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Chapter 2

Key issues around the promotion of sports betting

2.1        Over the course of its inquiry, the committee sought updates on matters covered by its comprehensive 2011 report, Interactive and online gambling and gambling advertising, which delved into most of this inquiry's terms of reference. The key concerns that emerged during the current inquiry centred around the pervasive nature of the promotion of sports betting, its integration into sporting commentary and the possible effects on children and vulnerable people from this high level of exposure.

Wagering industry

2.2        In its 2010 report, the Productivity Commission (PC) estimated that sports betting represented 1.2 per cent of the $19 billion spent on gambling and that sports wagering has experienced continued rapid growth since the mid 1990s.[1] The committee's previous report cited research that for the 12 months to September 2011 sports betting expenditure increased from $0.4 billion to $0.8 billion.[2]

2.3        Mr Cormac Barry, Chief Executive Officer, Sportsbet and Chairman, Australian Wagering Council[3] (AWC) told the committee that the members of the AWC collectively have two million members.[4] While acknowledging the significant increase in the amount of advertising, Mr Barry added that the annual growth in wagering turnover over the past five years has been in line with the growth of the economy at four to five per cent per year. He informed the committee that within overall wagering there has been a shift from the traditional channels for placing bets through retail TABs, by telephone and at racetracks to online betting.[5] 40 per cent of Australian wagering now takes place online, 40-45 per cent takes place at the TAB and only a small proportion occurs over the phone.[6]

2.4        Mr Barry stressed that the ability to advertise, along with increased competition and improvement in products, has led to more Australians placing their bets with onshore operators.[7]

High levels of sports betting advertising

2.5        The committee recognises growing community concern with the proliferation of sports betting advertising over recent years. During a sporting broadcast there are not only sports betting advertisements, and live odds updates but betting in some cases became part of the sporting commentary. Even at venues sports fans are exposed to gambling advertising, including live odds updates and sports betting signage.

Battle for market share

2.6        The AWC explained that the high levels of sports betting advertising are a function of a highly competitive market. Customers have low brand loyalty and are on the lookout for the best deals given the low costs of switching between domestic and international providers. In addition:

Due to restrictions placed on the industry from operating land-based outlets, advertising is essential to enable the industry to genuinely compete with land-based retail outlets, such as TABs.[8]

2.7        Mr Cormac Barry provided further background and told the committee that the high levels of advertising reflect a 'battle for market share within the wagering sector' following the 2008 decision of the High Court which opened up advertising for corporate bookmakers. He submitted that 'sports betting is a niche pursuit' which in his view will remain the case 'no matter how much advertising the industry does'.[9] He emphasised that the number of people gambling on sports is not increasing but there is a shift from the traditional channels of placing bets to online betting.[10]

2.8        Mr Barry told the committee that the primary objective of advertising is to gain market share and take business from competitors within the sector.[11] He added that this is achieved by the advertising raising brand awareness with the people who bet: 'it is not necessarily to create new betters'.[12] To reinforce this point he cited evidence that the wagering industry is not growing in real terms.[13] Mr Giles Thompson, Chief Executive Officer, Betfair; and Treasurer, AWC, confirmed that advertising is targeting 'people who are currently betting' and 'those who are interested in betting'.[14]

2.9        Associate Professor Samantha Thomas pointed out that the argument from the industry that they are only targeting existing gamblers is counterintuitive for a business where you would expect they would be looking to grow their market. She explained that the same argument was used by the tobacco industry: 'they were not trying to get more people to smoke, they were or are just trying to get people to switch brands'.[15]

The amount of wagering advertising in a family friendly environment

2.10      The committee heard how this avalanche of sports betting advertising is overly intrusive and ruining fans' enjoyment of the game. However, over and above the annoyance factor, are concerns which focus on the normalisation effect of industry marketing strategies, particularly on children.[16] Evidence showed clear concern about the high level of exposure of children to the promotion of an adult product in what is marketed as a family friendly environment.[17]

