Shining A Light On The Wagering Landscape

During the course of this week, we will be running Q & A's with CEOs from the major wagering operators, aimed at shining a light on the state of the wagering landscape, both now and into the future.

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The future outlook of the Australian wagering industry really is in the balance.

With the lucrative Covid-19 window now but a distant memory, the softening of turnover, in the vicinity of 15-20 percent across the board, is due to a variety of reasons, some self-inflicted and some not.

Profound cost of living pressures is clearly a significant factor for the downturn but so too is the realisation that punters are walking away in droves, hamstrung by a wagering landscape which is rapidly losing its appeal and competitive edge.

READ | Opinion: The seismic $1 billion threat to racing

With taxes ballooning to prohibitive levels, wagering operators, either in a bid to remain viable or preserve shareholder expectations, are passing these costs on to the customer.

The trickle-down effect is instant.

Punters — the "commercial" ones at least, lose their money quicker and ultimately disengage while the high volume, low margin players become "non-viable" due to the prohibitive taxation levels being incurred.

Like any ecosystem, the success of racing, with so many moving parts, is a fine balance.

But it starts and stops with the punter.

It should encourage and engage new customers via rewarding returns and innovative products which as a result funds the racing industry at a level which ensures long-term sustainability and success.

And yes, governments should receive reasonable tax returns while wagering operators, regardless of their origin, should be profitable to ensure competition, innovation and reinvestment into the industry.

What we are witnessing at the moment is evidence that the ecosystem is out of kilter and without intervention will only serve to get worse.

And in a way, power brokers know as much.

Last year, the NSW Government made sweeping changes to their Point of Consumption taxation projections over the next five years, dramatically curbing their initial lofty expectations. And other jurisdictions are doing the same.

A basic understanding of "The Laffer Curve" explains the relationship between tax rates and tax revenue.

It details that lifting taxation rates doesn't maximise taxation revenue and in time can ultimately work against you, inviting other harmful consequences to the surface.

READ | Doomsday scenario for punters over wagering tax surge

In short, the current model focuses on raking in what's available yesterday and tomorrow, not in five or even ten years' time when it will be needed most.

If you go to the well too often at some stage it dries up.

Rest assured, that behind closed doors, there isn't a jurisdiction or code that isn't currently grappling with the consequences and ramifications of the downturn in wagering and how to best pivot and navigate.

In a bid to try and best contextualise the challenges the world of wagering faces – not just now but into the future – we've leant on four prominent CEOs with vast experience, who starting Monday, will weigh in on the debate in their own choice words.

They include Tristan Merlehan (Topsport), Dean Shannon (Ladbrokes), Barni Evans (Sportsbet) and Adam Rytenskild (Tabcorp).