P R O F I L E B E T 365
"WE HAVE NEVER CONCERNED
OURSELVES WITH WHAT TAX OTHER
COMPANIES DO OR DON’T PAY"
- DENISE COATES, BET365
so we’re very committed to the Australian market
and believe we’ll have a successful business there
in years to come. For us to gain significant market
share against extremely strong competition will
take time.”
Some of the Australian press has questioned
whether the influx of British bookmakers in the
country will result in punters gravitating towards
familiar, local brands such as Tatts Group and TAB
rather than latecomers from Europe. Yet Coates
stresses that, as in the UK, it will be the quality of
product and customer service that wins out.
“What customers want is exceptionally good
product, odds and service,” she says. “If you can give
that to them I don’t think they mind where you’re
from. Clearly you’re competing against strong
local brands like TAB and so on and they have a
resonance, but I don’t think it’s an Australian versus
non-Australian issue. They may gravitate towards a
local brand because that brand has a strong product
but in general, historically online users have chosen
the best product.”
Rumours have circulated that bet365 may look
to obtain a licence to operate in Italy, a move which
would hold massive potential for a company with
bet365’s proven track record in sportsbook. Italy
also permits online slots, a lack of which in Spain
has stunted growth.
Even despite the lack of slots regulation, Spain
has been a success story for bet365. The brand
has been strong there for some time – it is among
the most recognisable alongside bwin – and heavy
investment in product and marketing has led to it
securing around 40% sports betting market share.
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Challenges, however, still remain in Spain. “Clearly
[our success is] allied to the fact that not everyone
came into the market as a result of the high tax rate,
which has meant on sports we have managed to
capture a significant portion of the market,” says
Coates. “The challenge for all of us is to build a
profitable business there with a 25% tax rate. This
will be a challenge despite the otherwise reasonably
sensible regulations. It’s okay, but, the absence of slots
and the Spanish only liquidity in poker have, as you
would expect, had a hugely negative effect.”
Closer to home, while the UK’s point of
consumption (PoC) tax next year has forced other
operators into finding ways to compensate for the
15% hit on gross profits, the change could actually
be beneficial to bet365. The operator currently pays
15% gross profits tax on all sports betting revenue
whereas under PoC it may only have to pay that on
its UK revenues, which are estimated to be around
35% of its business compared to Paddy Power at
60%, Hills at around 70% and Betfair at nearer 80%.
The hit is expected to see these operators plough
more money into geographic expansion to balance
the books and marketing on home soil to put smaller
competitors under pressure. Coates, however, is
as pragmatic and focused as ever, claiming bet365
“doesn’t really think about it in those terms”. “The
PoC tax makes our business workable in terms of our
non-UK business and the lack of double taxation. We
have never concerned ourselves with what tax other
companies do or don’t pay,” she says.
Race to the top
All change:
3D model showing plans
for bet365’s new office
Unsurprisingly, the rest of the industry has
attempted to mirror bet365’s model, with the likes
of William Hill and Paddy Power matching it blow
for blow in terms of in-play markets, competitive
pricing and broad mobile and gaming offering. But
the task of catching up will test the patience and
budgets of all major egaming operators, as bet365
looks set to continue to be a tough competitor in
every market it enters.
One of the biggest reasons for this is its relentless
above the line marketing. UK readers will be
extremely familiar with the operator’s TV ads for
in-play featuring actor Ray Winstone, without
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