Part 2 – Australian market review
differences between Australia and the UK and Europe
company’s “overall business”, though he didn’t specify
in terms of customer preference.
whether this was stakes or net revenue.
The chart shows how Australia’s own sports –
The next cloud comes from comments made earlier
Aussie rules and rugby league – dominate with
this year by the minister for human services Alan Tudge,
a combined total of 39% of turnover. This is then
who suggested the government will introduce legislation
followed by basketball with 17% and finally we get to
later in the Australian spring to curb credit betting.
the European staples of football with 14% and tennis
with 11%. (See chart)
This looks likely to hurt the whole sector (depending
on their exposure to this form of betting) though the only
The obvious issue with the last two sports is that
company to comment on this so far has been William Hill,
these mostly clearly appeal to in-play bettors in the UK
which said credit betting was worth circa 20% of total
and Europe.
revenues, or about A$38m (£22.3m, €25.7m) annualised.
Taken together, the results prove that the Australian
William Hill was keen to point out that it didn’t expect to
online market is in rude health, however, there are some
see a 20% hit to earnings and that there would be a large
very dark clouds on the horizon. The first of these is the
substitution effect, but it still provides a further headwind.
further reinforcement in recent months of the in-play
Finally, the sector will also have to overcome the
click-to-call ban, with both the Northern Territory and
handicap of the introduction of a Point of Consumption
the federal government making it plain that they want
tax in South Australia around June-July 2017. This
all loopholes closed on the practice.
points to one of the peculiarities of the Australian
We can’t be certain as to what this might mean for
system, in that it has an effectively ‘offshore’ point
each of the operators that have been utilising click-
of supply regime based in the Northern Territory,
to-call, but according to Jim Mullen, chief executive at
but with other individual states now contemplating
Ladbrokes, speaking at the company’s interim results
following South Australia’s lead and instituting point of
presentation, click-to-call was worth circa 6-7% of the
consumption regimes themselves.
The market will be watching to see if any other
UBET sportsbook turnover by sport
(excl racing) 2015
Cricket
4%
Baseball
4%
Tennis
11%
Soccer
14%
states follow the SA leader, but with the federal
government now being propped up by a handful of
NFL (America Football)
3%
Other
8%
NRL
(rugby
league)
21%
AFL
(Aussie
Rules)
18%
Basketball
17%
independent, but fiercely anti-gambling, senators,
the future looks far from rosy. It likely means that the
second half of 2016 and 2017 are likely to be rockier
for the sector and profits – and potentially net gaming
revenues – are likely to suffer accordingly.
However, it won’t all be gloom. Tabcorp has
been identified as being one likely winner from the
disruptions caused in terms of product and taxes.
Indeed, an analyst note from Morgan Stanley in Sydney
at the time of its results in early August noted that the
management had mentioned that its fourth quarter
growth in yield from its fixed-odds operations was
likely largely attributable to the higher in-play scrutiny.
The analysts made the point that further noise around
state taxes would likely also be another driver of
Source: Company data
industry rationalisation and further yield growth.
iGaming Business Market Monitor – UK, Australia and Spain • September 2016
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