Online betting brand BetEasy to close, will be replaced by Sportsbet

Sportsbet will replace its local partner in a backtrack by the global owners of the two betting companies.

BetEasy’s closure has major implications for the racing industry. Picture: Reg Ryan/ Getty Images.

Australia’s $4bn online sports betting market will be dominated by two big players, with one of the country’s largest digital wagering brands BetEasy set to close and be subsumed into rival and merger partner Sportsbet.

The surprise move is a backtrack by the global owners of the two companies, who were set to run a dual brand strategy in Australia following the $US12bn ($19bn) merger of respective owners Flutter Entertainment and The Stars Group.

It will leave the combined group with at least a 40 per cent market share of digital betting, rivalled only by ASX-listed Tabcorp. Two other foreign-owned companies, Bet365 and Ladbrokes, which also has the Neds brand in Australia, make up a top four though they lag well behind their bigger competitors.

Sportsbet will replace the BetEasy brand, likely by the start of racing’s Spring Carnival later this year and absorb its large customer base in the latest of a string of mergers and acquisitions in Australia in recent years, in a move which could see hundreds of jobs.

Other brands to have left the market via takeovers or closure include William Hill, CrownBet, Sportingbet, Betstar and TomWaterhouse.com, as a wave of consolidation has swept over the sector.

Local Sportsbet management are likely to see the latest move as an opportunity to extend its market-leading position in online betting, particularly against Tabcorp’s TAB brand.

But Sportsbet chief executive Barni Evans said the changing business conditions brought about by the coronavirus pandemic around the world also made the move a necessity.

“This merger is about growth and our primary focus remains on continuing to deliver the best products and service to our customers,” he told The Australian.

“We are now intending to pursue a single brand strategy principally because of the ongoing volatility to sporting competitions around the world and the wider economy stemming from COVID-19. We believe in the current circumstances that a single brand strategy will enable us to provide the best possible experience for our customers.”

The news was first revealed online by The Australian on Tuesday, and will also have consequences for sponsorship deals across sport and racing, with Sportsbet and BetEasy having competed strongly for several wagering partnership contracts.

BetEasy is paying an estimated $8m annually for its partnership deal with the AFL, and has a string of other sports and racing sponsorships and live racing and sports streaming vision contracts.

Sportsbet is likely to now replace it as the AFL’s major wagering partner, though there is a chance that BetEasy’s contract with the AFL contains a break provision in the event of a change of ownership of the wagering brand.

Both Sportsbet and BetEasy also have sponsorship deals with thoroughbred racing broadcaster Racing.com, jointly owned by Seven West Media and Victorian horse racing authorities. The combined company could look to renegotiate one new overall deal.

BetEasy also sponsors the annual Magic Millions horse auction and racing meet on the Gold Coast and is the local partner of the popular US National Basketball Association.

Shareholders of Flutter and Stars Group were voting on the deal overnight Australian time and later this week. The ACCC gave the merger “informal approval” locally in February, though the deal still needs an official green light.

BetEasy’s closure will also mean the end of an era for bookmaker Matthew Tripp, who formed the company after selling Sportsbet in a $338m deal in 2011 to Irish firm Paddy Power (now Flutter).

He was succeeded as boss of BetEasy by Andrew Menz on January 1, but stayed on as non-executive president.

The future of Mr Menz and other BetEasy staff will be decided post the global merger gaining shareholder and regulatory approval.