2.11      During its last inquiry the committee was briefed on research which showed the high level of exposure to gambling advertising during broadcasts and at venues and the embedding of marketing strategies in the game.[18] The research conducted by Associate Professor Samantha Thomas and Associate Professor Colin McLeod found that supporters at a match were exposed to an average of 341 minutes of gambling advertising when simultaneous promotions were counted separately.[19]

2.12      Ms Heather Gridley, Manager, Public Interest, Australian Psychological Society (APS) referred to this research and stated:

So you are talking about an awful lot of messages. Once again, they probably would not be there if they were not meant to be effective, and you cannot imagine that children are immune from that. And I think there is that aspect of the language itself becoming part of it. It is very hard to talk about sport now without talking about what are the odds or who you are betting on, who you are tipping and all those sorts of things. There is nothing wrong with that in itself, but if that becomes the only language in which we speak about sport, it is hard to imagine children being immune to that.[20]

Normalisation effect

2.13      During the committee's previous inquiry it heard that while the advertising is not directly marketed to children and children cannot consume the product, they are nevertheless absorbing the message. In addition, the constant promotion of live odds at matches and within game play during broadcasts may have a normalising effect on children. This is because there is a blurring between advertising and the game so children may consider the live odds, for example, to be part of the game. As Associate Professor Samantha Thomas noted during the previous inquiry when asked about the possible long-term effects on children:

We can probably make an educated guess, that, as with those products [tobacco, alcohol and junk food]. Kids are being softened to this. It is becoming part of their talk...Kids are consuming those messages. They are consuming the brands. What we do not know is what long-term impact it is having on them and what will happen over time in terms of encouraging them to engage in gambling...[21]

2.14      The APS emphasised that the amount of gambling advertising has the effect of normalising it by making it an integral part of sport which influences the attitudes of children and young people.[22] This was confirmed by Dr Christopher Hunt from the Gambling Treatment Clinic at the University of Sydney who noted that traditionally, sports such as the AFL and NRL have been marketed towards families and:

By normalising wagering associated with these sports, there is a high risk that the prevalence of problem gambling will increase as generations who have grown up with ubiquitous discussions of gambling around sport reach the legal gambling age.[23]

Brand recognition

2.15      While recognising there needs to be more research on the effect of gambling advertising on children, Associate Professor Thomas indicated that it should not prevent action on something that is 'potentially incredibly problematic for children and vulnerable members of our community'.[24] She pointed to preliminary data that may be indicative of some of the harm:

For example, one of the things we know from our research with young people is that they have a very high awareness and recall of brands. This is unprompted. When we ask young people whether or not they know of any gambling-industry brands they are able to come up with at least two or three names of companies.[25] That is concerning for us. Quite often, children also have a much higher recall of advertising and brand names than their parents and adults generally. So certainly we see that children are recognising and are aware of the products and companies, and this obviously is concerning for us—particularly when thinking about long-term behaviours and harm.[26]

2.16      The committee notes the picture below,[27] which shows children obtaining an autograph from Mr Tom Waterhouse. The picture indicates how well recognised he is.

Vulnerability of children to advertising

2.17      The committee heard that young people are at risk as they are particularly susceptible to advertising. In 2010 the Productivity Commission pointed out Canadian research that found:

42 per cent of youth reported that gambling advertisements made them want to try gambling and that 11 per cent of males and 3 per cent of females sometimes or often gambled after seeing an advertisement (Derevensky et al 2007, p. 27).[28]

2.18      The Victorian Responsible Gambling Foundation agreed that the concern about exposing children to high levels of gambling advertising is valid because:

• research shows children under 11 have difficulty distinguishing differences between advertising and program content. In particular, children under 10 have difficulty understanding the persuasive intent in advertising;
• recent research indicates that it is successful in creating an attitude in those aged 13-18 that gambling is 'entertaining, harmless and convivial' which undermines the development of a responsible approach to gambling;
• the use of sports stars or media celebrities to promote gambling and the use of social media contributes to the difficulty young people have separating marketing material from neutral content.[29]

