Consolidation an ‘avenue for expansion’ – Star Sports to target smaller bookies

UK-backed Star Sports has taken the first step towards expanding its Australian operation with the acquisition of a small-scale bookmaker.

Less than a year since opening an online wagering service tailored to Australian audiences, Star Sports has clinched a deal to secure the intellectual property belonging to dormant bookmaker Vinbet.

It’s a move that Star Sports hopes can increase its Australian footprint at a time when industry insiders say the number of operators has reached a saturation point.

“We think there’ll be further consolidation at the smaller end of the market … within the smaller operators,” Star Sports’ Australian general manager Shane Ciurleo told The Straight.

“An industry consolidation could be an avenue for expansion for us.”

Vinbet, which operated out of South Australia, was launched at the height of the pandemic in August 2021.

It maintains an online presence but its website has been closed for business.

Star Sports has been part of the UK bookmaking scene under founder Ben Keith since 1999.

Keith operated a bookmaker’s stand during the 2023 Melbourne Cup carnival, fuelling an ambition to step into the Australian market despite uncertainty over falling turnover, advertising restrictions and increased taxes.

Ciurleo has been at the helm of Star Sports’ Victorian-licensed Australian arm since it opened last August.

It gained attention soon after launching when it moved into the on-course space at some Victorian racetracks following a Tabcorp decision to scale down its totalisator presence in response to dwindling turnover because of what it claimed to be a shift in how punters placed their bets.

At the same time, mergers and acquisitions have been a growing part of the Australian online wagering landscape over the past year.

Thresholds under race fields legislation and the introduction of state-based point of consumption taxes have hurt the industry with mid-to-lower tier bookmakers claiming they are disincentivised to increase turnover because of unsustainable operating costs under the current model. 

The union between BlueBet and betr and its subsequent purchase of TopSport has underlined the changing nature of doing business.

Betr is now locked in a battle with Japanese firm MIXI for control of PointsBet as it tries to obtain a 10 per cent market share under the chairmanship of well-known wagering figure Matthew Tripp.

“We think there’ll be further consolidation at the smaller end of the market … within the smaller operators,” Star Sports’ Australian general manager Shane Ciurleo

Star Sports doesn’t operate at the same level as betr but Vinbet is unlikely to be its last foray on the acquisition front.

“We’re certainly open to further opportunities,” Ciurleo said. “When we started operating we were right in the middle of the gambling advertising reform legislation debate.

“We anticipated that we would have seen some changes there prior to the election.

“It hasn’t happened and we see acquisition as a really viable way to increase our database. Obviously it took a little bit of time to find our feet … I’m not saying we didn’t understand the operating environment but ever since we’ve opened the doors all we’ve had is proposed increases in fees across the board.”

There is anecdotal evidence that smaller bookmakers are cutting costs internally, with third parties engaged to oversee trading and customer services recognised as a growing sector within the industry.

“While there has been a fair amount of internal consolidation and savings with operating expenses we anticipate there will be other opportunities,” Ciurleo said.

“As you can imagine, a lot of the client lists are very similar and they aren’t worth what they were once upon a time. 

“We’re trying to keep up with the tech changes and the product advancement of the big players.

“But we believe we’ve got a good enough structure to move forward and start talking to other books that are looking for a way out.”