Unlocking Potential: How Liberal Sports Betting Policies Boost Integrity and Revenue

Prepared by H2 Gambling Capital, a leading name in gambling industry intelligence, the report offers an in-depth comparison between the effects of liberal versus restrictive sports betting regulations.

The Channelling Effect: Ensuring Safety and Integrity

One of the study’s key findings is the strong correlation between the broad availability of sports betting products and the likelihood of consumers betting with regulated onshore operators, a phenomenon known as the channelling rate. This relationship is crucial for mitigating the risks associated with sports betting-related fraud in unlicensed markets. Notably, the study points to the significant impact of popular betting markets like football and tennis, as well as betting types such as in-play and side markets, on this channelling effect.

The study challenges prevailing assumptions about the inherent risks of match-fixing in certain betting markets. It presents new data suggesting that restricting access to these markets through regulated channels does not mitigate fraud risks but rather drives consumers towards unlicensed, and potentially riskier, offshore operators.

Khalid Ali, CEO of IBIA, emphasizes, “Whilst politically attractive, this study confirms that bet restrictions are a blunt and counterproductive instrument. They don’t prevent betting, they just drive it into the unregulated market where most of the problems with sports integrity arise. The conclusions are clear: if you want to protect consumers and sports from corrupters, while maximising tax revenues, then allowing a wide range of sports betting products is essential.”

Data-Driven Decisions: The Role of Product Range

David Henwood, Director at H2, reinforces the importance of data in understanding consumer behavior. “We always fall back on the data. There is much conjecture that one of the main reasons customers use offshore betting sites is because they offer a broader range of product than available onshore. The study findings reinforce that point of view. Limiting the choice of
onshore bet types – including live in-play – is basically counter-productive. Instead, markets most successful in limiting offshore play – evidenced by a channelling rate of 90% plus – are the ones that have generally opened their onshore provision to a broad product choice. There is much that can be learnt herein in terms of best practice regulation.”

Global Trends and Regulatory Insights

The report also provides a comprehensive overview of the global sports betting landscape, forecasting significant growth and the increasing prevalence of in-play betting. It draws attention to the varying success of regulatory frameworks across jurisdictions in maintaining high channelling rates and the consequent economic implications. For instance, it suggests that liberalizing online in-play betting could yield substantial tax revenue gains for countries like Australia and Germany.

Our Comment on the Article

The IBIA’s latest study serves as a compelling argument for the benefits of liberalizing sports betting regulations. By embracing a wide range of betting products, jurisdictions can enhance consumer protection, safeguard sports integrity, and unlock significant economic benefits. This analysis not only informs policymakers but also provides valuable insights for industry stakeholders navigating the evolving sports betting landscape. As the market continues to grow, the lessons from this study will undoubtedly play a pivotal role in shaping future regulatory approaches.