Seven days in … wagering – A positive outlook amid the Melbourne rain

In this edition:

• The push to open up live in-play sports betting in Australia
• Controlled play: MIXI to take PointsBet board spot and plans to shut betr out
• Albanese government starts to move on gambling ad reform
• Waterhouse VC – New Dawn for Brazil
• Bank Of America’s substantial chunk of Tabcorp
• Massive boom in illegal online gambling in the UK

If there was one thing to take out of this year’s Backing The Punt wagering and racing conference in Melbourne, it was that there is a renewed confidence in the health of the industry, at least at the corporate level.

It is a marked contrast to the start of the year, when many of the same people had gathered on the Gold Coast and expressed uncertainties around mounting taxation and regulation, as well as the lack of clarity on the future of wagering advertising reform.

The “action pending” sign has hung over the sector ever since the You Win Some, You Lose More report was handed down in June 2023, but the prospect of progress in that area, canvassed earlier this week in The Straight, does seem to have lightened the mood.

There is also a broader sense that the regulatory cycle has turned. The prospect of reducing the Point of Consumption Tax rate in Queensland is being openly discussed, with the Matthew McGrath-led industry review, which is likely to be handed down within weeks, eagerly anticipated.  

There is also confidence that the Australian economy is emerging from the cost-of-living crisis. Wagering is returning to growth. Not the sort of artificially inflated growth that occurred post-pandemic, but rather a seemingly stable rate of improvement on which long-term strategies can be based.

Tabcorp is playing a key role in this. At the same conference last year, Tabcorp was at a nadir, having announced a massive write-down of its business, with its market cap dropping well below $1 billion and its share price at 38 cents.

But the strategies taken under Gil McLachlan’s leadership have galvanised confidence in the once lumbering corporate giant. Its market cap is now soaring north of $2.3 billion with enormous demand pushing its share price above $1, up 30 per cent in the past two weeks.

Some corporate rivals see it as a sugar hit, and there have been plenty of pointed remarks about a surge in cash betting driving Tabcorp’s growth, somewhat of an anachronism in a world and an industry increasingly driven by digital transactions.

Tabcorp’s previous stand on advertising reform has also antagonised its rivals, who have accused it of hypocrisy. But the new leadership under McLachlan seems to have garnered a more collegiate relationship across the industry, and it was interesting to hear during the week that it will pull back from its branding push within sports venues, a point of tension with some of its rivals.

McLachlan has led a “back to the pubs and clubs” mantra, driving home Tabcorp’s retail advantage. The notion might sit somewhere between quaint and delusional to its ardent critics, but it seems to be resonating, at least with shareholders.

A part of this has been the in-app, in-play betting trial in venue, which may not have set the world on fire just yet, but has set tongues wagging as to whether online in-play betting could be legalised in the near future.

One corporate rival said they were “cheering Tabcorp on” in their push into that space. This particular exec, a former colleague of McLachlan’s, is known for tongue-in-cheek remarks, but it did point to a sense of common purpose across the industry. 

There are still a host of contentious industry matters, but they seem to be moving towards resolution.

MIXI seems well poised to get control of PointsBet, now with 53 per cent of the company, but is likely to have to continue to deal with betr as a minority shareholder. It’s an uneasy relationship, especially given all the barbs that have been fired, and one which may finally come to a head over the next few weeks.

The Backing The Punt conference also featured presentations by a host of industry regulators. Australia’s wagering industry is primarily regulated out of the Northern Territory and it was interesting to hear from Alastair Shields, the chairman of the NT Racing and Wagering Commission, about his body’s evolving priorities.

There is no doubt been some level of frustration with the NT-based system, especially as the explosion of the number of bookies it regulates has put more pressure on its resources. Some players are even considering moving jurisdictions.

Regulation is key in an industry like wagering and the proliferation of the unregulated market was again a hot discussion item in Melbourne this week.

This week, we have a feature piece from Waterhouse VC from earlier this year on the transformative effect of regulation in the Brazilian wagering market.

Enjoy your wagering week,

Regards

Bren O’Brien

Managing Editor and Founder

The Straight