Online betting tax hits foreign bookies

The profits of the Australian arms of foreign-owned bookmakers have taken a blow from the new point of consumption tax.

Sportsbet says its profits took a £24m ($40m) hit from the new tax for the six months to June 30. Picture: AAP

The profits of the Australian arms of foreign-owned bookmakers have taken a big blow from the introduction of a point of consumption tax across most states this year, recently lodged accounts reveal.

Sportsbet, which a survey by UBS this week named as Australia’s top digital betting operator, revealed the new taxes caused a £24 million ($40m) hit to its profits for the six months to June 30.

In results announced in London by its parent company Flutter Entertainment (formerly Paddy Power Betfair) on Wednesday afternoon, the group said its revenue increased 16 per cent in Australian dollar terms but underlying operating profit fell 6 per cent compared to the previous corresponding period.

Flutter recorded underlying operating profit of £47m in Australia from revenue of £207m, compared with £51m and $182m a year earlier.

“Excluding the additional cost … underlying EBITDA would have been up 64 per cent in the period,” Flutter said.

The accounts of the Australian arm of global giant Bet365, lodged earlier this week, revealed the brand slumped to a $12.3m loss in the 12 months to March 31 after previously recording two consecutive years of profits.

Bet365 subsidiary Hillside blamed the loss on the new point of consumption taxes (POCT) introduced during its trading year.

“Allied to this, further increases to race fields and other product fees, resulted in a significant impact on the company’s profitability,” the annual report said.

“As the full year impact of the aformentionted POCT, fees and levy increases are still to be seen, the forthcoming financial year could also be challenging.”

Yet Bet365’s directors though said their view was the company could continue to grow its revenue and eventually return to profitability, pointing to revenue growing from $115m in 2018 to $120.9m as proof its popularity with punters was increasing.

The results came before next week’s revelation of a slew of other Australian-based or related bookmaker financial results with Tabcorp reporting next Wednesday, either side of BetEasy parent The Stars Group and Ladbrokes owner GVC revealings their latest quarterly results in Toronto and London respectively.

Meanwhile, Tabcorp will today unveil a new digital broadcast service for consumers via its Sky Racing business.

Sky Racing Active will give punters the ability to create their own channel based on a particular venue, jockey, trainer or other choices via its iOS and Android apps. The custom playlist will mean viewers watch races they want, either live or on-demand.

The service will only carry Tabcorp’s TAB wagering information and will have all harness and greyhound racing, and thoroughbred racing except for Victoria and South Australia, due to rights restrictions.