Homepage
PR Newswire
26-10-2014, 08:13 AM
Odds on for in-play bets
Jessica Gardner
1844 words
13 Oct 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Gambling Moves to change online betting laws have left opponents aghast at apparent liberalisation tactics, while proponents say it's already happening and they want in on some of the $26 billion in digitally placed bets each year, writes Jessica Gardner.
When the Australian cricket team takes on England at the Melbourne Cricket Ground on day one of the World Cup next year, punters will have to place bets by 2.20pm sharp.
If Sportingbet, Sportsbet, Tabcorp and the James Packer-backed Betfair had their way, Australians would be able to bet on the game through the afternoon and into the night.
Parts of the industry are planning a push to change laws that stop online betting after matches have started.
The lobbying will be run by NSW state Liberal president Chris Downy, who heads the Australian Wagering Council.
Anti-gambling campaigners will be aghast at what they say is a push to liberalise betting laws. But gambling providers say there are two good reasons to allow what is known as online in-play betting.
First, local punters can already bet in-play by calling up a call centre or showing up at their local TAB outlet. The prohibition of online in-play is a relic of a law put in place in 2001, when the shift to digital betting had barely begun. These days, half of the $26 billion in bets placed each year come from computers, smartphones and tablets.Digital users already looking offshore
Second, local punters using their digital devices to back their team after the kick off, bounce or first ball are already seeking out overseas operators such as BetJack, Citibet and PuntingPal.
Tom Waterhouse, the scion of the racing family who caused a major uproar last year when he splashed the teal and grey logo of his eponymous online bookmaker across rugby league telecasts, has run the local operations of British wagering giant William Hill for the past three months.
The 32-year-old says that foreign unregulated bookies can smell an opportunity and are targeting Australian punters for in-play betting.
"The thing that is alarming for us, and the reason why we're keen to push for [regulatory change], is there has been a transformation of these overseas bookmakers," he says. "You have websites that look like William Hill websites or our competitors' websites."
Waterhouse is gesturing from the head of William Hill's boardroom table, on level 30 of a Sydney office tower. In a dark blue suit and sharp white shirt he is in full charm and persuasion mode. But he dials back the TV advertising-grade smile to emphasise what he sees as the gravity of the situation. "We're not on a level playing field when it comes to the product offering," he says. "We're seeing mass leakage of money going offshore."
In 2010 the Productivity Commission estimated that $1 billion in gambling revenue flows to illegal overseas operators each year. If the foreign operators have ramped up their targeting of Aussie punters that number may have increased.Money flow undermines sports integrity
The industry warns that the flow of money will undermine sports integrity, consumer protection and harm minimisation. It also has the potential to put their own profits at risk.
Waterhouse says the websites offer the same betting products as the three brands under his watch: Sportingbet, Centrebet and TomWaterhouse.com. The risk is that if punters go with the foreign rival for in-play betting they may take their other bets there too. "The Cricket World Cup is a great example," he says. "The bulk of turnover is going to be with offshore operators."
Allowing in-play betting is a significant opportunity for these businesses.
Killian Murphy was previously an analyst at Irish firm Goodbody Stockbrokers where he followed wagering giants such as William Hill, Paddy Power and Ladbrokes. For the past two years, as an analyst at CIMB, Murphy has watched the rising influence of these giants in Australia. "[In-play betting] is about 50 per cent of their sports betting business online in the UK," he says of William Hill and Paddy Power.Catalyst would benefit some operators
Australia's online betting market is growing at about 15 per cent a year. If online in-play betting was legalised, Murphy says it would not significantly grow the overall wagering pie but would accelerate the shift from retail betting to online.
Such a catalyst would benefit operators such as Paddy Power, which owns Sportsbet in Australia, and William Hill ahead of local incumbents such as Tabcorp and Tatts Group, he says. The anticipation of such a change is one of the reasons the Brits have spent hundreds of millions buying up local operators to get a foothold in Australia.
"They have the infrastructure here," he says. "They have all the technology here. They're just waiting for change to happen."
So it is understandable that online-only bookies are embarking on a big lobbying push. But it comes at a time that they are being buffeted from a number of directions by politicians, ex-politicians and rivals that are motivated to stop their rampant growth.
