Asian Racing Conference: Racing Queensland chief Jason Scott warns rising wagering taxes are hurting the sport as punters struggle with cost of living

The boss of Racing Queensland says the surge in illegal markets should serve as a wake-up call for racing.

Racing Queensland chief executive Jason Scott has warned over-regulation and taxation of wagering threatens the viability of the sport.

The Asian Racing Federation executive council member, who worked in wagering for more than 20 years in Australia and America, said the racing industry could learn from the surge in illegal markets.

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“Illegal markets are growing, why are people going to illegal markets?” Scott said.

“Yes they use crypto but the reason is most customers are conscious of return and because the illegal markets are able to offer a greater return through less take-outs, less taxes et cetera they can grow.”

Scott, the former Ladbrokes Australia chief executive, opened a betting discussion at the 40th Asian Racing Conference on Thursday in Sapporo, Japan.

“We need to do more work on elasticities of take-outs, some of the parimutuel pools around the world have 25 per cent take-outs from some of the exotic markets,” Scott said.

“Is that the right amount? If we bring that back to 15 per cent or 13 per cent are we going to double the turnover and enhance greater returns to racing?”

Racing Queensland chief Jason Scott says illegal markets are thriving because they offer greater return through less take-outs. Picture: Josh Woning

Scott said World Pool, the co-mingling of global parimutuel totes and the Hong Kong Jockey Club, is the answer for “part of the problem we all face”.

“We’re not just fighting for the wagering dollar, we’re fighting for our customers’ disposable income,” Scott said.

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“In times of higher inflation, cost of living increasing, we need to make sure the customer has $100 or $200 on a Saturday or a Wednesday, or whatever day he or she bets, anywhere in the world, they have a reason to spend their money on horse racing.

“We’re competing with restaurants, we’re competing with theme parks and we’re competing with every single part of a country’s ecosystem so from that manner, wagering needs to be fun.

“It needs to be innovative and it most certainly needs to be slightly different to what it is and if we don’t change we die.”

Entain Australia and New Zealand chief financial officer Lachlan Fitt echoed the sentiment.

“The biggest risk for everyone right now, to be honest, is over-taxation and overregulation,’ Fitt said.

“We are really at a tipping point in Australia that we don’t have any more capacity to see increased taxes and fees.

“Our margins are already very thin, the only levers we have to pull are reducing marketing technology, promotional investment and all of those things are negative for the long run for the racing industry.”

Originally published as Asian Racing Conference: Racing Queensland chief Jason Scott warns rising wagering taxes are hurting the sport as punters struggle with cost of living