Gambling has long been among the favourite pastimes of Australians, with the country’s residents now spending (and losing) per head of population more than any other nation on a global scale.
Although thousands of local people spend a lot of money on various forms of gambling, the betting industry in Australia has been quite unstable. Reportedly, the share prices of companies listed on the Australian Securities Exchange (ASX) have been struggling for various reasons and the expensive attempts of some players to enter the lucrative sports betting sector in the US have not made the situation better.
Still, some analysts, such as Jun Bei Lui, a fund manager at Tribeca Investment Partners, remain hopeful that the situation of the ASX-listed gambling companies may improve in the weeks to come as spring betting season begins. Ms Lui explained that the last couple of years had seen the biggest upgrades and downgrades in the sector because it had been hard for market experts to predict the future of the assets.
Some Australian Businesses Target Expansion into Newly-Opened US Sports Betting Market
Australia has been among the pioneers in sports betting but, despite that, the country actually lacks a sports betting operator that is actually successful globally. In addition, many of the largest and most popular brands operating across the country, such as Ladbrokes, Sportsbet, or Betfair, are owned by foreign gambling companies.
The local gambling industry giant Tabcorp, which in 2018 revealed some aspirations of entering the US and UK sports betting sector, has now taken a totally different approach. As Casino Guardian reported, the company recently organised a demerger of its highly profitable lotteries assets into a new entity after rejecting Entain’s takeover approach worth AU$3.5 billion. The operator revealed that, for the time being, it remains focused on setting up its digital strategy and catching up to one of its main rivals – Sportsbet – that currently controls 50% of the Australian sports betting market.
Lately, a few operators have been making efforts to enter the world gambling and sports betting sector, with the majority of them mainly eyeing the lucrative US market, where sports betting has been only recently legalised. Unfortunately, the push is not going down particularly well, as some of the investors have been concerned about the forthcoming US recession.
On the other hand, the past year has seen the stock price of some Australian gambling companies decline. PointsBet, an operator that currently has a significant presence in Australia but has also been eyeing an expansion in the US sports betting sector, has seen a share price decline of 70%. The gambling technology group BetMakers has suffered a 60% decline in its share price, while the benchmark Australian Securities Exchange 200 index has dropped by 14% over the past year.
Fierce Competition, Rising Product Fees and Stricter Regulation Make Things Difficult for Gambling Businesses
Despite the falling share prices in the market, the Australian gambling and sports betting sector remains highly competitive.
Currently, Flutter Entertainment rakes in approximately half of the sports betting revenue generated in the country through its subsidiaries Sportsbet and BetEasy, with the two brands’ combined revenue being estimated at a total of AU$1.72 billion last year from bets worth over AU$15.5 billion.
Tabcorp has been fighting the growing influence of Entain in the Victorian and Western Australian markets, as it is preparing to face another strong opponent – Rupert Murdoch’s News Corp which is set to become the newest market entrant. Betr, the product that is expected to be released by News Corp, will be headed by Matthew Tripp and Andrew Menz, former owner and chief executive officer of BetEasy.
According to market experts, the Australian gambling and sports betting market remains hugely competitive. Apart from this, it has been quite challenging for gambling businesses due to increasing taxes and product fees. Considering the fact that the industry has gotten away with pretty low taxes and not much regulation, now the competent authorities need to bring some changes, with gambling operators forced to adjust to the new conditions.
- Author
Olivia Cole
