Digital betting shift delivers huge Sportsbet profit

The combined Sportsbet and BetEasy business in Australia more than doubled its profit.

A big increase in online betting on racing and sport by Australian punters during COVID-19 has delivered a huge profit for bookmaker Sportsbet. (Pat Scala/Racing Photos via Getty Images)

A big increase in online betting on racing and sport by Australian punters during COVID-19 has delivered a huge profit for bookmaker Sportsbet, which will bed down its merger with BetEasy in time for the biggest days of the upcoming spring racing carnival.

Sportsbet’s global owner Flutter Entertainment announced its Australian arm made an operating profit of £107m ($195m) in the six months to June 30, representing a 108 per cent increase in Australian currency terms.

The amount staked with Sportsbet by its customers rose 18 per cent to £3.723bn ($6.8bn) in the half, from which the business made a gross profit of £235m, up 41 per cent, and adjusted EBITDA of $121m, an 84 per cent increase that also meant Australia accounted for about 18 per cent of Flutter’s global result.

Flutter on Thursday evening said the Australian results were boosted by the “increased prominence of racing” during the June half as more races were televised on free-to-air networks as other sports shut down in the first stages of COVID-19.

But Flutter also said it had benefited from the closure of retail betting — Sportsbet is a corporate bookmaker that mostly takes bets online or via its apps — that hit the recently announced results of Sportsbet’s ASX-listed rival Tabcorp during the pandemic.

“The addition of some traditional retail customers who tend to bet on higher margin racing products (helped),” Flutter said in its results announcement. It also claimed about 31 per cent of betting in 2019 was being made in retail outlets, pubs and clubs and on track, compared with 44 per cent in 2016.

Tabcorp announced earlier this month that its wagering and media arm suffered a 37.7 per cent fall in earnings before interest and taxes to $175m for the full 2020 financial year.

Sportsbet will retire the Bet­Easy brand and transition its customers to the Sportsbet service by early September, after Flutter merged with BetEasy’s parent The Stars Group in May.