Australian gambling and betting operator Sportsbet has increased its marketing spending by millions of dollars in an extensive move to popularise its services ahead of an expected gambling advertising crackdown by the country’s Government.
According to the financial results of the operator’s parent company, Flutter Entertainment, Sportsbet spent an extra AU$19 million on marketing over the first six months of 2023 in comparison to its marketing spending for the same period a year ago. As explained by its Ireland-based parent company, the £10-million extra marketing spend was necessary as it helped the sports betting brand defend its leadership position in the Australian gambling market.
The gambling market of the country is fiercely competitive, with the last few years having seen a number of new entrants. The annual turnover of the industry has been estimated at approximately AU$50 billion. According to projections shared by Flutter Entertainment, the country’s sports betting market would continue to grow in the months and years to come.
The significant increase in Sportsbet’s marketing costs was partly responsible for a 27% loss of EBITDA (earnings before interest, tax, depreciation, and amortisation). Some changes brought to point-of-consumption (PoC) taxes issued by Australian state Governments also cost the operator £33 million.
Tim Costello Criticises Sportsbet for Spending Too Much on Advertising
After the announcement of the increased marketing spending in its parent company’s latest financial report, Sportsbet faced fierce criticism from Tim Costello, the chief representative of the Alliance for Gambling Reform (AGR), who said that the operator was spending too much on advertising as it was willing to generate as much as possible in profits before the Federal Government of Australia rolls out the proposed ban on gambling adverts.
As Casino Guardian reported, earlier this week, Mr Costello called for Prime Minister Anthony Albanese and the opposition leader Peter Dutton to be more proactive in launching the planned measure. At the time, the anti-gambling advocate repeated his claim that a new generation of punters is being created by the increased number of gambling ads.
Sportsbet was called “utterly irresponsible” by Mr Costello, who claimed that the rise of marketing spending should destroy the company’s social licence to operate its services. On the other hand, the AGR top advocate noted that the increased spending only proved that Sportsbet should be subject to a bigger levy.
A spokesperson for the Australian sports betting operator noted that the company’s marketing spend was seasonal, as it depended on a bunch of activities within the sporting and racing industries.
Sportsbet CEO Calls Proposed Full Gambling Advertising Ban “Disproportionate” to Possible Harms
As mentioned above, the rise in Sportsbet’s marketing spending comes at a time when the gambling sector has been trying to persuade Australian lawmakers to dilute a parliamentary inquiry’s recommendation seeking to see gambling adverts fully banned in the country.
In June 2023, the parliamentary inquiry in question called for a full ban on gambling ads to fight the manipulation of the more vulnerable and impressionable audiences. It urged ministers to adopt a phased approach, starting with the eradication of special enticements that are often offered by operators online.
At the time, the chief executive officer of Sportsbet, Barni Evans, condemned the recommendations, saying they were disproportionate to the potential social harms that could be inflicted by the sector’s services. Instead of seeking to implement full-body restrictions on the sector, he called for more measures aimed at improving customer protection in the country. According to Mr Evans, the implementation of an approach that would significantly reduce the number of adverts rather than fully ban them would better respond to community concerns.
Responsible Wagering Australia (RWA), the trade group that lobbies on behalf of the gambling industry, also described the full ban on gambling adverts as a step too far. Kai Cantwell, who heads the organisation, described blanket bans as ineffective and shortsighted at the time.
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Olivia Cole
