Totalizator (Off-Course Betting) Amendment Bill

The Hon. R. J. WEBSTER (Minister for Planning and Minister for Energy) [3.26]: I move:

That this bill be now read a second time.

I seek leave of the House to have my second reading speech incorporated in Hansard.

Leave granted.

The purpose of the proposal before the House is to amend the Totalizator (Off-Course Betting) Act to extend the powers of the Totalizator Agency Board to enable it to conduct sweepstakes betting.

I might mention that the legal conduct of sweepstakes by other sectors of the community was made possible following amendments to the Lotteries and Art Unions Act during the 1990 budget session.

At that time the Parliament recognised the demand within the community to make lawful the long standing practice of participating in traditional Melbourne Cup sweeps.

Following the enactment of those changes the board conducted a feasibility study into the possibility of the TAB also running a sweep on the Melbourne Cup.

As a result of its study, the board is of the opinion that a Melbourne Cup sweep offering large prizemoney for a small outlay would be attractive to many people including those who may not otherwise have the opportunity of participating in a sweep. In terms of the existing legislation however, the operations of the TAB are restricted to the conduct of off-course totalisator betting on racing events and on other events and contingencies as approved by the Minister. Hence the necessity for the bill before the House.

It is proposed that tickets in the sweep will be sold at a fixed price of $1.00 each with tickets being on sale at the board's 1252 sales outlets throughout the State commencing two weeks before the Melbourne Cup. The draw will be conducted on the night preceding the cup.

Distribution of prizemoney will be prescribed in rules prepared by the board and approved by the Minister.

The legislation will provide that of the money received from persons who participate in a sweep conducted by the board, 75 per cent will be returned to investors as prizemoney; 15 per cent will be retained by the TAB to meet its expenses and make a small profit and the remainder will be paid into the Sport and Recreation Fund for the further development of sport throughout the State.

It is difficult to estimate the likely sales on a sweep such as that proposed. However the board believes that sales in the order of $1 million are not out of the question. The realisation of these estimates will therefore result in an additional $100,000 being paid into the Sport and Recreation Fund annually.

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I might mention for the information of honourable members that since 1983, approximately $8.5 million has been paid into the Sport and Recreation Fund from investments made with the TAB on events other than racing. The most notable of these is of course the successful FootyTAB which is conducted on the NSW rugby league competition.

This is of course only one of many benefits the community receives as a result of the operations of the TAB. For instance during the last financial year alone, investments with the TAB totalled approximately $3.2 billion and as a result revenue of $218.5 million was paid into the Consolidated Fund to make funds available for many important community projects including those in the areas of health, housing and education.

I am pleased to say that the TAB is rapidly gaining a well earned reputation as a world leader in off-course totalisator betting operations as evidenced by its recent engagement by the Hungarian Government to provide an off-course betting system in that country.

It is intended that for the present, the board will only conduct sweeps on the Melbourne Cup. However, in amending the legislation, provision has been made for the board to conduct sweepstakes on other major races such as the Golden Slipper, subject to the Minister's approval and depending upon public demand.

In bringing forward this legislation the opportunity has also been taken to effect a minor amendment in respect of the purposes for which money derived from totalisator betting on events other than racing can be used. In future funds from this source will be directed solely to the Sport and Recreation Fund.

Minor consequential amendments will also be made to the Tourism Commission Act, 1984 to give effect to this change.

I commend the bill.

The Hon. B. H. VAUGHAN (Deputy Leader of the Opposition) [3.27]: The Opposition supports the Totalizator (Off-course Betting) Amendment Bill. It is a pleasure for one coming from an Irish-Australian heritage to assist in the legitimisation of sweepstakes. We were brought up on sweeps. The object of the bill is to amend the Totalizator (Off-course Betting) Act 1964 to allow the Totalizator Agency Board to conduct sweepstakes on the Melbourne Cup and such other events as the Minister authorises, to provide for the making of rules in relation to the conduct of those sweepstakes, and to provide for the deduction of commission from investments on those sweepstakes at the rate of 25 per cent, which is apportioned as set out in the bill. It must be said that the main purpose of the legislation is to allow the TAB to conduct sweepstakes on the Melbourne Cup and other major races, depending on demand. The Hon. R. B. Rowland Smith when Minister for Sport and Racing, and the rest of it, was very strong on that point and often made comments about the need for the legitimisation of the sweepstake. Following amendments last year to the Lotteries and Art Unions Act to allow the conduct of sweepstakes and calcuttas, the Totalizator Agency Board has sought approval to conduct a sweep on the Melbourne Cup. It will not end there. And why should it?

