Sportsbet share hits even-money territory

Sportsbet lifted its share of the online sports betting market to 50 per cent in the first half of 2021, its parent says.

Sportsbet parent Flutter points to strong growth in Australia’s online sports betting market. Picture: Ross Holburt/Racing Photos via Getty Images

Sportsbet lifted its share of the online sports betting market to 50 per cent in the first half of 2021, with solid retention rates solid over the six-month period, according to its parent company Flutter Entertainment.

The Irish-based Flutter pointed to strong growth in Australia’s online sports betting market, telling investors it had generated a compound annual growth rate of 21 per cent over the last five years.

Sportsbet, one of the leading players in the local gaming market, centred its growth strategy around product, value and marketing to attract customers, with the gaming group reinvesting in generosities (handouts to punters, such as free bets). These perks stood at 26 per cent of gross gaming revenue in 2020, double the 2016 figure, according to Goldman Sachs.

“Further, they noted that in this half, retention rates remained solid, although it is too early to make a call on the extent to which some of its market share wins from the retail channel will stay,” the investment bank said of a recent Flutter investor day.

“Management believes it is more appropriate to assess this over a 12 to 18-month time frame.”

While UK-listed Flutter did not provide a trading update for the September quarter, it did note the seasonally strong period, including footy finals and the Spring racing carnival while stressing the strong year-on-year comparables it will be lapping this half, Goldmans said.

“There remains a long runway for growth, and more broadly for the sector, as they noted there are 15.2 million adult sports fans in Australia, of which 10 million pay to watch sports and around 7 million bet with any bookmaker,” the Goldmans analysts told clients.

“Moreover, they also highlighted that customers aged 35 or older staked greater than two times more than the 18 to 34 age cohort, which provided the company with an avenue for long-term growth given its customer mix was more skewed towards this cohort (around 55 per cent).”

While Sportsbet’s marketing spend in the half as a percentage net of revenue stood at 12 per cent, competitors’ spend ranged from 15.6 per cent to as much as 30.9 per cent over the same period.

Flutter also cautioned on looming challenges around the regulatory environment, Goldmans said.

“They do not expect much liberalisation across the regulatory landscape over the near to medium term and, if anything, alluded to the risk that industry fees/taxes may rise, as has been the trend over the last few years.

“As such, scale remains very important, and they noted that back in 2009 there were 10 key operators and now sees the market as having around six,” the analysts said.

Sportsbet has in the past been convicted and fined for advertising gambling inducements, in contravention of state laws.

As reported in The Australian in August, the betting giant is also facing 31 charges of publishing “gambling-related advertisements” following posts made on Twitter, Facebook and Instagram over a “Treasure Punt” promotion that offered 10 punters the chance to win a $10,000 bonus last year.

The charges involve the posting of promotional material, some of which include memes of Steve Carell, Kevin Hart, Will Smith and a heavily inebriated man who went viral in 2013 after he was stopped by police and claimed he was “just waiting for a mate”.