2.19      The APS summarised that young people are particularly at risk of harm because:

• they are already more susceptible to gambling advertising (Lamont, Hing and Gainsbury, 2011) and vulnerable to gambling, with research showing that a substantial proportion of secondary students indicate that they gamble online (Delfabbro et al, 2005);
• of their familiarity with and widespread use of emerging technology (particularly mobile phones) in all aspects of their lives;
• of fewer checks for age appropriateness in forms of sport gambling (apart from the use of a credit card), and the likelihood it can be engaged in in isolation from others (such as parents or other adults);
• the use of young people's sporting 'heroes' by sporting organisations to promote gambling opportunities; and
• young people growing up with sports betting as an integral and 'normal' part of their experience of sport, particularly those sports that are popular among young people (such as AFL). This includes the likelihood that young people have witnessed their parents and other adults wagering, so are more likely to see it as a socially acceptable activity.[30]

2.20      The APS advised that, while there has not been a lot of research on the possible effects of the increased availability of gambling opportunities and the promotion of sports betting, gambling research generally shows that:

...an increase in exposure to gambling advertising and opportunities is a risk factor for the development of gambling problems, particularly among vulnerable groups in the community.[31]

Minimising possible harm

2.21      Associate Professor Thomas emphasised that the approach to gambling marketing should be to minimise and, more importantly, prevent harm:

While industry claims that the point is that advertising should not target children, in my opinion the actual point is that children should not be exposed to advertising for this potentially harmful product—this includes in sporting matches, which are, as you know, marketed as being family friendly. The national preventative task force argued in relation to obesity, alcohol and tobacco that, where the market is failing, or governments need to act to protect our health, particularly the health of children and adolescents, standards need to be established, regulations imposed where necessary and consumer education provided. They go on to say that balanced, effective regulation and legislation, usually alongside effective and sustained public education, has been an essential element of most prevention programs to date and there is no reason this should not also apply to gambling.[32]

2.22      This was supported by the APS which spoke about the need to restrict advertising to ensure less harm:

I think that we have dealt with tobacco. It is a really good example, because people still smoke and smoking is not illegal. But we have really restricted advertising and, lo and behold!, people—the television stations and sporting organisations—have managed to get sponsorship from other places. They haven't gone under. So I think it ought to be possible to do something different with these kinds of things. Without being a nanny state, it should still be possible to look at restricting these things to the point where they are going to do the least harm, and if they were going to do the least harm then probably they would not be worth investing in as advertising. So there is a balance there.[33]

2.23      Relationships Australia believes it is logical to conclude that any problems created by exposing children to gambling advertising can only grow as the amount of such advertising increases:

In spite of lack of evidence, it is reasonable to surmise that early and frequent exposure to sports betting is likely to have significant influence on the gambling habits, and therefore future wellbeing, of young people.[34]

Concerns about other subgroups

2.24      Concerns were also expressed about the effects of the high level of exposure to wagering advertising on the gambling behaviour of young men and problem gamblers.[35]

Young men

2.25      The Victorian Responsible Gambling Foundation advised that the profile of those betting on sport is primarily young men in their twenties and early thirties.[36] The committee heard through its previous inquiry that sports betting advertising has contributed to young men watching sport through a 'gambling prism'. Research showed that young men felt bombarded, targeted and unable to escape the advertising.[37] As argued by FamilyVoice Australia, sports fans, predominantly young men, 'now talk more about "the punt" than the game.'[38]

2.26      Associate Professor Samantha Thomas told the committee her research indicated that young men talk about feeling isolated from their peer group if they do not gamble. She pointed out this is concerning as it is similar to alcohol 'when you did not want to be the only guy in the group that did not drink'.[39] She reported that young men will choose a sporting match to attend where team preferences are not an issue and use gambling on the match as a mechanism for socialising. Associate Professor Thomas indicated that as with other public health issues, these social elements make such behaviour harder to change. Young men also talk about sports betting as a skill rather than luck based activity.[40]