The Totalizator Agency Board claims that such a sweep would be successful because of its appeal to small investors who are familiar with sweeps and who would
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like to participate in a sweep with the opportunity to win a substantial prize. The proposed changes would allow the board to conduct sweeps on other major events - for example, the Newcastle Cup - depending on public demand. The TAB estimates that sales on a Melbourne Cup sweep could reach $1 million in its first year of operation, with a likely increase in subsequent years as awareness of sweeps increases. I suggest that the sales figure could be much higher than $1 million. It is proposed that the rate of commission to be deducted from sweepstakes be the same as that applying in respect of investments with the TAB on other sporting events - 25 per cent - and that the TAB retain 15 per cent to meet its operating expenses, with the remaining 10 per cent being used to fund sporting and recreation facilities throughout the State.

A reading of the bill indicates that the proposals are to amend the Totalizator (Off-course Betting) Act to allow the Totalizator Agency Board of New South Wales to conduct sweepstakes on the Melbourne Cup; to permit the deduction of commission, as I have just pointed out; and to provide for the making of rules covering the conduct of sweepstakes by the TAB. The introduction last year of amendments to the Lotteries and Art Unions Act to allow the conduct of sweeps and calcuttas legalised an accepted practice and, at the same time, enabled certain non-profit organisations to utilise sweeps for fund-raising purposes. Similarly, sweeps conducted by the TAB, in addition to providing the opportunity of participating in a sweep with a substantial prize, will generate funds for the improvement of sporting and recreation facilities throughout the State. This will not in any way affect the office sweep with which we are all so familiar. We might even reach a day of enlightenment when two-up is legalised most of the year in the county of Yancowinna, in the city of Broken Hill.

The Hon. R. B. ROWLAND SMITH [3.32]: The proposed amendments to the Totalizator (Off-course Betting) Amendment Bill will allow the Totalizator Agency Board to conduct sweepstakes on the Melbourne Cup and other major races, depending on public demand. I hark back to what the Deputy Leader of the Opposition said, sotto voce, about the Irish Sweepstakes. I have been following racing ever since I was knee-high to a grasshopper, which is a few years ago. I suppose the Irish Sweepstakes are the most outstanding sweepstakes in the world - one of the most outstanding races that take place in Ireland in the course of a year. Following amendments last year to the Lotteries and Art Unions Act 1901 to allow the conduct of sweeps and calcuttas, the TAB sought approval to conduct a sweep on the Melbourne Cup. I prefer the word "sweepstakes" to the word "sweep", which tends to denote that something is being pushed out the door. The Totalizator Agency Board claims that such a sweep would be successful because of the appeal to small investors who are familiar with sweeps and who would like to participate in a sweep with the opportunity to win a substantial prize for a small investment. Some people have complained that this might have an effect on the traditional office sweep, but I do not believe this to be the case. Many individuals, such as housewives and retired persons, do not have the opportunity of participating in a sweep. For a small sum of money, they would now have an opportunity to be involved in a sweep which could net them a substantial amount of money.

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It is envisaged that tickets in the sweep will be sold at a fixed price of $1. Further, selling would commence two weeks before the Melbourne Cup. The draw would then be conducted on the night preceding the cup. I am not privy to what will take place, but I understand that two weeks before the actual race tickets will be sold and ticketholders will receive a number. On the eve of the cup there will be a draw. Successful ticketholders will be given a horse. They will automatically receive a dividend, irrespective of the placing of the horse. Five per cent of the pool will be allocated to cover this payout and 70 per cent will be allocated to the first three winners. If the prize money is $1 million, $562,500 would be allocated for the first prize; $112,500 for the second prize; and $37,500 for the third prize. As I mentioned earlier, $37,500 will be divided among the drawers of horses. The maximum number of horses for the Melbourne Cup is 24. So that would mean $1,562 would be the dividend for each of the people who had drawn these horses.

