Sportsbet to take $125m hit from new taxes, but profits keep rising for Australian online betting giant

Sportsbet now accounts for about 45 per cent of global pre-tax profit for its owner, London-listed Flutter, although it will have to deal with further point-of-consumption tax rises.

Sportsbet’s wagering income in Australia is more than $5bn. Picture: Getty Images

Point-of-consumption betting taxes will cost Sportsbet $125m annually, but profits for the digital bookmaking powerhouse in Australia keep rising.

Sportsbet, the biggest online wagering operator in Australia, contributed about 45 per cent of parent company Flutter Entertainment’s global pre-tax earnings for the six months to June 30, posting adjusted EBITDA of £219m ($377m) for the half.

London-listed Flutter said the amount of money punters staked with Sportsbet in Australia rose about 4 per cent to £5.2bn in the half, in financial results released to the market on Friday afternoon. Sportsbet’s adjusted EBITDA represented a 9 per cent increase from 2021.

Sportsbet’s results came after rival Entain Group said its net gaming revenue in Australia had surged about 19 per cent in the six months to June 30 to a record £213.7m ($304.3m) compared with the previous corresponding period, and its amount of active customers was up 8 per cent.

Entain did not reveal its customer numbers, but Flutter said Sportsbet has 993,000 average monthly users, a slight fall from the 1.008m it said it had on December 31 – at the end of the second half of the 2021 calendar year that includes the Victorian spring horse racing carnival.

Flutter management described its Australian result as “another strong performance, once again demonstrating excellent execution across product, value and brand,” though it did admit it had spent more on retaining customers “through targeted generosity initiatives”.

Its results also contained precise details of the hit Sportsbet will take from point of consumption betting tax rises in Queensland, NSW and the ACT that have been announced in recent months by respective state and territory governments.

The tax increases “will cost an estimated £22m in 2022 with an annualised impact in 2023 of £73m (AUD $125m),” Flutter said, though its management added it would be able to cope with the impost. “Sportsbet has a strong track record of managing regulatory risk, having taken meaningful market share and grown profits after the initial implementation of POC taxes in 2019.”

Meanwhile, Entain management indicated it still had some appetite for further mergers and acquisitions despite undertaking five global deals already this year.

Entain is considered the frontrunner from the Western Australian wagering licence, potentially worth more than $1bn, and could also be a suitor for Tabcorp,