Australian betting giant Sportsbet gets additional investment from Paddy Power Betfair

  • Written by News Company

Sportsbet which was established in 1993 is currently one of the biggest online bookmakers in Australia. In fact, in 2012, the company was the biggest corporate bookmaker in the country. As from February 2016, Sportsbet was owned by Paddy Power Betfair after having been owned by Paddy Power since 2010.

In the first week of May 2018, Paddy Power Betfair announced that it would be injecting an additional £10 million ($18 million) of its marketing revenue into Sportsbet. Currently, competitors are being ‘distracted’ by the tasks of merging and consolidating their businesses and Paddy Power Betfair wants to take advantage of the situation.

According to the Paddy Power Betfair CEO, Peter Jackson, the company will size up more bolt-on acquisitions in Australia. The company also plans to introduce some of the lessons it has learned there to its operations in Europe, he added. informs that Paddy Power Betfair is seeing an opportunity to compete in a more aggressive manner. The Ireland-based bookmaker wants to push hard into the Australian market, added Peter Jackson. According to the CEO, the company has a great business and there is a lot that it can take advantage of whilst its competitors are distracted with their mergers and consolidations.

Australian gambling market is in a consolidation phase

According to many industry insiders, Australia is in a consolidation phase which started in 2017. The phase was started off by the country’s biggest gambling companies namely, TABCORP and Tatts. The merger of these two gambling operators which was concluded in December 2017 involved an $11 billion tie-up. In a more recent move, Crownbet became the winner in a contest of who would acquire the William Hill’s Australian assets. The process was still ongoing as of mid-May 2018. It is based on these consolidations and mergers maneuvers by the competitors that Mr. Jackson wants to take advantage and grow the company’s presence in Australia.

Paddy Power Betfair seeks to grow in revenue and presence all over the world. According to the outgoing CFO, Alex Gersh, the company is keenly considering Brazil as it is a market of interest and is also a possible market where the company can really grow. The company also seeks to intensify the rollout of new products to bridge an already existing gap that has widened between itself and its competitors.

Paddy Power Betfair financials

According to the company’s financial results of 2017, the net revenue rose by 13% to reach £1.74 billion which is equivalent to EUR 1.94 billion. Earnings before interest, tax, depreciation, and amortization (EBITDA) was 18% more standing at £473 million. The favorable sports results in sports events are what the company attributed the good results to.

While delivering Q1 2018 trading update earlier in May, Mr. Jackson revealed that revenues in Australia had slipped by 2% as compared to 2017. However, the figure rose once currency fluctuations were put into consideration. He highlighted the strong performance of the group’s Sportsbet unit in Australia which reported an EBITDA of £139 million in 2017. This was an increase of 42% over the previous year. He admitted that the more he is getting to learn about Sportsbet business, the more he is getting impressed.

New regulations in Australia

It is expected that a 15% point of consumption wagering tax will come into effect in January 2019 in the Western Australia region. Other states will follow suit. According to Mr. Jackson, the smaller players will be the first ones to wave the ‘white flag’. The reason for this will be because they won’t be able to cope with the fierce competition and the new tax. Even though many will expect Paddy Power Betfair to jump in at the opportunity, Mr. Jackson says that the company will be disciplined.

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