The TAB estimates that sales on the Melbourne Cup sweep could reach $1 million in its first year of operation, with a likely increase in subsequent years as awareness of the sweep increases. An important aspect of this legislation is that 75 per cent of sale moneys would be returned to investors as prize money; 15 per cent would be retained by the TAB to offset its expenses; and 10 per cent would be paid into the Sport and Recreation Fund for the further development of sport throughout New South Wales. Having been Minister for Sport, Recreation and Racing for three years, I know that there has been a call for money from various sporting bodies. We just have not had the money in the Sport and Recreation Fund. This sweep, small as it may be, will inject important capital into the Sport and Recreation Fund. In the year ended 30th June, 1990, of the $3 billion sales, 84.23 per cent was returned to investors, amounting to $2.5 billion; 3.46 per cent was paid to race clubs and the Racecourse Development Fund, amounting to $104 million; 4.29 per cent was net costs for the TAB of $129 million; and government revenue from sales, at 8.02 per cent, raised $241 million. In that instance the Government will not derive anything at all.

It is difficult to estimate likely sales on the sweepstakes. However, it is envisaged that it could be of the order of $1 million. This would mean that $100,000 would be paid annually into the Sport and Recreation Fund. As I said, this is important. The Sport and Recreation Fund is not being injected with further money because of the state of the economy. Anything that it can raise in addition to what it is given from the Consolidated Fund is very important. Since 1983, $8.5 million has been paid into the Sport and Recreation Fund from investments made with the TAB. The most notable of these is the successful FootyTAB which is conducted on the rugby league competition. It will be interesting to see how successful this is for the 1991 Melbourne Cup sweepstakes. In the event that it is successful, the Minister will be empowered to hold sweepstakes on other races, such as the Golden Slipper. Reverend the Hon. F. J. Nile has spoken repeatedly about gambling in this State. The Government is implementing these programs because of popular demand. This will keep legal gambling above board. Reverend the Hon. F. J. Nile and the Hon. Elaine Nile wish to see a return to the bad
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old days of illegal gambling. Reverend the Hon. F. J. Nile spoke about the mafia. That is exactly where the mafia comes in.

[Interruption]

The Hon. R. B. ROWLAND SMITH: No, I was not. Earlier I was talking about Ireland. The mafia rules triumphant where there are illegal operations. This Government is legalising gambling which would otherwise go underground. I support the bill.

Reverend the Hon. F. J. NILE [3.39]: On behalf of the Call to Australia group I oppose the Totalisator (Off-course Betting) Amendment Bill. The Hon. R. B. Rowland Smith said we always oppose gambling bills. That is correct: our policy is to discourage gambling. Though the Leader of the House defended the Government's policy, we say that the Government is not neutral, that it takes an active role in promoting gambling. It is one thing to say that some people have a desire to gamble and you cannot stop that. However, it is a matter of whether the Government should be in the business of encouraging, sponsoring and conducting gambling. We in the Call to Australia group are realists. We know that some people will always want to gamble. However, we say that the Government's policy should be to reduce, not to increase, the level of gambling. I believe that the more revenue that is locked into gambling, the more time public servants must spend in think tanks trying to devise new forms of gambling in order to increase revenue. That is an entirely wrong direction for the Government to travel.

The Hon. R. B. Rowland Smith: Is it wrong to obtain revenue for sport and recreation?

Reverend the Hon. F. J. NILE: No, but more money would be available if funds did not have to be allocated for social services to patch up broken homes, and so on. The objects of this bill are:

(a) to allow the Totalizator Agency Board to conduct sweepstakes on the Melbourne Cup and such other events as the Minister authorises and to provide for the making of rules in relation to the conduct of those sweepstakes; and

(b) to provide for the deduction of commission from investments on those sweepstakes at the rate of 25 per cent, comprising:

(i) commission at the rate of 15 per cent to be retained by the Board; and

(ii) commission at the rate of 10 per cent to be paid to the Sport and Recreation Fund.

