagering and sports betting in retail agencies, hotels and clubs and over the telephone and internet with the result that in each jurisdiction, the respective TAB operator enjoys a monopoly. The TABs in all states except NSW pool their sports betting under the TAB Sportsbet brand managed by TABCORP Limited, the priva- tized Victorian TAB. The privatized NSW TAB, TAB Limited, conducted sports betting under the SportsTAB brand until mid 2004, when it was acquired by TABCORP. The SportsTAB brand is still used in NSW, but is now managed by TABCORP, which has effectively created a national TAB pool for sports betting. While all of the privatized or state-run TABs offer fixed odds sports betting on sporting events, the sports betting market
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is dominated by corporate bookmakers based in the NT and the ACT.
Sports betting taxation revenue for state and territory governments has also increased, more so for the states with multiple sports betting providers, but revenue returns differ markedly between the states and territories because of different rates of taxation (Australian Racing Board, 2007). These differ- ences in regulations, taxation rates and the sports betting products offered by the TABs in each jurisdiction also extends to the way in which book- makers are licenced.
As of 30 June 2007, there were 638 on-course bookmaker licences issued across Australia for the three codes of racing (thoroughbred, harness and greyhounds), the majority of which were issued in the major racing states of New South Wales (220), Victoria (181) and Queensland (112) (Australian Racing Board, 2007:10). There were also 10 licenced corporate bookmakers in the NT, and six in the ACT (Australian Gaming Council, 2007). The power to issue bookmaking licences differs between each of these jurisdictions. In NSW, Victoria and Queensland, the racing governing body is empowered to issue bookmaker licences (including sports betting), while this function remains in the hands of state or territory regulatory agencies in those jurisdictions where the horse racing industry is relatively smaller (South Australia, Western Australia and Tasmania) or negligible (ACT and NT). Hoye (2006b:158) argued that ‘this could be due to governments accepting the regulatory role in the absence of the controlling body for racing being able to perform the function, or governments (in the case of the NT and ACT) wishing to control the licencing function in order to maximise taxation revenue by creating opportunities for corporate book- makers to offer wagering and betting on activities conducted in other states of Australia’. It should also be noted here that none of these jurisdictions have seen fit to empower sport governing bodies with any role in the pro- cesses to licence bookmakers. The newest form of wagering operator to be granted a licence to operate in Australian jurisdictions has been betting exchanges, a form of wagering where punters can bet with each other through a third-party provider. The first of these was Betfair, a company that was granted a licence to operate onshore by the Tasmanian Govern- ment in 2006. This in effect enabled it to receive bets (including sports bet- ting) from any person in Australia via the internet.
The majority of gambling activity in Canada is government owned and operated (Azmier, 2005). The remainder, including betting on horse racing and some sports-based lotteries, is regulated by each provincial government.
This regulation extends to licencing racetracks to be able to conduct racing and wagering activities and the licencing of teletheatres (off-track betting locations operated by racetracks). In many ways, the federalized regulatory
system in place in Australia is replicated in Canada, but the Canadian sys- tem remains heavily controlled by provincial government agencies rather than some licencing functions being devolved to governing bodies as is the case in licencing bookmakers in Australia.
In many ways, the regulatory system in place in New Zealand could be considered ‘leading edge’ with a single agency, the New Zealand Racing Board (NZRB), acting as the regulator and provider for all racing, wagering and sports betting activities. The NZRB is established under a single piece of national legislation and is charged with running the TAB, the country’s sole provider of betting on racing and sport and maximizing wagering and sports betting profits for the benefit of racing and other sports. The NZRB returns a proportion of every dollar spent on wagering and sports betting back to the relevant sporting code. There are no bookmakers licenced in New Zealand, thus all wagering and sports betting is conducted via the NZRB.
In contrast to the federalist systems of regulating wagering and sports bet- ting in Australia and Canada, the UK system is more like the New Zealand centralized model. Under the Gambling Act 2005, the Gambling Commis- sion regulates all commercial gambling in Great Britain, apart from spread betting and the national lottery (Gambling Commission, 2007c). This extends to betting on horse racing, football or other sporting events. The Commission’s stated objectives in regulating these activities are to keep crime out of gambling, to ensure that gambling is conducted fairly and openly and to protect children and the vulnerable from being exploited by gambling (Gambling Commission, 2007c). In fulfilling this role, the Commission issues licences in three areas:
1. General betting licencees are able to offer facilities for betting as premises-based bookmakers (off-course) and on tracks (on-course), as well as by remote means (for example by telephone or over the internet).
2. Pool betting incorporates racecourse, football and other sports pool operators as well as ‘fantasy football’ type competitions. It can be conducted in person, for example the Tote accepts pool bets on tracks and in high street betting shops, or remotely, such as through an internet betting site run by one of the football pools operators.
3. Betting intermediaries facilitate the making or acceptance of bets between others. Remote betting intermediaries, often called betting exchanges, generally operate through the internet (Gambling Commission, 2007d).
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While there appears to be a huge variation in the systems employed for reg- ulating wagering and sports betting in these four jurisdictions, they are each tackling similar public policy issues. The first is to restrict access to the wagering and sports betting markets, either by stipulating the type of wager- ing or betting allowed or by creating monopolies to make it easier to regulate operators and to maximize taxation revenues. The second is to control what have become an increasingly wider range of legalized gambling activities through the creation of strict licencing regimes and centralized monitoring agencies. In many ways, the schema developed by Miers (2004) to describe the ‘British model of commercial gambling regulation’ can be used here as a basis to portray the regulatory system for wagering and sports betting. The first element is to regulate the probity of suppliers by requiring individuals and organizations to hold a licence qualifying them to work or operate within the industry. The second is to regulate the supply of wagering pro- ducts and services by restricting where and when such activities can take place. The third is to regulate what wagering or sports betting products are permissible, such as the type of events on which people can bet and spe- cifying the medium through which people can bet (i.e. telephone, internet, retail outlet). The fourth element is to regulate who is allowed to place bets.
The final element is to secure compliance to these conditions via the actions of regulatory agencies, the imposition of penalties for breaching licence conditions and inspection and auditing of wagering and sports bet- ting activities.
The two-tiered layers of government in the UK and New Zealand have arguably made it easier to achieve these policy aims through national legis- lation and agencies, while the federalist systems of Australia and Canada have led to a more fractured approach at the provincial and state levels.
What is common in all the jurisdictions, however, is the attempt to main- tain the integrity of the sport and associated wagering and betting activities in order to protect the interdependent financial interests of sport governing bodies, wagering operators (of all types) and governments.