Former Victorian Premier Jeff Kennett is an outspoken critic of the operators, which are often referred to as corporate bookmakers to differentiate them from TAB agencies such as Tabcorp and Tatts.
"My objections are firstly moral," he says. Wagering advertising should be banned
"I don't like corporate bookmakers having unfettered opportunity to create a nation of gamblers." Kennett says wagering advertising should be banned.
"No government has the balls to stand up and put on the same restrictions that apply to poker machines and casinos," he says. "Yet corporate bookmakers, they're in your face the whole time. It's appalling."
Kennett says the bookmakers do not pay enough to state racing bodies. The organisations, such as Racing NSW and Racing Victoria, charge the bookies product fees, also known as race fields fees, which are often based on a percentage of turnover.
Tabcorp and Tatts pay more to the racing bodies because they hold monopoly licences to run the state's retail networks in TAB agencies and in pubs and clubs.
The popularity of online bookmakers has shifted wagering dollars away from Tabcorp and Tatts, which has reduced funding going to racing bodies.
"Corporate bookmaking is right now destroying Australian racing," Kennett says.
Spying their own opportunity, the Nationals will push for a new online wagering tax and redirect the proceeds to regional infrastructure. The plan became Nationals Party policy after Victorian Senator Bridget McKenzie proposed it at a federal council meeting in September.
Hitting online bookies with higher rates of tax is something that Tabcorp chief executive David Attenborough has been advocating for, for some time. At a recent speech to a Melbourne business lunch, Attenborough said legalised gambling should generate profit for operators, but also for government and community.
Attenborough estimates that corporate bookmakers paid $2.7 million in state wagering taxes and a further $90 million in racing industry contributions in 2014. Tabcorp paid $735 million to the Australian racing industry in 2014.Deal looks unlikely
The online bookies argue that Tabcorp's greater contribution comes from its monopoly retail licenses and that they are abiding by the product fee and licence fees put in place by the states.
Despite the wagering industry's interest in sitting down with politicians to nut out their own proposal, embracing a deal that includes paying more tax looks unlikely.
"That's not relevant to this," the Australian Wagering Council's Chris Downy says. "This idea that for some reason online operators should pay some sort of wagering tax, it's a furphy."
Waterhouse says a push for bookies to pay more tax is based on a "misconception" that companies such as William Hill don't pay their way.
"We pay $40 million in tax," he says. "We pay more in tax than we make in profit."
What Waterhouse is referring to includes standard contributions such as company and payroll tax, and the GST. In terms of tax to the Northern Territory, where the three William Hill ventures are licensed, each brand's annual wagering fee has just recently risen from $267,000 to $550,000.
In NSW, online bookies pay no license fee. With regards to racing or sports contributions, all bookies pay the same product fees, which vary from state to state. In NSW, for example, the fee is 1.5 per cent of turnover.
"I definitely think the industry pays to racing and to sporting bodies; we pay a significant share," Waterhouse says.
The idea of "jurisdiction shopping" to find the lowest fee regime is misguided he says. In the early 2000s the territory cut its turnover tax on bookies from 1.5 per cent of turnover to 0.33 per cent. The NT government allowed bookmakers to take novelty bets on things such as elections and interest rates, and promote bets based on prices offered by the TABs and their totalisator pools.
This lured them to the top end but now, Waterhouse says, there is less benefit as taxes paid to the sports and racing bodies are consistent across state borders.Nationals 'see something, tax it'
Kennett may agree that bookies should pay more to the racing bodies, but he does not think that a new tax is the way to ensure that. "I think with due respect their idea is short-sighted," he says.
"What the National Party is doing, it's old world – if they see something, tax it."
The former premier would rather the online bookies were stamped out. "Australia would be better off without corporate bookmakers," he says. But in Kennett's strong views there is a lesson for Senator McKenzie, Waterhouse and his industry.
Any debate about online gambling – whether it is the proposition of a new tax or opening up of in-play betting – has the potential to polarise opinion.
And it is why, privately, many in the gambling industry don't expect imminent change on either push. Prime Minister Tony Abbott and his advisers such as chief of staff Peta Credlin "don't want the words Coalition and gambling in the same sentence," one wagering company source said.
