FIREWORKS DOWN UNDER
PADDY POWER AND WILLIAM HILL HAVE SPEARHEADED A BRITISH TAKEOVER OF
AUSTRALIA’S ONLINE BETTING MARKET, BUT INCREASED COMPETITION AND MARKETING
COSTS MEANS THERE IS LESS PROFIT TO GO ROUND. LIAM STOKER REPORTS
he years that immediately followed the Second
World War saw an overwhelming number of
British nationals emigrate to Australia. Enticed
with the promise of a new life and jobs, the socalled ‘ten-dollar-poms’ flocked to the Southern
Hemisphere in their thousands.
Sixty years later, and it’s the gambling operators of the
British Isles seeking new opportunities. Spearheaded by
the likes of Paddy Power, Betfair and William Hill, UK
bookmakers have pinpointed Australia as a market worth
the investment, time and effort with much needed profits up
for grabs. Take Paddy Power for example, whose Australian
business recorded a 33% increase in online revenues year-onyear to €86.5m over the past six months.
And with the Point of Consumption tax looming, UKfacing operators face a race against time to find another
revenue stream to balance the hefty tax hit. With its love
of sport and penchant for gambling – Australia’s gambling
industry has been valued at approximately AU$25bn annually
– it’s of little surprise that established UK bookmakers have
set up shop in the new world by whichever means necessary.
There are, however, obstacles in the road. Domestic
competition is fierce and multi-million-dollar TV deals and
horseracing track sponsorships have become commonplace.
After it completed the acquisition of Sportingbet Australia,
Hills reported that player acquisition costs had reached
extortionate levels at seven times European norms.
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Meanwhile an unfamiliar and complicated regulatory system
remains a challenge, while the country’s new government
has shown no signs of relaxing clampdowns on gambling
advertising.
Given the undoubted financial investment needed to
wrestle market share from those already present in the space,
is Australia – where only online sports betting is legal – worth
the trouble?
COMPLEX AND HYPOCRITICAL
“Regulation in Australia is not just complex, but fairly
hypocritical,” Jamie Nettleton, partner at Addisons Lawyers
in Australia, says. Detractors have argued that the current
system of allowing states and territories to self-regulate
makes it difficult for operators to gain clarity, with Tabcorp
chairwoman Paula Dwyer leading recent calls for a shift to a
national framework.
At present, tax rates and stipulations differ depending
on location, a situation lamented by various operators in
the country. “Some degree of harmonisation on that front
is certainly desirable and would make business simpler,”
Nettleton says, adding that the situation is unlikely to
change despite a new government having assumed control in
September this year.
Any British operator looking to enter the Australian
market will not only have to comply with such a nuanced
regulatory framework, but also adhere to strict rules
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