The international gambling operator Paddy Power Betfair has its eyes on boosting investments in its Australian brand in order to take advantage of the fact that its rival companies have been focused on consolidation lately.
As revealed by the Ireland-based bookmaker, an additional marketing revenue amounting to £10 million is planned to be poured into its local brand Sportsbet, while Australian businesses are “distracted” by targets of merging their companies to stay strong on the market.
The Chief Executive Officer of the company, Peter Jackson, commented on the revealed strategy, saying that the operator saw wider opportunities on the territory of Australia, which is why Paddy Power Betfair planned to push hard in that market. The operator’s boss further shared that the bookmaker could be interested in bolstering its business in case there are opportunities for mergers and acquisitions in the country at reasonable prices.
The CEO of the Irish bookmaker further explained that the gambling operator need to get some certainty on the UK legislation framework related to controversial fixed-odds betting terminals (FOBTs) in order to make plans about its performance in the industry. Currently, Paddy Power Betfair is one of the largest operators in the UK gambling market.
State Tax Issues and M&A Trends
The announcement for the future strategy that would be followed by Paddy Power Betfair in Australia came at a time when online gambling operators in the country have been all been awaiting the introduction of new state-based iGaming taxes under which their betting revenue is set to be taxed for the first time depending on where a bet is placed rather than the place where the company is licensed.
The so-called “point-of-consumption” tax amounting to 15% has already been rolled out in South Australia. Western Australia is to see such a tax imposed in January 2019, while Queensland has announced its intentions to follow the trend. The state of New South Wales (NSW) and Victoria have also demonstrated their intention towards possible introduction of a point-of-consumption tax, but neither one of them has presented possible introduction date or an expected tax rate.
The year 2017 started with what was considered to be a phase of consolidation in the gambling industry of Australia, with two of the largest operators – Tabcorp and Tatts Group – inking an AU$11-billion merger after months of negotiations. The acquisition of the Australian assets of the British bookmaker William Hill by CrownBet has been taken as the latest stage of the large mergers and acquisitions process in the country.
Last week, the Ireland-based operator reported its first-quarter trading update, with CEO Jackson revealing that the company’s revenues in Australia had fell by 2% in comparison to the same period a year ago. Still, the company’s head explained that the result represented a 6% increase when currency fluctuations were taken into account.
- Author
Olivia Cole