Problem gamblers

2.27      Dr Christopher Hunt noted that the confluence of wagering and sport has existed in horse and dog racing for many decades but most other sports have existed independently of wagering. If wagering is seen as part of the sport there is a high risk that over time wagering will be taken up by more people than presently engage in it. Dr Hunt noted that while not everyone who takes up wagering will go on to develop a gambling problem, a proportion will and therefore the incidence of problem gambling is likely to increase over time.[41] This view was supported by the APS.[42]

2.28      The Victorian Responsible Gambling Foundation indicated that information from the Foundation's counselling services databases and feedback from counsellors is providing 'indicative evidence that gamblers presenting for help with sports gambling are growing in total numbers and as a percentage of all clients'.[43]

2.29      The Royal Australian and New Zealand College of Psychiatrists indicated there is strong evidence of the relationship between the advertisement of products that lead to gambling and subsequent problem gambling behaviour.[44]

Integration of gambling into the match

2.30      Associate Professor Thomas emphasised to the committee that the issue is not just about the promotion of live odds but there is a 'relative tsunami of the promotion of gambling products through multiple marketing channels within our sporting matches'.[45] Associate Professor Thomas explained that in line with their expectations they have seen a shift towards increased embedding of advertising within sporting matches. She expressed particular concern about marketing promotions that seek to create 'brand awareness' through the integration of promotional activities with match broadcasts. Evidence from the areas of alcohol and tobacco indicate that it is more difficult for individuals, both adults and children, to separate out and/or avoid these 'embedded' forms of marketing.[46] She added:

It is suggested that by the age of about five the majority of children are able to differentiate between programming content and television commercials, although they may not be able to understand the persuasive intent of advertisements until they are about seven or eight years of age. However, the commercial intention behind sponsorship is conceptually less well understood by the children. Only when they reach the age of about 12 [do] they understand the role of sponsorship in influencing consumption attitudes and behaviours.[47]

2.31      The Gambling Treatment Clinic at the University of Sydney noted that the 'constant intrusion of wagering into the sporting discourse has the effect of making wagering appear to be an integral and normal part of enjoying sports'.[48]

Committee view

2.32      The committee shares the concern in the community about the promotion and advertising of sports betting and the influence it may be having on children and young people. NRL and AFL in particular market themselves as family friendly sports and there are legitimate concerns about the longer term effects of exposing children to such a high level of sporting betting advertising. The committee acknowledges the intention by the industry and sports not to market directly to children but with the high level of gambling advertising and the many forms of marketing (signage, uniforms, general gambling advertising etc) the committee is also concerned about the level of indirect marketing on children and its possible effects. It believes a cautious approach is necessary. The current rules around broadcasting and exemptions for gambling advertising are detailed below as well as the policies of wagering and sport in relation to children and vulnerable groups.

Current broadcasting restrictions and exemptions for gambling advertising

2.33      Free TV informed the committee about current broadcasting restrictions which have been targeted to ensure that gambling and sports betting advertisements are not placed in programs likely to have a substantial audience of children. While gambling advertisements are not permitted during G classification periods, exemptions are made for news, current affairs and sporting programs.[49] Broadcasters pointed out that these restrictions have resulted in low levels of complaints.[50]

2.34      The Productivity Commission advised that the exemption appears to be inconsistent with the general principles concerning exposure to gambling by children and noted:

That inconsistency may be becoming more marked as the frequency of in-commentary gambling promotions during televised sport increases (through, for example, continuously posted odds and the conspicuous identification of betting agencies).[51]

2.35      Free TV argued that sporting events on free to air TV are primarily watched by adults. Children aged 5-17 made up less than 12 per cent of the total viewing audience of any of the top 10 sporting events in 2012. In addition, of those watching, the majority[52] were viewing with an adult.[53] Mr Andrew Maiden, Chief Executive Officer, Australian Subscription Television and Radio Association (ASTRA) stated that to put the data in context:

...the average number of children under 18 watching any of those top-50 li[v]e sports broadcasts last year was something like 39,000. So, relative to our reach—which is 2.2 million homes, or seven million Australians—we submit that number is relatively small.[54]

