November 2011

Essays

Jonathan Horn

Caught in the game

Odds on at the MCG, ANZAC Day 2009. © James Thomas. Image courtesy of Stadia Media.
The rise of the sports betting industry

Back in July, someone wagered $1 million on Geelong to defeat Essendon in an AFL game. Geelong, the foremost team of its generation, was paying $1.09, a ‘bank interest’ bet for high rollers. But Essendon scuppered the plunge. While there was no suggestion that the fix was in, the wantonness of the bet, the froth and bubble in the commentary box, the incessant live-odds updates on the scoreboard, the rotation of gambling advertisements on the television broadcast and the fact that both teams are sponsored by corporate bookmakers said a lot about Australian sport in 2011.

Like his brother, Reverend Tim Costello is an Essendon supporter. He was watching the game on television and it left a sour taste. “There’s no question that if the bets get big enough, people will start throwing games,” he tells me. “When there’s so much money at stake, the corruption follows inexorably. While gambling is a part of life, there’s a vice dimension that drops, compromises and changes what should be family and children’s passions. To literally hand it over to gambling organisations is a profound shift in what sport has previously been about.”

Neil Evans is the public face of Centrebet. His organisation will accept a bet on pretty much anything. Their federal-election markets garner such coverage that Evans is occasionally referred to as a ‘political analyst’. Centrebet has released markets on the national unemployment rate, the colour of Queen Elizabeth’s hat at her grandson’s wedding, and the World Sauna Championships held in Finland. On the flip side, their plan to offer betting on the permutations of the Australian stock exchange was recently rejected by ASIC.

“I think it was us, yeah,” Evans says, when asked about the Essendon bet. His sentences have the same bony tenor and laconic cadence as you hear on racetracks and in TABs. “The people turning that sort of money over may be, say, five people in the entire Australasian set-up. They’re risking a fortune to win a tiny bit. Ninety-nine times out of 100 they win, these people.”

“When people have a go at us, what annoys me most is the hypocrisy. You get sporting organisations sitting on their hands, who, when the cameras are rolling, are saying ‘We’ve got to be responsible, there’s too much spruiking of betting.’ But they’re the first people on the phone to try and do deals and have a bet themselves.”

In March 2008, with James Packer’s Crown Limited bankrolling it, Betfair won a unanimous High Court decision which deemed it unconstitutional to prohibit bookmakers from advertising in one state and operating in another. Suddenly there were no state boundaries, the shackles were off and the land grab was on. “It was the most important thing to happen in 150 years of bookmaking in Australia,” says Betstar’s Alan Eskander. “It kick-started the life-cycle of our industry.”

The global financial crisis had also struck. Banks, fast-food chains and insurance companies scaled back their marketing considerably. The bookmakers, a curiously recession-proof lot, embarked on a blizzard of advertising, as well as thinking laterally in terms of sponsorship.

Their market was voracious, if untapped. Australians are the most fearless gamblers in the world. A recent report in the Economist indicated that, on average, every adult Australian loses just under $1300 per year. As a nation, we drop $22 billion per year on the punt, nearly five times what we spend on foreign aid. “Australians love it,” Eskander says. “It’s how we’ve been brought up, it’s part of our culture, part of our folklore.”

Everything was happening at once. Victoria introduced legislation requiring bookmakers offering markets on local events to obtain the approval of the relevant sports body. It gave organisations such Cricket Australia the power of veto over, say, bets on the number of cricketers wearing sunglasses or sporting hairpieces. The authorities would be privy to financial information, including betting sheets. It also afforded them a right to a cut from the turnover on their events, thought to be around 5%.

But it was quid pro quo. The trade-off guaranteed greater brand awareness, via official websites, team jumpers, grass signage, advertising hoardings and scoreboards. Most importantly, bookies could plug their wares during television and radio broadcasts, subject to the approval of the sport’s governing body. Organisations such as the AFL decided that they needed the bookmakers inside the tent, pissing out.

The NRL goes giddy when 20,000 people pass through its turnstiles. Without league clubs and their pokie machines, which subsidise the game to the tune of $40 million per year, it would have gone the way of the National Basketball League. If not for a revolving roster of meaningless limited-overs games, Australian cricket would be on its knees.

The AFL, however, which recently negotiated a $1.25 billion broadcasting rights deal, is awash with cash. It is also blessed with sweeping powers to keep tabs on anyone who could bring it into disrepute. It employs a full-time integrity officer, intelligence co-ordinator (a former UN investigator) and four investigations officers, all former high-ranking policemen. All have access to TAB CCTV cameras, together with the bank details, ISP addresses and phone records of players and officials.

