INSIGHT affiliates told iGB in August that they ’ d been approached by operators including Bodog , Rival and RTG , which were all preparing new offerings to cash in on the pullout of the licensed operators .
In September , Australia ’ s Black Economy Taskforce recommended a crackdown on illegal gambling sites after an investigation found that there were at least 10 illegal exchanges operating in the country , with a combined annual turnover of A $ 1bn .
But if the government ’ s aim is to do away with unfair competition , it ’ s hard to see how it can achieve this and add all the extra burdens currently being proposed for the sector . By far the biggest threat is the PoC tax being bandied about by policymakers .
From place to point of consumption After South Australia brought in a 15 % PoC tax in July 2017 , other states have taken notice and Western Australia announced it would introduce a similar one in January 2019 .
There ’ s also talk of a national PoC tax , although individual states aren ’ t too happy about the idea of the federal government collecting the tax .
Regardless of whether it ’ s state or federal bodies that collect the tax , it ’ s a disaster for the sector , says Conroy . “ If a 15 % South Australian-style PoC tax was implemented nationwide , it would wipe out the entire profitability of the sector , and jeopardise the more than 2,000 Australian jobs the industry directly provides .
“ Australian wagering providers already pay a 10 % consumption tax through the GST and hundreds of millions of dollars in product fees to racing and sporting codes nationwide – a 15 % PoC tax on top of this would make Australia the least competitive jurisdiction in the world for wagering service providers .”
As the RWA sees it , a 15 % POC that doesn ’ t allow a deduction for the 10 % GST already paid is not viable , although Unibet ’ s Staunton says “ a POC based on 5.91 % of net wagering revenue in combination with the 9.09 % GST rate resulting in a an effective 15 % consumption tax rate ” might be palatable for the sector .
As well as hitting profits – and he estimates Sportsbet ’ s will be halved – Barry says a POC would have other repercussions for the sector . “ The tax has the potential to drive consolidation and reduce demand for marketing assets , reduce innovation and generally reduce competition .
“ I think inevitably this scenario would lead to worse outcomes for consumers and ultimately those sporting codes who are dependent on wagering for their funding , eg horse racing .”
Survival of the biggest Although undoubtedly a huge blow to the big operators such as Sportsbet and the other members of the RWC – bet365 , Betfair , CrownBet , Ladbrokes and Unibet – these operators would also be the most likely to survive the introduction of a PoC , particularly when combined with other regulatory changes coming in .
It is expected that the television advertising restrictions will come into play in March 2018 . Both Barry and Conroy say they support the move because it should help improve community perceptions about the overload of gambling advertising .
For his part , Staunton says : “ I don ’ t want to speculate in this but long-term I don ’ t see any major impact .”
In fact , for these operators it could be a blessing in disguise – they can cut marketing budgets safe in the knowledge that other operators aren ’ t gaining exposure to new audiences and , because their brands are already established , they ’ re likely to be at the top of punters ’ minds anyway .
The ban on introductory offers could benefit the big operators in the same way . Rather than competing with new entrants willing to throw cash away to steal market share from them , they can focus on maintaining customer loyalty in other ways .
It ’ s likely that it will be the new entrants to the Australian market who are likely to be hit hardest by the restrictions on advertising and introductory bets .
Without the ability to advertise during the sporting events that the nation is so enamoured with and without any way of enticing customers with introductory offers , it ’ s hard to see how they could encroach on the territory of established operators such as Sportsbet .
Take new sportsbook Neds , for example , spearheaded by former Ladbrokes CEO Dean Shannon . It launched in October with an A $ 10m advertising campaign and an A $ 500 sign-up offer .
If neither of those options is available to new operators in future , one has to wonder how they ’ ll make their mark in an already crowded industry .
Unfortunately , as it happens , Neds ’ advertising campaign wasn ’ t very well received anyway : the country ’ s Advertising Standards Bureau banned two of its ads for promoting excessive gambling .
Also , the lottery betting offering that it said it was planning to launch has not materialised and perhaps now never will , given Lottoland ’ s travails in Australia and CrownBet ’ s decision to pull its lottery betting site only weeks after debuting . So , for both new operators and
“ It could be a blessing in disguise – they can cut marketing budgets safe in the knowledge that other operators aren ’ t gaining exposure to new audiences ”
established ones , the Australian market is a difficult one to navigate at the moment .
However , given the fact that every year Australians come out top around the world when it comes to per capita spending on gambling , there ’ s little risk that demand from punters is about to dry up .
But , with regulations potentially making regulated markets unprofitable unless operators dramatically increase their margins , there ’ s certainly a risk that more and more punters will look further afield to get their bets on .
iGB Affiliate Issue 66 DEC 2017 / JAN 2018
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