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An Act of Sedition

As the government feels it necessary to introduce its new Anti-Democracy Laws on Melbourne Cup Day — laws which re-introduce the offence of sedition — it may be my last chance to inform the world of my inflammatory opinion on horse racing.

[I should first point out that the timing of the introduction of this legislation into Parliament is by no means the worst thing about it. There are many excellent reasons to hate it, such as those outlined on Media Watch last night, and in Chas Savage’s savage rant in the Age. And let’s not even talk about the process by which it was created. I can’t add any more here that hasn’t already been said elsewhere, so now onto our feature presentation…]

One of the more astute observers of Australian society is ex-Prime Minister Bob Hawke. On Robert Hughes’ documentary series Beyond The Fatal Shore, the Silver Bodgie (as our ex-PM is rather mysteriously known) was interviewed at the horse races. He graced us with his opinion on the notion that Australia is an egalitarian society. He observed that the racecourse was a microcosm of Australia, stratified like the tiers of the grandstand. The various social classes mix and mingle but there is definitely a heirarchy. In most other countries this might be a relatively banal observation, but in Australia there is the myth that everyone is your mate and that everyone gets a Fair Go, so for me the racecourse analogy was an interesting, if not revelational, one.

All this is to say that providing entertainment for the many strata of Australian society is one of the very few redeeming features of horse racing.

Horse racing is not much more than gambling, and deserves to be treated as such. It no more deserves to be televised than the keeno draw down at your RSL club. It is certainly not a sport.

Yes, the horses are wonderful and majestic to look at. So is Uluru. Yes, it requires much skill and dedication to train the horses. Just like the exhibitors at the model railway exhibition I took the young’uns to a few months back. None of this matters to the punters, who barely even see a horse on the first Tuesday in November. Take away the gambling, and then see if it still qualifies as the race that stops the nation.

Sports are fundamentally human endeavours. They allow us to demonstrate courage, will, skill, teamwork, and other noble human traits. A horse may display characteristics that bear a superficial similarity, but it is all anthropomorphism.

Now for the potentially seditious part. Horse racing should be treated exactly like any other hobby (think model railroads) as far as the government is concerned. The gambling that takes place should be treated just like any other form of gambling (think keeno at the local RSL). These two should be separated. As a hobby, it should be entirely free of specific government intervention. As gambling, it should be regulated up the wahzoo. So does the government think like this? Wanna bet on it?

The New South Wales Government maintains a comprehensive program of policy development aimed at ensuring that the legal framework meets the needs of the racing industry, the Government and the racing public.

Substitute “model railway enthusiasts” for “racing industry” to fully experience the absurdity here. They go on to say that the policy development mainly consists of industry deregulation, but still they are committed to the “ongoing viability of the industry”.

Let’s be clear: the horse racing “industry” (a word which was once associated with the manufacture of goods and services) is entirely driven by gambling. I am not against gambling per se, but it is ludicrous for the government to be promoting it. It is a zero-sum game that does not deserve to be supported by the government.

Apparently they don’t think so:

The racing industry makes a major contribution to the economy of the State both in material and leisure terms. The industry provides direct full and part-time employment for 50,000 people and indirectly creates a range of other employment opportunities. It contributes an estimated $1 billion to the State’s GDP, including the contribution of approximately $151 million (excl’ GST) in revenue annually to Government from wagering on racing events.

There you have it, gambling is apparently contributing to the economy. This is a NSW government publication. Who do they think they’re fooling with all this horseshit?

Horse racing needs to be destroyed in order to be saved. Ban all gambling on horse racing. At least until the “industry” collapses. When it reaches economic parity with all other hobbies, then we can talk about allowing gambling again.

What do you reckon, any chance of this outsider getting up?

now he’s having a go at the horses

Peter, I realise you’re quoting scripture, but let me say anyway that I’m not having a go at the horses! I’m not even having a go at gambling (in general). Or model railway enthusiasts for that matter.

[Posted on behalf of Julian, who encountered a server error, and sent the following to me via email – alastair]

Alastair,

I can some real concerns here, but I think there are several separate issues that are being mixed together. If we separate them out, it may be clearer which parts of the government we should urge people to violently overthrow, first.

I have some questions to ask you that I think might help clarify this.

Let’s quickly agree that the hobby of horse-racing is, except for a few, little more than gambling. A wonderful and majestic, yet inefficient and cruel, alternative to tumbling balls in a cage or shuffling electronic cards in an on-line casino. Without a doubt, if the gambling was removed, the sport would collapse.

My first question is: Is horse-racing an industry? Perhaps more to the point, does playing this zero-sum game really contribute to the economy?

If you think not, it is the economists who should be the first against the wall when the revolution comes, rather than the politicians and the bookies. Their models of the size of the economy appear to be based on how often you open your wallet, rather than how you leave the world a better place. In such a model, betting back and forth on flies crawling up the wall is great for the economy.

(Alternatively, if you are going to shoot the bookies, please also shoot the stock-traders, real-estate agents and other people who make their money through the shuffling of money rather than actually producing anything worthwhile to society.)

Of course, organised gambling isn’t really a zero-sum game. The TAB collects 15% of all bets on all races. Of that, the state government takes a substantial cut. More on that in a bit.