This legislation is a good example of the very problem to which I have referred. The Government has a policy of introducing gambling legislation in a creeping fashion, step by step. One might have questioned the Government's intention last year, because the reality is, as the Government acknowledges, that legislation was passed then to legalise sweeps and calcuttas on the Melbourne Cup. That legislation was presented most
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innocently. It was said that office workers and even students like to run sweeps; as that is an innocent activity it should not be illegal. One might have thought that would be the end of the matter; that nothing more would happen. However, that turned out to be only the first step. Following the enactment of the 1990 legislation the Totalizator Agency Board conducted a feasibility study on how it could exploit that legislation, which, as I say, appeared to represent only a minor step forward.

We have gone from the point of people investing 20c in an office sweep to the discussion of a $1 million operation. We have gone from an innocent office sweep to a TAB feasibility study, and the next step is for the TAB to draw up a proposal for it to conduct a Melbourne Cup sweep offering large prize money for a small outlay. The sweeps will be available through the TAB's 1,252 outlets, there will be a big sales push throughout the State from Sydney to Broken Hill. The TAB boasts that the sweeps will be readily accessible to any person who wishes to participate. There is no doubt about that; the TAB has outlets in virtually every shopping centre. People in this State may well wish that offices of the Department of Family and Community Services and the Commonwealth Employment Service were as accessible as TAB agencies. The Government has a strange priority, with 1,252 TAB sales outlets throughout the State.

The TAB believes it will sell sweepstakes tickets to the value of $1 million. That certainly is not out of the question, but even that does not appear to be sufficient. As with much of the Government's legislation, this bill has a rider. The bill will allow the TAB to conduct sweepstakes on the Melbourne Cup. That is the object upon which we are supposed to focus. However, there then follows the rider, "and such other events as the Minister authorises". That will be a blank cheque for the TAB to conduct sweepstakes on all races. The Government acknowledges that could include the Golden Slipper, the Sydney Cup and other events. Again this legislation represents a big step forward, a major change in policy. At stake is the important principle of the TAB conducting sweepstakes on horseraces. The Government might argue that as one million tickets will be sold at $1 each, a sweepstake will be merely another form of lottery, to be conducted by the TAB. I do not think many people will benefit from prize-money. The Hon. R. B. Rowland Smith said that those who are allotted a horse will receive a dividend and that those who are allotted the first three placegetters will divide up the major portion of the prize-money, which supposedly will be in the vicinity of 75 per cent of the $1 million.

Whatever way one looks at it, as there are only 24 runners in the Melbourne Cup, only a small number of people will receive a dividend. The TAB has been very successful in increasing its revenue. During the last financial year, TAB investments totalled not $3 million, not $30 million, not $300 million, but $3.2 billion. That is the equivalent of the cash flow of, say, BHP or Westpac Bank. This is big business. Admittedly the Government received $218.5 million for the Consolidated Fund. Unfortunately, that is the temptation. The Government receives that revenue, but at a social cost that has not been calculated. The social cost is difficult to calculate. If it were more obvious, the Government would understand it. If I had the money and the time, I could prove that. That is why I seek in one of my private member's bills to establish a family impact commission. When that bill is passed, as I hope it is, I would
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move that a bill such as this be referred to the commission for a study on the effect of the legislation upon the families of this State. The commission would calculate the short-term and long-term effects of the legislation and whether the financial benefit to the Government would be offset by the social cost. Perhaps not with this legislation, but overall with gambling in this State, I believe that the social cost would be much greater. For those reasons I oppose the bill. Unfortunately the Melbourne Cup is an attractive event.

The Hon. R. B. Rowland Smith: Has the honourable member ever participated in a Melbourne Cup sweep?

Reverend the Hon. F. J. NILE: Previously, before I became a Christian, I did.

The Hon. R. B. Rowland Smith: Being a Christian does not prevent your having a bet.

Reverend the Hon. F. J. NILE: In my conviction I also made a decision about gambling: thou shalt not covet and I should resist the temptation to receive money for which I did not work.

The Hon. B. H. Vaughan: You are a member of Parliament.

