James Packer’s Crown Resorts has done a deal with bookmaker Matthew Tripp that effectively gives the casino operator control of his online betting start-up BetEasy, reported The Sydney Morning Herald on the 16th of December 2014.
“The foray will give Crown access to the rapid growth in fixed odds betting that is reshaping the $13 billion online wagering market, while BetEasy will be able to grow by marketing directly to some of Crown’s biggest gamblers.
A statement confirming the tie-up, which was first revealed by Street Talk earlier this month, was released to the market on Tuesday afternoon.
The casino billionaire said the deal will provide “significant benefits and opportunities for our existing and future customers.”
“Matt Tripp and his team have proven they have the experience and ability to build and operate a world-class business,” Mr Packer, Crown’s executive chairman said in a statement.
“This exciting new venture will help build an Australian-owned business that can compete strongly with the largely foreign-owned competitors in our wagering industry.”
A new operating company, two-thirds owned by Crown and the rest by BetEasy, will be created. Both parties will put in working capital, but sources said no money has changed hands in the deal.
The Australian Financial Review revealed in December that Crown had secured a trademark over the name Crown Bet, although the BetEasy brand will remain in place for now.
BetEasy‘s 150 staff will remain and Mr Tripp will run the joint venture.
“It is our firm objective to provide Australians with the best online wagering experience this country has ever seen,” Mr Tripp said.
The market has been waiting for an online gambling strategy from Crown after it paid $10 million in August to take control of the 50 per cent share in betting exchange Betfair that it didn’t already own.
The refashioned BetEasy will take control of Betfair’s fixed odds business, and the exchange will continue under the Betfair brand.
The BetEasy business will get to make offers to the 2 million people in the Crown Signature Club database.
JP Morgan analyst Matt Ryan questioned Crown’s, timing given it is ramping up its exposure to the wagering industry at a time when increased racing fees are eating bookmakers’ margins. However he said he expected Crown‘s investment to be small. “If they can work out a way to use their database to convert some of those members into betting customers then that could work,” Mr Ryan said. “That’s one of their advantages, relative to someone that’s starting out new.”
Crown shares lost 1.3 per cent, closing at a new 12-month low of $12.63.
Mr Tripp established BetEasy in March after paying about $10 million for the assets of troubled operator BetEzy . The start-up now has about 110,000 registered customers.
He stunned the market by outbidding betting giant Tabcorp to take on the high profile role as the AFL‘s wagering partner. The deal was said to cost about $50 million over five years.
Mr Tripp, 40, made his final showing on the BRW Young Rich list this year with a fortune of $117 million. He turned Sportsbet into one of the fastest growing online-only bookies before selling to Irish betting giant Paddy Power in 2011 and entering a non-compete period that ended in March.
Also on Tuesday, long-standing Packer lieutenant Ashok Jacob resigned from the Crown board.
Mr Jacob is the chairman of investment group Ellerston Capital, which is owned in a joint venture by the Packer family’s Consolidated Press Holdings and Ellerston employees.
His departure ends a long relationship with the Packer family. In a brief statement Mr Packer said: “I would like to thank Ashok for his valuable contribution to Crown over many years.”
Mr Jacob was the chief executive of CPH from 2006 to 2011 and previously the joint CEO from 1998 to 2006
His decision to step down as a director comes after former Deutsche Bank executive Rob Rankin was last month named as CPH’s new Asian-based CEO. Mr Rankin will start in January. As well as joining the Crown board, he is also set to be named a co-chairman of the company alongside Mr Packer.
Mr Jacob declined to comment.”