It has been long suspected that 2024 will be a year of consolidation in the wagering industry, and the first signs of that have emerged with reports of merger discussions between BetR and BlueBet.
The Australian Financial Review reported on Friday that discussions had began between BetR, which is headed by Matthew Tripp, and BlueBet, whose executive chairman is one-time prominent bookmaker Michael Sullivan.
BlueBet is listed on the Australian Stock Exchange and occupies about two per cent of the Australian wagering market, while BetR made an enormous splash in the local landscape in the spring of 2022, reportedly gathering up 350,000 customers in a few weeks with a series of much-publicised incentives and promotions.
However, the past 12 months have seen BetR take a lower-profile approach, especially after the exit of Newscorp as a shareholder. It has been linked to several mergers and acquisitions over that time, but none of those deals has eventuated.
The latest reports – both BlueBet and BetR refused to confirm they were in merger talks to the AFR – set the scene for a slew of similar discussions through this year as the headwinds in the sector grow.
In 2023, wagering in Australia dropped from between seven and 10 per cent, as cost of living and inflationary pressures took hold. Higher taxation has been an ongoing challenge for wagering companies for some time, while there is the looming threat of federal government regulation surrounding the advertising and promotion of wagering.
Bren O’Brien
The impact of this is set to see wagering companies look to secure and consolidate their positions possibly through mergers and acquisitions.
The likes of BetR, Pointsbet and BlueBet, who occupy between one and five per cent market share each, need to grow their businesses to match the power of dominant industry players, Sportsbet (Flutter), Tabcorp (TAB) and Entain (Ladbrokes/Neds).
Both Tripp and Sullivan were major players in the first wave of wagering consolidation in the Australian wagering sector. Tripp helped found both Sportsbet and BetEasy, selling both off at a handsome gain, while Sullivan was the chief executive of both Sportingbet Australia and William Hill Australia, before leaving to found BlueBet in 2015.
BlueBet’s turnover was $536.6 million in the last financial year, while its share price has fallen 47 per cent in the past year, from 38c to 20c.
