Australia’s biggest betting company Sportsbet in revenue drop amid competition from Betr, Tabcorp
Flutter Entertainment said competition from new entrant Betr and Tabcorp’s new app would affect its revenue in the country.
Revenue for the nation’s largest online bookmaker, Sportsbet, has plunged, as it warned of aggressive competition from new entrant Betr and a rejuvenated Tabcorp.
Sportsbet, owned by London-listed Flutter Entertainment, suffered a 22 per cent fall in revenue for the September quarter compared to the same period last year, a significant decline for a company that claims a 50 per cent digital betting share in Australia.
Flutter’s global chief executive Peter Jackson, who visited Australia earlier this month and attended the Melbourne Cup race meeting at Flemington, blamed poor weather and strong competition from rivals for Sportsbet’s revenue fall.
Mr Jackson also attributed the result to Sportsbet’s strong result last year, when 60 per cent of the country was still in Covid lockdowns and therefore betting on their phones at home.
“We’ve had challenging Covid [comparisons] and poor quality race meetings due to the weather, which has hit turnover. But we are pleased with the underlying playing volumes that have been growing compared to the prior period.”
Sportsbet claims to have about 1.1 million active customers in Australia, the most of any betting company.
But it said its revenue in Australia for the three months to September 30, the third quarter for parent Flutter, had fallen 14 per cent to £319m ($565m) from £370m in the same period in 2021.
In Australian currency terms, the fall was 21 per cent, the biggest drop for any of Flutter’s business divisions around the world. No profit figure was released.
Flutter chief financial officer Jonathan Hill told analysts that intense competition was behind some of Sportsbet’s decline.
“We’ve had a material new entrant come into the market with Betr with some very, very aggressive offers. We’ve seen Tabcorp step up the quality of their product with their new app, we’ve seen others being aggressive as well,” Mr Hill said.
“But so have we been. We feel as if we have performed well through the start of the spring carnival.”
Betr made a splash during the spring racing carnival, launching with 100/1 offers on all horses and sports teams that saw it risk losing up to $50m on Melbourne Cup favourite Deauville Legend – which subsequently did not win.
Headed up by wagering mogul Matthew Tripp and CEO Andrew Menz, Betr is backed by an ownership group including News Corp Australia – publisher of The Australian – and Las Vegas-based Tekkorp Capital. Its technology is supplied by ASX-listed Betmakers Technology.
Meanwhile, Tabcorp CEO Adam Rytenskild said his company’s performance had improved with its relaunched app.
“Compared to the six-week period prior to [the TAB app] launch, there’s been a 16 per cent increase in active weekly customers, a 7 per cent increase in the average bet and a 33 per cent increase in reactivations,” he told Tabcorp’s annual general meeting in late October.
“[The recent] TAB Everest Day was TAB’s highest turnover day on a NSW meeting in the history of our business.”
Mr Hill said Sportsbet’s customer base was up about 6 per cent on Melbourne Cup day, and claimed it would still compete strongly with the likes of Betr and Tabcorp.
“We think the team have leant in and are aggressively competing with other players in the market, and I think they have done a really good job so far in the Spring Carnival.”
The Victoria Racing Club said $226m was bet on the Melbourne Cup itself, and that wagering turnover was up 7 per cent over the entire four-day Melbourne Cup carnival.
Entain Group, the owner of the Ladbrokes and Neds brands in Australia, also recently told the market it had experienced a fall in its revenue in the September quarter compared to strong results during Covid lockdowns last year.
Rob Wood, Entain’s CFO, said Entain had grown 20 per cent in the first half of the 2022 calendar but declined in the September quarter. He said he expected that previous growth trajectory to return later this year.
Sportsbet previously 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 in 2021.
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