Racing Victoria reported that bettors in Australia have placed A$5.23 billion in wagers in the first half of the 2021/22 fiscal year. Australian betting enthusiasts continued to place racing wagers despite the pandemic crippling most other businesses in Australia, and the A$5.23 billion in bets is the highest betting spend RV has ever recorded.
However, Australian punters going over the A$5 billion threshold with the bets they placed didn’t increase RV’s revenue for the same period. According to Giles Thompson, Racing Victoria Chief Executive, betting RV’s coffers are actually a bit lighter and revenue was down 2%-3%.
More Favourites Won Their Races
So, what caused the revenue to drop when punters spend more money than ever? Interestingly, it is all down to race results and favourites winning more races than they usually do.
Racing Victoria, just like most racing and betting authorities, receives a percentage of bookmakers’ revenue and profits. So, if front-runners win more races, betting operators have to pay more money to punters. That means lower profits and less money for the racing authority.
Comparing bookmaker margins for the first half of the financial year confirms that what the Racing Victoria CEO reported is true. Bookmaker margins dropped from 13.4% to 11.8% because 37.3% of favourites won their races. Only 31.9% of front-runners saluted across Victoria in the previous six-month period.
Melbourne Cup Day Turnover Was A$375.6 Million
The record levels of wagering were not hampered by crowds being locked out of most spring carnival races. In fact, there was a record amount of money wagered on 8 of the 10 major events during that period.
Melbourne Cup Day saw the biggest turnover growth and increased by 7.6% to A$375.6 million. That took the total four-day Melbourne Cup Carnival turnover to A$724.1 million.
Digital Betting Caused the Increase
And it wasn’t only betting turnover that increased in the 2021/22 fiscal year. Prize money was also on the rise. Just like New South Wales, Racing Victoria increased stakes and is going to pay A$286.5 million, an A$18.7 million increase on what RV paid last year.
Outgoing RV CEO Thompson said that despite the many challenges they faced during the COVID-19 pandemic, the Victorian racing industry demonstrated strength and overall health.
He added that there were many things to be positive about, highlighting the record A$286.5 million in prize money, a A$110 million increase compared to 2015.
According to Thompson, the increase in digital betting was the reason for the record betting and prize money numbers they were reporting. He said that COVID-19 restrictions accelerated the transition to online betting in the first half of the 2021/22 fiscal year.
However, wagering numbers started to plateau in the third quarter (of the 2021/22 FY) due to increased competition in the entertainment industry.
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