Group 1 favourites still causing margin headaches for bookmakers

The return of Group 1 racing in the autumn is again proving a test for bookmaker margins, with at least one operator reporting similar punter-friendly results that persisted throughout the spring and had a major impact on the bookies’ bottom lines.

Of the four Group 1 races stages so far in the autumn, just one favourite, Tentyris in the Lightning Stakes, has saluted, but in an investor update on Thursday, betr CEO Andrew Menz indicated that after a couple of months of strong margins for bookies, February had proven a bit more difficult.

“As we outlined in January, December and January margins were back in line with historical trends. February is slightly behind, again relating to Group 1 racing, which seems to come back and we find favourite after favourite being able to win the major Group 1 races,” Menz said.

Tentyris was well supported into $2.60 in the Lightning and swept past his rivals to win. On the same day, Autumn Glow contested the Group 2 Apollo Stakes and saluted for her ninth straight win at $1.40.

Those two horses were key players in a disastrous Victoria Derby/Golden Eagle day for bookmakers, who lost tens of millions of dollars as punters rolled up several favourites into successful multis.

Saturday’s three Group 1 races at Caulfield were better news with the bookies with $1.90 favourite Treasurethe Moment beaten by second favourite Pericles in the Futurity Stakes, Streisand edging out the well-backed Closer To Free in the Blue Diamond and Tropicus winning the Oakleigh Plate at $7.50, while $2.60 stablemate Point Barrow was fourth.

This Saturday’s Group 1 racing might prove a headache for bookmakers again, however, with Observer – another central figure in that Derby Day rout, a $2.30 favourite in the Australian Guineas, while there are long odds-on favourites in the Surround Stakes (Tempted $1.65) and Verry Elleegant Stakes (Autumn Glow ($1.35) at Randwick.

In its half-yearly results, Betr confirmed customer-friendly results had impacted its EBITDA by around $7 million. The overall EBITDA loss was $13.2 million for the half, something which it said was within management expectations.

It has a normalised EBITDA target of $5 million to $8 million in the second half of the year and projects it will grow to $13 million to $19 million in FY27.

Betr’s wagering turnover for the first half of the financial year had increased by 25.2 per cent to $807.3 million.

Gross win increased 18.6 per cent to $108.3 million, compared to the same point last year. Gross win margin and net win margin were both down.

Betr had 165,504 active cash clients across the six months.

“With major investments now behind us, normalised operating conditions and a lower cost base, we are well positioned to deliver on the financial targets we have outlined and create meaningful value for our shareholders,” Menz said.

Menz also said that betr was noticing a trend away from racing, similar to that reported by Tabcorp earlier in the week.

“We continue to see the acceleration of the move from racing to sport, particularly for customers in that younger segment,” he said.

“And when they’re engaging with sports products, it’s more and more with same-game multi, which is becoming the product of choice for nearly all sports customers now.”

Menz said the focus on same-game multis will see Betr release a “game-changing, innovative product” in the sports space around mid-year.

“It’s a critical product for us, and it’s where so much of our focus and attention goes at the moment right across the business,” he said.