Seven days in wagering … Under the spotlight

In this edition:

• Wagering windfall for state governments, but pokies still drive majority of gambling taxes
• Entain shutters TAB Racing Club as CEO focuses on selling bets
• Waterhouse VC – Land of the Rising Sums
• Parlay panic: $8 billion earthquake shakes up US betting industry
• Asian-based illegal racing site snares 17,000 bettors and more than $180 million
• NextBet dives into Australia with CrossBet acquisition

This is the time of year where betting companies are in fierce competition for the greatest exposure possible.

Footy finals and the spring racing carnival are harvest time for wagering companies to find new customers and re-activate old ones, and the competition for eyeballs sees marketing budgets balloon and media revenues multiply.

But there is one form of exposure which the wagering industry feels it could do without.

On Monday, the ABC Four Corners program will air Losing Streak, a program focused on the societal and political impacts of an industry which MP and anti-gambling advocate Andrew Wilkie describes “as the wild west of business in this country”.

The program, reported by Steve Cannane and produced by Mayeta Clark, has been long anticipated and was a centre of discussion at the recent Backing The Punt wagering conference in Melbourne.

Some felt it would be a “stitch up” job, designed to bring only poor light on the Australian wagering industry, but the reality is, an industry of the size it is will, and arguably should, court critical news coverage.

Whether Four Corners does this with effect or balance will be a matter of opinion, but one of the few wagering voices willing to put his face on camera was Kai Cantwell from Responsible Wagering Australia.

While some have expressed concerns how Cantwell’s words will be utilised, hiding behind corporate facades won’t help the industry sustain its social and political legitimacy.

It is also an industry which has awaited key reforms from a federal level for well over two years. These reforms are complex, as is the industry itself, and it is doubtful that a news program on a 48-minute timeline, and focused primarily on gambling harm, can give a proper sense of this.

We reported this week that state and territory governments in Australia directly benefit, via gambling taxes, up to $10 billion from the broader gambling industry. Of this, $1.1 billion comes from wagering, the rest from pokies, casinos and lotteries.

According to the latest stats, around a quarter of annual gambling expenditure of $32 billion in Australia is from wagering. So why does it draw such political and media mileage?  

Again, there is a reasoned argument that you can’t get all the benefits of being able to aggressively market your product, without the drawbacks of greater scrutiny.

It’s a delicate time in Australian wagering. Entain is still facing the prospect of a substantial fine from AUSTRAC and that led to undertaking a major change of strategy over the past nine months.

“We are focused on our core business of responsibly selling bets and creating innovative products,” Australian and New Zealand chief executive Andrew Vouris said this week.

That was in reference to the decision to shutter the NZ TAB Racing Club, just 12 months after launching the concept.

There is also the looming prospect of mass consolidation of bookmakers, especially at the lower end, and at least one company, NextBet is looking to capitalise on this situation.

But wagering is also a global industry. The events during the week in the United States are a salutatory lesson that you can not take anything for granted.

On Monday, Kalshi, the prediction platform which is shaking up American wagering, announced a same-game parlay product.

On Tuesday, the share prices of the two biggest players in the market, DraftKings and Flutter, dropped 10 per cent, wiping $8 billion combined off their value.

All of this is without considering the implications of the unregulated market. This week’s contribution from Waterhouse VC focuses on how that market is shaping Japan and the likely impact of any opening up of its tightly regulated environment.

Enforcement is a big part of the battle to ensure the betting industry doesn’t completely slip into the black market. Korean authorities busted a sophisticated racing betting ring which had over 17,000 customers and held over $180 million in bets.

Enjoy your wagering week,

Bren O’Brien

Managing Editor and Founder

The Straight