Question: Should the government permit gambling?

A minority of people would answer “No”, but you say “I am not against gambling per se”, so I assume the answer for you is “Yes”.

Question: Should the government profit from gambling?

State governments get a lot of their taxes from gambling. In some ways, this is great taxation scheme - an entirely voluntary tax, on some forms of entertainment! In other ways, this poses a terrible conflict of interest for the government: if people stopped gambling (similarly, if people stopped smoking), it would be a terrible drain on their resources, and they would be forced to find other tax sources. If you find gambling slightly repugnant, you will find the government protecting its gambling “resources” especially repugnant. Perhaps this is the real source of your concerns?

The third question is: Should the government regulate gambling?

Unregulated gambling is easily corrupted. The government is brought in to regulate gambling so that gamblers can have faith in the honesty of the system. It is possible that another, non-goverment, regulatory authority could serve the same role, but the perception is that private organisations can be even more closed and corrupt than state governments.

(Note: This need for government regulation doesn’t just apply to horse-racing, but all forms of gambling, including Keno.)

Question: Should the government favour horse-racing over other hobbies?

If the government gets involved in regulating the hobbies and entertainment of one group of people, shouldn’t it do so for all groups, to be fair? Why don’t they regulate the “Fastest Miniature Steam Engine Competition”?

It is fine to object to this government bias, but remember that the horse-racing isn’t the only industry the government pokes its nose into. The government gets heavily involved in elite sports, television and the arts, to name just a few. The difference is that the investment in horse-racing pays good dividends to the government (even if, arguably, not the society)!

Question: Should the government prop-up the racing industry?

If we are to believe that there are 50,000 jobs involved (a rubbery metric if ever I heard one), then surely they should put the same effort into protecting this industry as they would any other non-critical industry. Again, if you want to argue that the government shouldn’t get involved in the market forces of any non-critical industry, that’s fine, but it sounds like a different blog entry. Remember that, normally, the government is expected to take a role in softening the blow of rapidly changing markets on the employed. (Insert your own snide comment here about the new IR laws.)

I don’t think a ban on horse-racing gambling will prove anything. Violent overthrow, on the other hand, may well get the point across.

I should declare an interest. A member of my family - a trained economist - has a household income largely derived from the horse-racing “industry”. Melbourne Cup is the biggest day of the Australia gambling calendar, with lots of money to be made from the once-per-year punters.

I will also out myself as pro Melbourne Cup party, as an Australian tradition. It is just as good an excuse for a party (and public holiday in some regions) as many of the other excuses that we use.

Despite my once-per-year punt on the nags, I still have some ethical concerns about the treatment of animals in the racing industry. If you were proposing to keep Melbourne Cup party and lose the animals, I would be right there, lobbying for your release from detention for sedition (Well, that is, if the law allowed me to find out that you had been arrested in the first place.)

yes yes, i understand you weren’t having a go ant the horses, terrific TV personalties that they all are. I know you well enough to know it’s just the inconsistency / unfairness that you object to. As the astute bibilical scholar that you are, you picked up the origin of my paraphrase, as you might also remember, that was a misinterpretation in the original.

We want to be careful about questioning the merit of economic activity that only involve “shuffling paper” or its electronic equivalent. Economist, mechanistic little weasels that they are, are often heard to chide governments for interfering in markets for ‘merit goods’ (eg opera) or ‘picking winners’ (trying to ‘artificially’ develop an industry).

As greeny communists like me whine all the time, and Jullian seems to agree, there is something fundamentally wrong GDP growth as a measure of ‘progress’.

Julian, congratulations on being the first person to write a comment that is longer than the original post…

To answer your questions:

My first question is: Is horse-racing an industry? Perhaps more to the point, does playing this zero-sum game really contribute to the economy?

IANAE but I suspect the answer is yes. Horse racing provides entertainment services which, from an economist’s perpective, are the equal of movie theatres and restaurants. So technically it is an industry. By the same reasoning, even though the gambling itself is a zero-sum game, the net loss goes back into the economy. So yes there is some contribution to the economy.

But as you note, it’s just not what I would call worthwhile (like you say, many other vocations are in this category also). Peter’s warning about taking this position is well taken also. Nevertheless, the idea that the government is promoting this activity is the main source of my complaint (along with the unjustified romanticism of horse racing as a sport). I think this comes down to finding a more satisfying definition of contribution to the economy, but that is a different blog post like you say.

Question: Should the government permit gambling?

As above, yes.

Question: Should the government profit from gambling?

I think absolutely yes, for two reasons. Firstly, the taxation acts as a disincentive. Secondly, the funds raised provide resources for the harmfull ill-effects of the practice (addiction counseling, etc). By the same reasoning, the government should profit from smoking, drinking and other socially undesirable but still legal activities.

The third question is: Should the government regulate gambling?

Yes, in fact the phrase I used was “regulate up the wahzoo”. My reasons are the reasons you outline.

Question: Should the government favour horse-racing over other hobbies?

No, and your observation that they do this in other circumstances is true but not relevant.

Question: Should the government prop-up the racing industry?

No, although there are certainly cases where governments should intervene in the markets, it is not necessary or justified in this case.

Your concerns about animal welfare are noted and agreed with. Ditto your opinion on Melbourne Cup party time.