Will a UK-style lottery system really take Australia back to its Olympic glory days?

Australia recorded its lowest medal tally in 24 years at the 2016 Rio Olympic Games. This prompted calls to examine the current funding model and seek alternative revenue streams.

Reports suggest Australian high-performance sport is being outspent two to one by Britain. And many believe this lack of funding is to blame for Australia’s poor performance in Rio. So, what are the solutions?

State of play

The Australian Sports Commission’s contentious Winning Edge strategy, released in late 2012 after the London Olympics, set ambitious performance targets for the Olympic team.

Under Winning Edge, Australia was expected to finish in the top five on the medal table at Rio. The high-performance strategy directed taxpayer funding toward proven successful sports, and sports chiefs were confident of achieving better results than in London.

However, Australia finished tenth on the Rio medal table.

The expectation for the 2020 Olympics in Tokyo remains for Australia to finish in the top five. However, the Australian Sports Commission’s (ASC) acting chief executive, Matt Favier, recently admitted:

If you want to pursue top five with a declining funding pool, you either fund fewer sports or you rethink if top five is achievable because it’s so much harder without the appropriate funding.

Following below-expectations performances at Rio, many sports lost up to 10% of their annual government funding. The investment allocation for 2016-17 was determined on criteria that took into account Rio performances and future contributions to Winning Edge priorities. The biggest losers were:

• canoeing (-A$235,000);

• cycling (-$391,500);

• hockey (-$292,000); and

• water polo (-$169,250).

Modern pentathlon was the only sport to receive a significant funding increase. It added $70,000 to its budget of $95,000.

Now what?

On Monday, ASC chairman John Wylie reignited discussions about implementing a UK-style lottery system in Australia. Wylie said this lottery would need to be in place by the end of 2017 to have an impact on Australia’s performances at the 2020 Olympics.

Proposals to introduce a national sport lottery system in Australia are not new. A commercial group proposed such a scheme in 1979, but the government took no action at the time.

Later, the House of Representatives Standing Committee on Expenditure discussed the topic in 1983. It conceded the idea had some support, but the states were:

… unenthusiastic as they considered it would inevitably erode their own lottery revenue bases.

In 1995, a proposal was again floated for a national sport lottery to assist the staging of the Sydney Olympics in 2000. However, similar concerns about state co-operation were highlighted as a barrier. The committee also concluded that people had enough opportunities to engage in gambling in Australia, and therefore a sport lottery was not warranted.

Twenty years on, the Australian Sports Commission is now seeking federal government legislation to approve an online national lottery system. Wylie said the proposed online lottery would not clash with traditional lottery licences held by the states – a concern that has thwarted previous attempts.

Strengths and weaknesses of a lottery system

A national lottery system would potentially raise between $30 million and $50 million per year. The funds would then be allocated across high-performance and community sport.

Under the UK’s lottery system, 50% of returns goes back into the prize pool, 28% goes to “good causes” (such as sport) and 12% goes to the government. It began in 1994, two years before British sport bottomed out at the Atlanta Olympics – where it won just one gold medal.

Despite Wylie claiming the management of the lottery would be outsourced, concerns about allocation and distribution remain. Former Australian hockey coach Ric Charlesworth has previously argued that sports funding has to be separated from the whims of politics, which often leave national sports organisations unable to make long-term plans.

Government funding through Winning Edge has been criticised for its allocation of money to sports with the best medal chances. So, under a lottery system, who would determine priorities in Olympic and community sport? And would an increase in external funding to sport potentially lead to a decrease in the government allocation to sport?

While there are many questions to be answered, the chances of passing legalisation for a national sport lottery in time to have any impact on athletes participating at the 2020 Olympics are slim. And co-operation and co-ordination with state governments will be a significant challenge, especially if current state lottery revenues are threatened.

More funding is definitely needed for Australia’s Olympic and community sports. But our sport system has greater issues that need to be tackled if we are to return to our former Olympic glory.

Below is an interactive comparing money spent to medals won at the 2016 Olympics.

Note: The weighted medal cost is determined by weighting the medals won (where a bronze medal has a value of one, silver a value of two and gold a value of three), then dividing the total amount spent by the total weighted value of the medals.