Recent published data shows Australians love to gamble. How much? The Economist magazine has just published figures showing that Australians gamble around $1,300 per head per annum. This data includes all forms of legalised gambling. On its own, this figure may not elicit much discussion – but when compared with other jurisdictions it becomes clear that Australia’s love affair with gambling puts it way ahead of all others. According to The Economist, the second highest per capita amount gambled is by Singaporeans at just under $1,200 per annum. In comparison, US adults legally gamble less than $400 per head each year.
Of course, one of the significant differences between Australia and many other jurisdictions is the wide variety of legalised gambling options available. Each of the eight Australian States and Territories has at least one casino. All but Western Australia have poker machines in pubs and clubs, plus wagering and fixed odds betting on horse races, sports betting and keno.
Yet with all these opportunities available, one company still believes there is growth available in an under-performing segment of the market. Victoria has recently issued a new keno licence following a rigorous tender process. Keno has been operating in Victoria since the mid-1990s but is the poor relation in the Victorian gambling market as the following figures show. Expenditure (player loss) is published each year in the annual report of the Victorian Commission for Gambling Regulation. By product type, expenditure in Victoria last year was:
- Poker machines in hotels and clubs $2,597 million
- Casino (including poker machines and table games) $1,320 million
- Wagering $769 million
- Lotteries $443 million
- Keno $5.4 million
- 1. Wagering includes sports betting but excludes expenditure with licensed bookmakers
While keno has performed poorly in Victoria, it has done much better in other Australian states. So why has keno failed in Victoria in comparison with other products? A number of hypotheses deserve consideration. These include:
- Since its inception it has been offered under an exclusive arrangement by a joint venture licensed by the Government and made up of two competing gambling companies (Tabcorp and Tatts)
- Its distribution is limited to pokie venues, of which there are just over 500 in Victoria (of which only about 60% offer keno)
- Because it can only be in pokie venues it is competing with poker machines which return at least 87% to players whereas keno returns a fixed 75%.
The new keno licence which has just been issued and which will take effect from April 2012 overcomes some of these limitations. Firstly, the network of available outlets has been expanded to about 3,000 as it will be allowed in a broader range of premises licensed to serve liquor – with or without poker machines – as well as wagering outlets. Also, any tension that might exist because of the joint venture will cease with keno being licensed to a single entity, Tabcorp. And as Tabcorp already operates keno successfully in the states of New South Wales and Queensland, it has both a business model which is successful and a system approved which can be expanded into Victoria.