INSIGHT
REGULATED IGAMING
GOES SOUTH
IN AUSTRALIA
It’s been a challenging year for igaming companies Down Under, and unfortunately the regulatory
headwinds show no signs of abating, writes Joanne Christie
TO SAY IT’S BEEN a tough year for
igaming companies Down Under would
be something of an understatement.
The passing of the draconian Interactive
Gambling Amendment Bill in August
shut down the country’s online casino
and poker markets, as well as one of the
more profitable products for sports betting
operators: in-play.
And, by all accounts, there’s worse
to come for the country’s remaining
igaming firms – there’s serious talk about
a nationwide point-of-consumption (PoC)
tax, gambling advertisements will soon be
banned before 8.30pm during live sport
broadcasts and huge introductory offers
are also on their way out.
Even before all the changes were
mooted, most of Australia’s big online
sports betting firms, certainly those
relatively recent entrants with their roots
in the UK, were struggling to reach
profitability Down Under.
half of this year to only A$1.1m.
Paddy Power Betfair-owned Sportsbet
is the clear exception, with healthy profits
of £46m (A$80.4m) for the first half of the
year, although its market-leading position
was well established before it was bought
by Paddy Power in 2010.
Even so, Sportsbet CEO Cormac Barry
says its business has been hit hard by
the in-play ban. “We’ve seen the amount
of revenue from live betting near halve,
from around 15% to about 8% per cent
of the business.”
He concedes, however, that some
of these losses are being recouped in
other areas. “Live play to some degree
cannibalised other products, and its
prohibition has led to turnover migrating
back to those products at Sportsbet and,
for those looking to bet live, back to
offshore operators.”
Peter Staunton, Unibet’s general
manager for Australia, has a similar view:
“Even all-conquering online giant Bet365 has gotten off
to a slow start in Australia – after heavy losses in its
first two years of operation, it’s just turned a profit”
Even all-conquering online giant Bet365
has gotten off to a slow start in Australia
– after heavy losses in its first two years of
operation, it finally turned a profit in the
year ending March 2017, albeit only a very
modest A$1.2m (£670,000). And William
Hill Australia’s profits fell 85% in the first
60
iGB Affiliate Issue 66 DEC 2017/JAN 2018
“It has had an impact because this was
one of our fastest-growing products. In
a digital economy, customers will find
what they are looking for only a click
away and in this case it is often in markets
where regulation and compliance are less
ambitious than in Australia.
“We believe that bringing all products in
under Australian regulation is the only way
to provide a safe, secure and fair gambling
environment for everyone — customers,
operators, regulators, taxpayers, etc.”
Stephen Conroy, executive director at
Responsible Wagering Australia (RWA),
the organisation that was formed to
represent the interests of the country’s
online bookmakers after the Australian
Wagering Council disbanded last year, says
the in-play ban merely pushes
people offshore.
“The restriction that is in place
undermines the integrity of sporting
events,” he says. “So long as the ban is
in place, disreputable offshore providers
will continue to flourish through this
opportunity to actively undermine the
integrity of Australian sporting events.”
Offshore drag
Although online operators would
naturally argue that governments, to stop
punters going offshore where they face
less robust consumer protections, should
be more permissive, in Australia’s case
it is an argument that certainly seems to
hold weight.
Earlier this year, as legitimate casino and
poker sites were preparing to pull out of
the Australian market to abide by the new
laws, unregulated operators were flagrantly
planning to break them.
In July, US-facing Ignition Casino
launched in the Australian market and