Figure 1: Betting on the game or betting on the odds?
Source: INDaily
For many Australians, placing a bet has become a ritual of watching sport. From betting apps and live odds to sponsorships and advertising, wagering has become embedded in the sporting experience. This growth has created clear economic benefits, with the industry generating sizeable tax revenue as well as commercial opportunities for sporting organisations and related industries. However, these benefits are accompanied by high social and financial costs, particularly for households affected by problem gambling. The growing presence of betting within Australian sport has also intensified debate surrounding advertising, prompting the Federal Government to introduce reforms aimed at tightening restrictions on wagering promotions. Together, these developments highlight the economic and social impacts of sports betting, and raise the question of whether stronger restrictions on wagering advertising are justified.
Figure 2: Live odds, live match — betting has become woven into the way Australians watch sport.
Source: ABC News
Cashing In: The Economic Case for Sports Betting
Sports betting has become a significant industry within the Australian economy, generating substantial commercial activity and government revenue. The scale of the industry can be illustrated by betting turnover, with Australian sports betting companies taking over $50 billion in bets every year. Although turnover represents the total value wagered, rather than revenue earned by bookmakers, it still highlights the sheer scale of activity within the industry. Beyond the bookmakers themselves, sports betting benefits governments through the tax revenue it generates. In FY24-25, Australian state governments received approximately $1.28 billion in tax revenue from wagering. Although this captures both sports betting and horse racing, these activities remain a meaningful source of tax revenue that contributes to broader government operations.
The economic influence of sports betting is rooted in Australia’s sporting and media industries, where sporting organisations and broadcasters gain extensive commercial benefits from sponsorships and advertising. Beyond the financial gains, sports betting provides strategic benefits by increasing audience engagement, as viewers who have placed bets may be more likely to watch the game. It can also create additional content opportunities through odds discussion and betting-related analysis. These commercial synergies have contributed to the prominence of betting within everyday sports enjoyment. From a cultural standpoint, gambling has become ingrained in the Australian sporting landscape, with 78% of adults exposed to wagering advertising at least weekly, and 41% exposed four or more times per week. This level of exposure highlights not only the commercial reach of wagering companies, but also how closely betting has become integrated with the broader sporting and media environment. Given the financial importance of these relationships, restrictions on sports betting advertising may have a major economic impact on the sporting and media organisations that earn substantial revenue from them.
The House Always Wins: The Human Cost of Gambling Harm
However, the financial costs endured by Australian households must be considered alongside the economic benefits of sports betting. Gambling losses reduce available disposable income, with recent estimates suggesting that Australians lose approximately $1,500 per year. These losses are especially concerning for lower-income households, where betting expenditure can consume a much larger share of disposable income. Although this evidence relates more broadly to gambling than to sports betting specifically, Australian research found that low-income gambling households spent on average 10% of their disposable income on gambling, compared with just 1% for the highest-income households. Repeated losses contribute to debt, making it increasingly difficult to meet everyday expenses, which increases financial stress. This creates a trade-off: while the sports betting industry generates tax revenue and supports commercial activity across the economy, this activity is ultimately funded by the significant losses of Australian consumers. As a result, the broader economic contribution of sports betting cannot be assessed solely through industry revenue and taxation; any assessment must also account for its effect on household financial wellbeing.
Despite the substantial economic benefits that the industry generates for the Australian economy, these gains are built on the losses of those least able to bear them. Research surveying approximately 16,000 Australians each year found that problem and moderate-risk gamblers who represent just 12.7% of those who gamble, account for 48.5% of all gambling revenue. This means that nearly half of the industry’s earnings come from a small group of gamblers who already have gambling-related issues. The consequences of this are severe, with 66% of high-risk gamblers reporting financial hardship, going as far as regularly missing meals. Only 24% of low-risk gamblers report the same, showing that harm is concentrated among a small vulnerable group. This raises serious ethical issues about the business model, as an industry that draws nearly half its revenue from harmed gamblers has little commercial incentive to reduce that harm.
The negative effects extend beyond just financial harm, as research by the AIFS found that 68% of high-risk gamblers experience cognitive, behavioural or mental health conditions, compared with only 28% of low-risk gamblers. This harm also transmits to those closely tied with the gambler, as 19% of respondents whose partner gambles weekly or more experienced intimate partner violence, as compared to 7% of respondents where the partner did not gamble. This demonstrates that the costs of betting are not confined to the gambler alone, but are borne by their close families and the wider community.
