Straight Up – Turnover troubles make for tough calls

In this edition:

• Sportsbet revenue drops $90 million as racing decline bites
• Comment: The one thing racing must fix to secure its future
• Racing’s data and demographic challenge

It is arguable that nobody did better out of the post-pandemic wagering boom than Sportsbet. Between 2019 and 2023, the revenue of Australia’s wagering market leader nearly doubled from the equivalent of AU$1.4 billion to AU$2.6 billion, with a digital market share of close to 50 per cent at its height.

Having invested enormously in marketing and product, and acquired some key rivals and media assets along the way, Sportsbet had easily bested its chief rivals Tabcorp and Entain to sit alone as the king of Australian wagering.

But as the post-pandemic wagering boom has popped, life at the top has become harder for Sportsbet as it has for all of its rivals. This week, Flutter, its parent company, reported Australian revenue for the first quarter of 2025 had dropped 18 per cent, the equivalent of AU$90 million, compared to the same time as last year.

The main cause, according to the publicly listed global giant, was ‘structural challenges’ in the racing industry.

Those words should send a shiver down the spine at racing authorities around the country. Australia’s biggest bookie has an issue, and that issue is racing. It has become a very difficult product to make profitable.

Companies like Flutter and Entain, which reported an eight per cent drop in its quarterly revenue last week, are driving huge growth in developing global wagering markets. Not just the United States, but places like Brazil as well. In comparison, Australian revenue is falling. In 2021, Sportsbet made up 18.8 per cent of Flutter’s global revenue, but in 2025 this has slipped to 7.4 per cent.

This backs up a comment piece from respected form analyst and professional punter Daniel O’Sullivan, which we published on The Straight this week.

Daniel’s article, which originally appeared on X, outlines how important wagering turnover is to the future of racing. In his words, “That’s the engine. Everything else is bodywork and paint”.

He outlined several of the key factors behind the decline in turnover, including the creeping market percentages, which increasing taxes and fees have necessitated.

The article also details possible solutions to racing’s turnover decline and the need for a long-term engagement strategy with punters who underpin the entire industry.

One thing the racing industry doesn’t have is a clear idea of how bad the current wagering situation is. We rely largely on quarterly reports from bookmakers, the occasional wagering report from a race club or a PRA, or broader community surveys.

As we pointed out this week, relying on the later when formulating long-term strategies such as the decision whether to sell Rosehill, can be fraught, especially when one survey says one thing, and the other something completely different.

So is there a solution? For wagering companies, it is in expanding their footprint and realising the value of their unique selling point.

In the case of Tabcorp, which has undergone a fresh round of redundancies in the past week, it is hoping that will be retail.

As the exclusive retail licensee via club, pubs and agencies through most of Australia, TAB has identified growing its retail offering as a key strategy moving forward.

The practical upshot is that in a handful of NSW TAB venues, you will now be able to bet live in-play on sport through the venue mode of the TAB app.

That trial, which has NSW regulatory approval, and is timed to coincide with State Of Origin season, will mean that punters no longer have to go to a betting terminal, operator, or make a phone call to bet when a match is in progress.

It’s a key competitive advantage to TAB, and it will be fascinating to see how it plays out. It will also be interesting to see the reaction of racing bodies, which do derive revenue from additional sports turnover through tax funding agreements but may find racing becomes a less important product to another major player.

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Regards

Bren O’Brien

Managing Editor and Founder

The Straight