There’s much talk over the BetEasy and Crown Casino deal that is taking place, amoungst the media and online gamibling community. AustralianGambling.com.au takes a look into the online bookmaker industry and forecasts some challenging times ahead. They pose the question: JUST how long can a country with a population of just over 22 million sustain the continually growing number of online bookmakers?
“The industry has been awash with rumours of several big name sports books struggling in the current environment; which is no surprise given the number of international raiders and local bookmakers who are vying for our punting buck.
The Northern Territory Government regulates the majority of Australia’s online bookies, who are blamed by many at the grass roots level of racing for killing off the on-course bookmaker. These days provincial and country race meetings, while well supported by punters in their lounge room, could fit their crowds in a phone box.
Why can’t the on-course bookie compete with betting giants like Sportsbet and Sportingbet? Well, the answer is simply that the profit margin is too small. The big guys offer better odds, so would we bet with Kevin Walsh at the Albury races, when we can get better odds with almost all of the big books?
If that isn’t bad enough for local bookies, they’ve been dealt another cruel blow by Racing Victoria, which has decided to increase the levy on bookmakers – a move now being followed by state racing bodies around the country. Racing Victoria announced this month that it will start charging ‘race fields’ fees from the start of July to on-course bookies. A rise in ‘race fields’ fees will inevitably lead to a change in the way bookies price up races as they try to make a buck in competition with the big boys online.
Global juggernauts William Hill (Sportingbet, Tom Waterhouse and Centrebet) and Paddy Power (Sportsbet and IASbet) are the two biggest players in the Australian market. Irish giant Paddy Power bought the remaining shares in Sportsbet last year, while William Hill made a similar move by buying out Sportingbet Australia, and finalising a deal for polarising bookmaker Tom Waterhouse.
William Hill’s purchase of Waterhouse gave them a 25 per cent market share in the $20 billion industry, with Paddy Power helping themselves to 20 per cent of the pie it leaves upwards of 15 major books fighting for half of the market share in Australia.
Something has got to give.
In recent times international books like Ladbrokes, Betfred and Bet 365 have made their move into the Australian market. They will obviously try and claim some of the earlier raiders share in the market, but can they all forge a future here? It’s very doubtful, with several other factors set to come into play.
It’s not just the increased number of bookmakers that is set to make the landscape more challenging, there is also call for change within government ranks.
Senators like Nick Xenaphon think increased regulation in the gambling industry is the way to go. Just last year betting on live sports online was banned, partly due to the threat of corruption and partly to curb problem gambling, after Tom Waterhouse’s sustained attack via television on this market.
Xenaphon and other prominent Australian politicians have called for a blanket ban on sports betting advertising on television in Australia; and judging by the extravagant advertising campaigns during the 2014 FIFA World Cup, the bookies don’t look like voluntarily taking themselves off our airwaves.
While Australia’s population continues to grow, it is still minute on a global scale at just 22 million. The ratio of people per online bookmaker seems to become smaller by the week as new bookmakers flood the market – creating a logjam that is only now starting to have an effect on company bottom lines and people’s jobs. How many bookmakers will suffer the same fate as Canbet, a small bookmaker that recently disappeared and was owned by IASbet until 2009.
The burning question William Hill v BetEasy is: Who is going to survive the corporate brawl that is coming, just as surely as winter is coming to Westeros? Can the homegrown champions like Matthew Tripp, the exulted founder of Sportsbet, make a go of his new company BetEasy? Can Palmerbet, which is 100 per cent Australian-owned, survive? Or will the legion of bookies coming over from the mother country wipe the Australians completely out of the industry?
The word in the industry that we at AustralianGambling hear is that a number of bookmakers are in trouble. IASbet’s numbers have dropped, as has its marketing and advertising campaigns. It has been reported on numerous occasions that William Hill are just biding time before closing down its Sportingbet and Centrebet brands and introducing its own brand to Australian shores.
Just two months ago, Australian bookmaker BetStar joined the list of Aussie icons being bought out – the UK money simply too good to refuse.
Alan Eskander, who once said he’d never sell out, admitted after the sale that he could no longer compete with the UK giants and the Australian bookmaker industry was headed down a very dark path. He declared that there was no future left for home-grown bookmakers.
The market cannot continue on like this. When the crash comes, what will this mean for Australian jobs? Will Australians even be able to compete with the UK invaders?
What’s more is that Australian states and punters are beginning to fight back too. Frustrated with the heavy-handed approach of online bookmakers and the way they treat their clients, Racing NSW is the first of many state racing bodies to say enough is enough and push for change to legislation – what will these new laws mean for the online industry? Can Aussies punters get some equality back in their betting?
The Federal Government will be watching the corporate bookmakers stoush in Australia with a keen interest. At some point they are going to say enough is enough. When the Government decides to introduce greater restrictions to bookmaker licences and allowing offshore companies to operate in Australia is just about anyone’s guess.
We just hope that the “little Aussie battlers” – like BetEasy and PalmerBet – are given a fair go before it’s too late.”