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Environment and Communications Legislation Committee
07/03/2017

BURT, Mr Richard, Chief Executive Officer, Racing and Wagering Western Australia

MILLER, Mr Glenn, Manager, Compliance and Legal, Racing and Wagering Western Australia

[13:56]

Evidence was taken via teleconference—

CHAIR: While we are waiting for the teleconference, Mr McGauran wanted to table documents; are we happy to table them?

Unidentified speaker: Yes.

CHAIR: Dr Thomas referred to three reports earlier that are yet to be published or have just been published; are we happy to table them?

Unidentified speaker: Yes.

CHAIR: Thank you very much, Mr Burt and Mr Miller, for joining us today. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. I invite you to make a brief opening statement and then the committee will ask you some questions.

Mr Hoskins : Racing and Wagering Western Australia is a statutory authority established under the Racing and Wagering Act of 2003. The organisation regulates and supervises racing in Western Australia. Its functions include fostering the development, promoting the welfare and ensuring the integrity of metropolitan and country thoroughbred, harness and greyhound racing in Western Australia. It is also responsible for the conduct of off-course wagering through the TAB and it conducts totalisator and fixed odds wagering on racing and sports betting. Importantly, profits from the TAB that are generated through its retail, online and mobile platforms are the majority of the funding that feeds a number of organisations in Western Australia, including our vast race club network of some 52 race clubs, as well as funding sports to the tune of about $5 million in Western Australia.

Overall, funding to the racing industry and sports industry is about $150 million a year. There is a further $32 million in administrative costs of administering sport and racing, so it is a fairly important activity that funds a lot of economic contribution in Western Australia. There are over 33,000 people participating in racing in Western Australia, and there is in excess of $551 million in direct expenditure generated throughout metropolitan and regional WA. The subject that we are talking about today with the committee is a very important one to the sustainability of our wagering and the beneficiaries that benefit from that activity in the state.

Senator KAKOSCHKE-MOORE: Thank you, Mr Burt. I am just curious, because we do not have a submission from your organisation, about your views on a number of provisions within the bill that we are looking at today. For example, what are your views on banning inducements?

Mr Burt : We have a number of comments that we would like to, either by responding to each question you might raise or by raising them ourselves, raise. Specifically, with regard to inducements, we support the National Consumer Protection Framework. We noticed that there is a need for this sort of national approach because there are too many inconsistencies that are currently at work with state based regulation of wagering, so we support that.

Senator KAKOSCHKE-MOORE: Would you support online sports betting being regulated by a national regulator rather than on a state-by-state basis?

Mr Burt : We certainly believe that there is a need for a federal regulator. But, obviously, that would be mostly applicable to the national consumer framework and also the regulation of the legislation that is put in place. How this interacts with state based regulators and legislation is something we have questions over.

Senator KAKOSCHKE-MOORE: I see. Can I just ask for your view on the proposed ban on credit betting?

Mr Burt : We fully support the banning of credit betting.

Senator XENOPHON: Mr Burt and Mr Miller, thank you for appearing, albeit by phone. Further to Senator Kakoschke-Moore's line of questioning, is it fair to say that Racing and Wagering WA has been hit pretty hard by the boom in online betting—that you really cannot compete on a level playing field with the sorts of odds they are offering and the instantaneous ability to bet that traditional racing does not offer?

Mr Burt : Funnily enough, our ability to compete purely on a price basis is not the issue. If you have the opportunity to look at our pricing, we are very competitive with national operators, so that is not our issue. Our issue is that we have an unlevel playing field. In fact, some of the principles that are actually at work with some of our competitors, we believe, are not as applicable, if you like, to the regulations that should be placed on wagering operators and that we, in fact, place on ourselves. It is probably less about the need to put regulations in place, from a competitive point of view, but much more about, from the point the legislation is trying to come from, having a national framework that is going to address harm minimisation and also remove some of the harm that the exposure of sports betting and gambling is creating in an explosive way at the moment.

Senator XENOPHON: How many oncourse bookmakers are left in your state?

Mr Burt : Very few.

Senator XENOPHON: How do they deal with so-called harm minimisation issues? They would get to know their patrons—their regulars—fairly well, wouldn't they?

Mr Burt : They do. There is no enforced regulations in Western Australia for harm minimisation, but they have regulated. The stewards regulate the bookmakers quite closely. They basically have a set fix of customers. There are limited numbers of people going to racetracks nowadays, so they do pretty much know their customers fairly well.

Senator XENOPHON: In terms of levelling that playing field, the complaint that I have had from people involved in the racing industry in my home state is that they have been starved of funds because the money has been soaked up by online bookmakers. What is your view of that? How do you level the playing field?

Do you demand a greater share of the revenue or are there currently mechanisms in place in Western Australia for a turnover-type tax so that money can go back into racing, which I acknowledge is quite a labour-intensive industry?