Reverend the Hon. F. J. NILE: The money I receive I should derive only from working. I make no apologies for my belief that in carrying out my parliamentary duties I am working. I decided to resist the temptation to obtain money from gambling. On one occasion I went to the Westpac Bank at Gladesville. I should have been a bank robber, because all the staff had their backs to the counter and were watching the Melbourne Cup on television. I had to wait patiently. Apparently the staff thought there would not be a customer throughout Australia who would want to transact bank business at that time. I had to wait until the race had finished before I could do my business. I relate that incident to point up that there is no doubt that the Melbourne Cup attracts a lot of interest. The TAB has numerous staff, including promoters and marketing experts. They will work out how to expand sweepstakes. There will be further advertising on television, radio, billboards and so on. That starts a change in attitude in our State, encouraging people to get rich quick by buying a ticket in a Melbourne Cup sweep. It is not good philosophy for the Government to impart to the people of this State, particularly to our youth, that they should follow the example of some adults in our society, and should get on the bandwagon in the hope of making money from gambling.

Very few people benefit from gambling. Many become addicted to gambling or simply go broke. I was told in Perth that only two pawnshops were operating there before the opening of the casino; now there are 30. This shows how that development affects society. I have been trying to work out the real difference in the gambling
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policies of the Liberal Party-National Party Government and the Labor Party. I venture to say I can see none. I know there is an argument in that the Government wants two casinos and the Labor Party wants only one. But their policies are the same. That should concern the people of New South Wales. It is difficult for the people to express through voting whether they support an expansion of gambling or not when both sides of the House seem to have given in to the gambling industry. That is to be regretted.

The Hon. R. S. L. JONES [3.53]: Having been born in Epsom, Surrey, and lived half a mile from the Derby racecourse, I thought I knew all about racing - until I came to Australia. To my amazement I discovered that the whole country closed down for one day a year. That was absolutely staggering. In fact, I do more work on Melbourne Cup day and I can get around town more easily because there are very few cars on the road. This is not a really big change. People will pay only one dollar each for a ticket, even though there could be $1 million in the total pool. Whether a million people buy one ticket each or 100,000 people buy 10 tickets each, this will not be a gigantic leap forward in the realms of gambling. It will provide $250,000 - $150,000 to the Board and $100,000 to the sport and recreation fund, which I hope will help our Olympic team in Barcelona. I do not think one could get too steamed up over this legislation. It is a minor change in the scheme of things. I have given up betting on the Melbourne Cup after one or two tries - and picking the wrong horse - although I have got a tip this year which I shall give members privately if they come to me. I do not want to lose my money; I would rather spend it on food.

The Hon. R. J. WEBSTER (Minister for Planning and Minister for Energy) [3.54], in reply: I thank honourable members who participated in this debate. It was obviously interesting to hear the contribution of the Hon. R. S. L. Jones about his background in England - a native of Epsom.

The Hon. E. P. Pickering: He is built like a jockey.

The Hon. R. J. WEBSTER: That is right. I think the bill is quite simple. It will legalise a practice that has been in existence for a long time and will give many people who would not otherwise have the opportunity to place a small investment on a sweepstake the opportunity to do so. Though I understand the concerns of Reverend the Hon. F. J. Nile, the Government does have an obligation to provide services for all of the people of this State. This will permit a very sensible expansion of the services that are already available for those people who wish to avail themselves of them. As the Hon. R. B. Rowland Smith said, it will provide additional funds for sport and recreation. I commend the bill.

Question - That this bill be now read a second time - put.

The House divided.

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Mrs Arena
Mr Bull
Dr Burgmann
Ms Burnswoods
Mrs Chadwick
Mr Coleman
Mr Egan
Mr Enderbury
Mrs Evans
Mrs Forsythe
Miss Gardiner
Dr Goldsmith


Mr Hannaford
Mrs Isaksen
Mr Jobling
Mr Johnson
Mr Jones
Mr Kaldis
Miss Kirkby
Mrs Kite
Mr Manson
Mr Moppett
Mr Mutch
Mr Obeid


Mr O'Grady
Mr Pickering
Mr Ryan
Mr Samios
Mrs Sham-Ho
Mr Rowland Smith
Mr Vaughan
Mrs Walker
Mr Webster
Tellers,
Mr Macdonald
Dr Pezzutti


Noes, 2


Tellers,
Mrs Nile
Revd F. J. Nile

Question so resolved in the affirmative.

Motion agreed to.

Bill read a second time.

The DEPUTY-PRESIDENT: Order! Pursuant to sessional orders, business is interrupted for the taking of questions.