The AFL pursued transgressors with the utmost vigilance and a scant sense of irony. Early investigations were underwhelming – a trainee timekeeper pinged for a $5 bet represented a typical catch. But in July, the crack investigation team netted its first big fish: Collingwood’s Heath Shaw, who was caught backing his captain to snare the first goal. “These days you can’t get away with anything,” said Shaw, en route to an eight-week ban. Soon after, they nabbed Essendon assistant coach Dean Wallis, who’d staked a trilogy of bets whilst clad in his club tracksuit. There are 1500 accredited journalists who cover AFL football – three times as many as those covering federal politics – and they all seemed to be at this typically po-faced press conference. “Dean, I guess the first thing to ask is, why?” a reporter asked. A pause. “Yeah, that’s the million-dollar question.”

Many bookmakers will tell you that the AFL’s northern neighbours have dragged the chain a little in comparison. Rugby League, an uncomplicated game that strikes you as very difficult to fiddle with, has nonetheless been scarred by recent scandals, many of which relate to exotic betting. Exotic bets, which cover permutations such as who scores the first try, kicks the most goals or has the most possessions, constitute about 5% of bookmakers’ total revenue. “They’re very popular in terms of numbers but most of the time they’re popular with $20-breakout punters,” says Evans.

But they’re also popular with lurk merchants. Four men, including player Ryan Tandy, were arrested last year following an NRL game between North Queensland and Canterbury. Ninety-five per cent of bets placed on the ‘first scoring play’ were for the unusual option of a penalty goal. Tandy himself allegedly stood to win more than $100,000 had the rort succeeded but it went the way of the pear when North Queensland opted for a try.

It was no one-off. NSW Police recently set up ‘Strikeforce Suburb’ to probe at least six other games that attracted highly irregular betting. The NRL has since exercised its power to veto certain exotic bets, including banning wagering on the first and last scoring play of the second half, together with the number of field goals. It has also prohibited betting on impending suspensions and which coach would next be sacked, both of which are prone to leaks.

But does the tunnel vision of the AFL and NRL in thwarting possible cons come at the expense of wider questions of integrity? Our sporting bodies, says Charles Livingstone from Monash University’s Department of Health Social Science, “don’t seem to care about the effects the aggressive marketing, which they’ve given the green light to, is having on young spectators. My son and his friends all talk about the game increasingly in terms of the odds. How they construe the game is now through the live-odds updates, whether it’s on the big screen or on TV.”

He has an unlikely ally. In December Jeff Kennett will vacate the Hawthorn Football Club presidency, having presided over a club that owned the third-most lucrative pokies venue in Victoria. Kennett also juggles his role as the chairman of beyondblue, whose website tells us three out of four people with a gambling problem are at risk of developing depression, with his board position at Amtek, which services pokie machines. But the former ad man finds the onslaught particularly repellent. “The worst thing is the intrusion of sports betting operators, where they have the odds now pushed in your face at the ground, on the TV and on radio,” he told the Herald Sun. “It is just shocking because it doesn’t discriminate … Young children are getting it at five, six and seven.”

Alan Eskander has an intriguing take on this. “If it was my own children and they starting asking questions about odds, I’d be encouraged by that,” he says. “I would welcome the dialogue. I don’t want the topic to be taboo. I want them to understand the dangers and perils of having a bet.”

David Schwarz never had that father–son chat. When he was eight, his dad was shot dead in front of him. By the time his professional AFL career petered out, he was virtually a professional gambler. Within a couple of years, he had blown every penny he’d made from football, upwards of $4 million.

Schwarz is now a commentator and responsible gambling ambassador for the Australian Leisure and Hospitality Group. “I’m a broadcaster and there’s nothing more infuriating than having to give updates of odds,” he told SBS’s Insight. “I find it embarrassing. [But] whilst the money’s coming in from betting agencies to government, to the codes, to the associations, they’re almost drunk on it. I think the AFL could pull some of their weight – and they’ve got a fair bit of it – to minimise the impact that it is having on kids.”

It’s not just the kids, however. If you have the wherewithal to part with $1 million on a Saturday evening, you’re unlikely to be swayed by a yobbish 30-second ad in prime time. Accordingly, the advertisements are unashamedly pitched at the hobby punter, the dabbler who perhaps considers himself a cut above the pokie set.

They’re obviously working. It’s estimated that the revenue generated by sports betting in Australia will top $600 million by the end of 2011, up from $264 million in 2006. Its share of the Australian gambling industry is growing annually at 24 times the rate of horseracing.