Figure 3: The hidden mental health cost of gambling.
Source: Behavioural Health News
Changing the Rules: Reforming Betting Advertising
In recent years, there has been a rise in sports betting, mostly due to the ease of access and low capital required. Concerningly, despite 70% of regular online bettors reporting that they experienced harm, only half of this group uses any type of consumer protection measure to manage their gambling. The Australian Gambling Research Centre (AGRC) found that this is largely because bettors perceive protection tools as reactionary measures for people already in serious difficulty, rather than something that should be used preventatively. This is worsened by the average gambler’s unrealistic expectations of winning, as over 30% of regular bettors reported that they gamble to get ahead financially. The true issue lies in the group of bettors who do not see themselves as problem gamblers, and who expect to profit from gambling, as this group has little reason to adopt measures that limit their own spending. Therefore, voluntary protection tools are unlikely to reach those who need them most, possibly requiring restrictions to be imposed at the industry level.
From July 2027, the federal government is enacting an opt-out register for gambling advertisements in an attempt to limit exposure. While many details are still unclear, there have been ongoing discussions between the Prime Minister and the opposition leader to fully determine the outcome of this register. The Labor government is proposing that this would work by restricting wagering adverts to three in an hour during the times 6 pm to 8:30 pm, excluding scheduled times after 8:30 pm; this includes a full ban during live sporting events. Moreover, ads will require a triple lock; a log-in profile, age verification and an opt-out function before they can be viewed online. Radio ads during school drop-off and pick-up times will also be banned, along with celebrity appearances, likely in response to scrutiny over adverts targeting minors. Limitations on gambling adverts are not globally unprecedented; in 2019 Italy decreed a prohibition on any advertisements promoting betting with cash prizes. Belgium has similarly banned gambling ads since 2023, as has Spain since 2021, where there has been a sustained decrease in gambling behaviour, including a 55% decrease in the creation of new accounts.
Figure 4: Betting sponsorship reaching young fans — driving the crackdown on ads targeting minors.
Source: ABC News
The extended timeline for this policy comes after months of scrutiny and speculation about the efficacy and cost of this initiative. The Australian government already runs a similar initiative, ‘Betstop ’, which prevents online and phone wagering providers from opening accounts, taking bets and sending marketing material to those on the register. However, there has been heavy criticism over betstop’s success, while there are currently around 60,000 people on the register, an estimate of 9.3% (~1.27 million) Australian men participate. Part of this scrutiny was targeted towards the ease with which people could evade the restriction through the use of fake names or emails; part of this may also be BetStop’s approach to ameliorate the betting crisis despite a 57% growth in betting numbers, whereas this new initiative should act as a preventative measure against first-time gamblers. The parliamentary report ‘You Win Some, You Lose More’ recommended a prohibition on all advertising through a four-phase plan, many of which have been implemented in this registry. However, as with all opt-out features, it is questionable how effective these changes can be if they require action and do not entirely prevent the promotion of gambling and sports betting.
While the economic impacts generated by the sports betting industry cannot be ignored, this contribution is enabled by concentrated harms on vulnerable participants. While sports betting generates a substantial turnover of around $50 billion a year, providing large state tax revenue, the industry’s model relies on taking advantage of those who are least able to sustain their losses and placing them in financial hardship. Outside of direct individual financial impacts, mental health conditions and family violence are also elevated among high-risk gamblers, demonstrating how these costs extend well beyond the individual gambler’s finances. While the government has been seeking to improve this crisis, the general usage of voluntary safeguards has proven insufficient to achieve a lasting reduction in gambling harm. While the upcoming opt-out advertising register represents a more preventative approach, and international precedent presents a hopeful outlook, an opt-out system still depends on self control which the sports betting industry thrives on exploiting. Overall, the value of sports betting cannot be judged by its sheer economic output alone, it must be weighed against the disproportionate financial and social harm borne by vulnerable households. A genuine evaluation must be made by assessing the commercial benefit against the public cost.
The CAINZ Digest is published by CAINZ, a student society affiliated with the Faculty of Business at the University of Melbourne. Opinions published are not necessarily those of the publishers, printers or editors. CAINZ and the University of Melbourne do not accept any responsibility for the accuracy of information contained in the publication.
