Bet365 profits rise, but dwarfed by online bookie rivals

Accounts lodged with the corporate regulator show Sportsbet made a $369m profit in Australia, with punting proving lucrative for the British corporate bookmakers.

Bet365 said it paid $75m in government and taxes and levies in its 2022 financial year. Picture: George Sal/Racing Photos

Bet365 is the latest foreign-owned bookmaker in Australia to rack up big profits, defying rising taxes and surfing a Covid-19 lockdown online betting wave to post the firm‘s best ever result.

Documents lodged with the corporate regulator show Bet365 made a pre-tax profit of $14.3m in the 12 months to March 27, from $200.4m revenue.

But the Bet365 results in Australia are dwarfed by the huge profits racked up by London-listed rivals Paddy Power, which owns Sportsbet in Australia, and Entain Group, the owner of the Ladbrokes and Neds brands.

Financial reports obtained by The Australian reveal Sportsbet made a huge $369m net profit after tax in the 12 months to December 31, 2021 from revenue of almost $2.4bn. Entain Group recorded a $113m net profit result in Australia in the same period from $765m net gaming revenue.

The big profits allowed Sportsbet and Entain to spend a combined $215m on advertising and marketing.

Corporate betting companies, who deliver digital only betting apps and services, have made big profits and gained large chunks of market share from Tabcorp during the past three years. The Covid-19 pandemic forced Tabcorp’s retail betting shops and outlets in pubs and clubs to shut for long periods, quickening the shift of punters’ betting habits to online – where the corporate bookmakers have long been more dominant than Tabcorp.

Tabcorp under new chief executive Adam Rytenskild has said it wants to aggressively win back digital market share and will also increase its marketing efforts. It recently announced a 21.7 per cent decline in earnings from continuing operations before significant items of $381.6m for the year to June 30.

Sportsbet’s earnings before interest and tax, depreciation and amortisation in Australia for the 2021 calendar year were $629.2m, according to reports lodged with the Australian Securities and Investments Commission.

Paddy Power said Sportsbet made adjusted earnings of about £219m ($377m) in Australia for the six months to June 30 alone.

Bet365’s most recent financial results were also the most lucrative in the decade it has been operating in Australia.

“The directors are pleased with the performance of the company following the events of Covid-19,” Bet365 wrote in its annual report. “It remains the director’s view that the company’s revenues will continue to grow and that it will continue to deliver both sustainable profitability and a positive financial contribution to the group.”

EBITDA of about $18m for the year was up from the $5.9m result the previous year for Bet365 in Australia, though the market is still relatively small compared to the UK, Europe and other markets it operates in. Bet365 is privately owned by British billionaire Denise Coates and her family, who run the business from their Stoke headquarters. She received a £250m salary last year.

Ms Coates and her brother John took over a betting shop run by their father, spotting that online gambling would revolutionise the wagering industry. She now owns about half of the company and is said to be Britain’s biggest individual taxpayer.

In Australia, Tabcorp has campaigned successfully for the corporate bookmakers to be levied with more point of consumption betting taxes by the Queensland and NSW state governments in recent months.

While the corporate bookmakers have said the higher taxes will hurt their results, they are still running their businesses successfully in Australia – and paying large amounts of tax.

Entain’s accounts for its Australian business, lodged by LB Australia Holdings, reveal it paid about $118m in point of consumption taxes last year, and another $176m in product fees to racing and sports bodies. The tax increases “will cost an estimated £22m in 2022 with an annualised impact in 2023 of £73m (AUD $125m),” Flutter said about Sportsbet in recent results.

Bet365 said it paid $75m in government and taxes and levies in its 2022 financial year.