Its share of the problem-gambling market continues to spike as well. “In the last year, there’s been about a 70% increase in the number of young males presenting with sports betting problems,” says Alex Blaszczynski, a professor of clinical psychology at the University of Sydney. “Because gambling’s been increasingly integrated into general conversation, many novices now think it’s part and parcel of the excitement of watching sport. They’re hearing it constantly promoted. Add in the accessibility of internet betting and suddenly you have a deadly recipe. And now we’ve got iPads, smart phones, high-speed internet – all of which make it very easy to place multiple and large bets.”

When the advertising free-for-all kicked off in late 2008, Australian cricket fans copped the full brunt. At any given time, there seemed to be an entire XI of former cricketers in the Channel Nine commentary box and they were all at it, debating the merits of various bets and reminding us to gamble responsibly. A flood of complaints prompted an investigation by the Advertising Standards Bureau but they found the coverage did not breach ethical codes, concluding: “Children would be unlikely to pay attention to such commentary.”

“My personal view is that betting odds can tell a story about a game of cricket,” Cricket Australia chief James Sutherland told the Fairfax press earlier this year. “I think they can tell a story about a game of footy as well, but cricket is unusual in the sense that one team has batted and everyone wants to know who is winning.” Notwithstanding the educational and commercial benefits, Cricket Australia has since reined in the Channel Nine spruikers, with commentators now having to preface and sign off on each plug, rather than simply spinning it into the commentary. They’re also restricted to mentioning betting fluctuations only during breaks in play and when something significant happens, such as a batting collapse or a thunderstorm. 

But the bookies will still be at the forefront this summer, courtesy of the ‘Betfair Blog’ on Cricket Australia’s website, through sponsoring the ‘hot spot’ technology, which uses infra-red cameras for accuracy, and by rolling out a barrage of ads. Cricket Australia will continue its fact-sharing arrangements with as many as ten corporate bookmakers. And if you’ve got enough blood, you can still bet your weekly salary on whether Michael Clarke’s next scoring shot will be a boundary. “I think it works fine,” Sutherland continued. “I can understand some people’s concerns about it but I think it has been managed very effectively.”

Federal politicians remain unconvinced and are desperate to wrestle back some sort of control. The Joint Select Committee on Gambling Reform expressed alarm at the ‘insidious’ hold that gambling has on Australian sport and called on sporting bodies, broadcasters and bookmakers to reduce the practice of live odds or implement legislation by June 2012.

But the horse may already have bolted. Gambling is so entrenched in Australian sport that tightening the reins may well prove calamitous. As Centrebet’s Neil Evans says, “Organisations have backed themselves into a corner where they suddenly realise there’s a lot of commercial opportunity to use bookmakers to prop up clubs who desperately need the money.” The AFL, the NRL, Cricket Australia, Football Federation Australia, Golf Australia, Basketball Australia, the Formula One Grand Prix and the MotoGP all have significant commercial agreements with corporate bookmakers. In the AFL, gambling is also a font of money at club level; in 2011, only the Gold Coast Suns and Sydney Swans have no connection whatsoever with bookies.

Besides, as everyone says through gritted teeth, a transparent bookmaking industry is an essential check and balance. As Evans says, “Ban this, ban that, it’s not the way to go. Then we get dragged into illegal, under-the-counter betting like we have in India, which has already dragged cricket into the sewer.”

Channel Nine recently screened one of those documentaries where sporting champions of yore reflect on their golden youths. “It was a happier time,” one of the old-timers opined. “It was a more honest time, before money came along and ruined everything. It was a more innocent time.” 

Except it wasn’t, of course. Philip Morris and Benson & Hedges were the forerunners of Centrebet and TAB Sportsbet. Back in the day, you couldn’t legally punt on your own team but you could polish off the slab you’d carried in on your shoulder. You couldn’t bet live in the running but you could call a fellow player a ‘black cunt’ with impunity. As a player, you could break jaws, crush testicles and cultivate a knockabout personality and they’d give you a state funeral.

But everyone knew where they stood. Sport didn’t purport to be anything but a contest and a diversion. The real seismic shift in Australian sport has been at the margins, in the commercial conflicts of interest that blur and dissemble. The player manager–cum–commentator; the commissioner with the catering contract; the NRL fan shifting uneasily in their seat at Centrebet Stadium; the president with a breakfast radio show, a quiz show, a newspaper column and a footy club with hundreds of pokie machines in the city’s poorest suburb; the NRL commentator and gambling addict who tells us we can bet in-running but to bet responsibly. Everyone is conflicted. “Everyone,” as Tim Costello says, “is captured in one way or another.”

Jonathan Horn
Jonathan Horn is a sportswriter who has covered the Olympics and the Tour de France. In 2010 he was a finalist in two prize categories at the Australian Sports Commission’s media awards.

Cover: November 2011

November 2011

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