Mr Burt : There are certainly a number of issues that are caught up in this particular item. Our main concern is the lack of consistency between state and territory governments on an effective platform for offering online and mobile betting. Secondary to that, with increased competition and the laissez-faire effect of many of these operators with their inducements and—to be honest—the lack of compliance of many of them towards state regulations and even racing authorities' requirements under race field legislation, you end up with racing being marginalised. The senator proposes a point-of-consumption tax or other potential state-based taxes, and there are certainly ways that racing can try to sustain itself going forward. Racing & Wagering's recommendation is much more around the IGA in creating a level playing field where harm minimisation is dealt with at a federal level, where the ability to control credit betting is dealt with at a federal level and where the inducements are harmonised across states at a federal level. These important things that are catching up to what the product and the technology has created are what we are really focused on.

Senator XENOPHON: But your industry will continue to be in decline unless there is a levelling of the playing field, is that right?

Mr Burt : Certainly the funding will be impacted and racing employment and racing stakeholders will be impacted with the current trend of the explosion of sports betting. The main thing that we are trying to get in place are the levers, the drivers, that are going to create a more level playing field.

Senator XENOPHON: Thank you.

Senator CHISHOLM: I will try and frame this so as to not make a political point but, given the WA's state election is very close, I want to get an understanding of where the privatisation issue is with regard to Racing & Wagering WA.

Mr Burt : The government had committed to privatising the TAB prior to parliament being prorogued. We understand more through independent media that the other party has said that, given the racing industry supports privatisation, it will progress privatisation also. That outcome is obviously going to be determined in the next couple of weeks, I would imagine.

Senator CHISHOLM: Do you think that this legislation would have any potential impact on the value of Racing & Wagering Western Australia, if it was to become privatised?

Mr Burt : I think the value of a TAB is probably more determined by what the state government offers up for sale than necessarily the IGA in more immediate terms, because the playing field is already set with respect to the IGA. If one was to speculate 'Will the merger of TAB and Tabcorp take place? Will the IGA be further increased or will the impact of the IGA be tightened up to affect online players?' that may have some impact; however, I think at this stage it is more at the political process than the commercial in the privatisation of the TAB, so it is fairly early days.

Senator CHISHOLM: How many customers or clients do you have with online accounts?

Mr Burt : We have around 40,000 active accounts—these are people betting with us each month—and then we have a much greater number of people who we regard as potentially one-off customers throughout the period either betting on sports or racing, and we capture those over a 13-month period. They are a lesser frequency of customer and a longer tail.

Senator CHISHOLM: Does your organisation have any existing relationships with other betting agencies that operate in other jurisdictions?

Mr Burt : We do, of course. Because we are a small operator on a national scene, we have formal commingling arrangements for totalisator pools with Tabcorp through super Tab in Victoria and we also outsource our backend risk management to William Hill Australia for fixed-odds betting.

Senator WHISH-WILSON: We have heard evidence today from witnesses that a targeted reduction in advertising spend for online sports betting is needed, and Responsible Wagering Australia also agree with an overall reduction in advertising spending. What is the view of your organisations in relation to that?

Mr Burt : We would support that. We believe that the volume and the direct nature of the advertising by either offering inducements directly in media or the intent of it is going too far, and over recent years has built to a point where the industry has almost demonstrated a lack of ability to self-regulate, and that this would be an opportunity for the national regulator to have involvement.

Senator WHISH-WILSON: I am intrigued as to whether this call for reduced advertising spend is partly motivated by the competitive tensions or whether it is targeted at the potential harm that is being done. Are you prepared to comment on that?

Mr Burt : I am coming from the point, as CEO of RWWA, that it is a bad look for the organisation and the industry that when you turn on the television, as has been talked about in the media widely, the major theme during a sporting event or even outside a sporting event is gambling. As an organisation, we have been operating for 50 years and the explosion in advertising has occurred in the last five to 10 years. In that former period, gambling was a legal, recreational pastime and was able to take place very happily over that period both oncourse and off. There is a need for this more recent explosion to be controlled. To be honest, it is less about the competitive tension and the ability to direct that amount of funding; it is just inappropriate.

Senator WHISH-WILSON: Thank you for expressing that.

CHAIR: The impression that I get from your testability today is that because so much of this regulatory framework exists within the states, you feel that the most effective solution will be one that is crafted in consultation with both federal and state governments—is that correct?

Mr Burt : Yes.

Senator WHISH-WILSON: Just a follow-up question to my last one about advertising for online gaming, especially sports betting. I understand from Mr Conroy that there are discussions underway amongst members of Responsible Wagering Australia about a reduction in advertising spend. I presume your organisation would also support a voluntary reduction across entities. If that was not to occur, would you accept regulation on advertising spend?

Mr Burt : Yes, we would. We would naturally want to participate in the formation of those regulations to have input. But, yes, we would, philosophically.

CHAIR: Thank you very much, Mr Burt and Mr Miller for joining us today. My apologies that the committee is running a little behind time.

Mr Burt : That is quite all right, and thank you for the opportunity.