2.36      Ms Bridget Fair, Group Chief, Corporate and Regulatory Affairs, Seven West Media admitted that there are likely to be more children watching a sporting program like the AFL than a program directed specifically at children. However, she stressed that the viewing experience is very different.[55] Mr Scott Briggs, Director of Commercial and Regulatory Affairs, Nine Entertainment Co. advised the committee that for a Friday night NRL game there would be around 50,000 children aged 17 and below from an audience of 700,000. He indicated this would be the same numbers for some of their children's programs.[56]

2.37      The committee notes data indicating that AFL is one of the top three television programs watched by children under 14 years.[57]

Wagering sector

2.38      The AWC accepted that advertising must be conducted in a socially responsible manner 'and must be of a reasonable limit so as not to contribute to the encouragement of gambling, particularly amongst the most vulnerable'.[58] It stressed that 'AWC members do not directly target their industry advertising and promotional strategies to children'.[59] Mr Cormac Barry, Chief Executive Officer, Sportsbet Pty Ltd; and Chairman, AWC, informed the committee of the sophisticated mechanisms in place to verify the age of people who bet with them. In addition they use responsible gambling messages in the promotion of their product.[60]

2.39      Mr Barry highlighted the data from Free TV indicating that there are low numbers of children watching sport and most are accompanied by an adult:

I think there is a role here for parents to educate children about the risks associated with gambling, and that would be consistent with other products in society, such as alcohol or other adult related issues, like sex education and so on. I do not think it is possible in the modern age for us to create a bubble around our children, where they will not be exposed to adult products.[61]

2.40      Mr Giles Thompson, Chief Executive Officer, Betfair, and Treasurer, AWC concluded that:

The key thing here is that advertising should not be targeted at children. That is the key. That is the fundamental point. Banning it in G-rated program is a way of trying to achieve that. That does not necessarily mean that it is the best way to do it, but it is a way of trying to achieve that. What are we trying to achieve? We are trying to make sure that advertising does not target children.[62]

Sport

2.41      In relation to the exposure and influence on children, the Coalition of Major Professional and Participation Sports (COMPPS) commented:

The COMPPS members are aware of concerns that the promotion of live odds during sports coverage risks normalising gambling behaviour. This was a factor in the recent decision to remove references to live odds from in-play broadcasts and in stadia, and to restrict commentators from discussing live odds. There was a sense that some commentators were seen as role models and that it was inappropriate for them to be involved in discussing live odds.[63]

2.42      Sports emphasised that guidelines have been put in place to ensure that sports betting should not be targeted at minors or provide products targeted at minors.[64] The NRL highlighted their wish to take a proactive and cooperative approach to put agreed principles and safeguards in place.[65] Mr John Brady, General Manager, Media and Communications, NRL, acknowledged the difficulty with developing the right messages given the wide audience:

We are very, very mindful of and absolutely committed to the integrity of our game. We are very mindful of and very committed to the welfare of our community participants—the people who play the game at a junior level; the people who come to the game—and we try to have systems in place that communicate a responsible message to those people. To go to the point that was raised earlier in this hearing, some of those messages can be difficult because ours is a game that transcends every age group and a large part of society. We do work very hard to internally regulate, and we do very often work with government to try and make sure that we are heading in the right direction.[66]

Committee view

2.43      The committee supports the approach of not directly targeting children but is concerned with the high level of indirect marketing and its effects on children. While the industry[67] and sports[68] argued it is a legal product, gambling advertising is all around us and it is difficult to ensure it does not reach children; the committee makes the point that what is promoted at the game is able to be controlled by the stakeholders. The industry argued that policies need to be based on evidence.[69] As policy can often take time to catch up with new marketing strategies, quality peer reviewed research takes time and given the possible effects could include increased problem gambling, the committee believes a precautionary approach regarding the exposure of children and vulnerable people to gambling advertising is warranted. Chapter 3 will detail the response underway.

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