CIMB's Murphy agrees. When he was watching the first foray of Paddy Power into Australia, Murphy was sure the move was a play on the future of in-play betting.
"As an outsider looking into Australia – as I was, when I was Ireland – I was always of the opinion that live betting would be introduced," he says.
"But having lived in Australia for two years . . . I don't think that there is political will to be driving this agenda."
No government has the balls to stand up and put on the same restrictions that apply to poker machines and casinos, yet corporate bookmakers are in your face the whole time. Jeff Kennett, former Victorian premier
Fairfax Media Management Pty Limited
Document AFNR000020141012eaad0000f
Jessica Gardner
1844 words
13 Oct 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Gambling Moves to change online betting laws have left opponents aghast at apparent liberalisation tactics, while proponents say it's already happening and they want in on some of the $26 billion in digitally placed bets each year, writes Jessica Gardner.
When the Australian cricket team takes on England at the Melbourne Cricket Ground on day one of the World Cup next year, punters will have to place bets by 2.20pm sharp.
If Sportingbet, Sportsbet, Tabcorp and the James Packer-backed Betfair had their way, Australians would be able to bet on the game through the afternoon and into the night.
Parts of the industry are planning a push to change laws that stop online betting after matches have started.
The lobbying will be run by NSW state Liberal president Chris Downy, who heads the Australian Wagering Council.
Anti-gambling campaigners will be aghast at what they say is a push to liberalise betting laws. But gambling providers say there are two good reasons to allow what is known as online in-play betting.
First, local punters can already bet in-play by calling up a call centre or showing up at their local TAB outlet. The prohibition of online in-play is a relic of a law put in place in 2001, when the shift to digital betting had barely begun. These days, half of the $26 billion in bets placed each year come from computers, smartphones and tablets.Digital users already looking offshore
Second, local punters using their digital devices to back their team after the kick off, bounce or first ball are already seeking out overseas operators such as BetJack, Citibet and PuntingPal.
Tom Waterhouse, the scion of the racing family who caused a major uproar last year when he splashed the teal and grey logo of his eponymous online bookmaker across rugby league telecasts, has run the local operations of British wagering giant William Hill for the past three months.
The 32-year-old says that foreign unregulated bookies can smell an opportunity and are targeting Australian punters for in-play betting.
"The thing that is alarming for us, and the reason why we're keen to push for [regulatory change], is there has been a transformation of these overseas bookmakers," he says. "You have websites that look like William Hill websites or our competitors' websites."
Waterhouse is gesturing from the head of William Hill's boardroom table, on level 30 of a Sydney office tower. In a dark blue suit and sharp white shirt he is in full charm and persuasion mode. But he dials back the TV advertising-grade smile to emphasise what he sees as the gravity of the situation. "We're not on a level playing field when it comes to the product offering," he says. "We're seeing mass leakage of money going offshore."
In 2010 the Productivity Commission estimated that $1 billion in gambling revenue flows to illegal overseas operators each year. If the foreign operators have ramped up their targeting of Aussie punters that number may have increased.Money flow undermines sports integrity
The industry warns that the flow of money will undermine sports integrity, consumer protection and harm minimisation. It also has the potential to put their own profits at risk.
Waterhouse says the websites offer the same betting products as the three brands under his watch: Sportingbet, Centrebet and TomWaterhouse.com. The risk is that if punters go with the foreign rival for in-play betting they may take their other bets there too. "The Cricket World Cup is a great example," he says. "The bulk of turnover is going to be with offshore operators."
Allowing in-play betting is a significant opportunity for these businesses.
Killian Murphy was previously an analyst at Irish firm Goodbody Stockbrokers where he followed wagering giants such as William Hill, Paddy Power and Ladbrokes. For the past two years, as an analyst at CIMB, Murphy has watched the rising influence of these giants in Australia. "[In-play betting] is about 50 per cent of their sports betting business online in the UK," he says of William Hill and Paddy Power.Catalyst would benefit some operators
Australia's online betting market is growing at about 15 per cent a year. If online in-play betting was legalised, Murphy says it would not significantly grow the overall wagering pie but would accelerate the shift from retail betting to online.
Such a catalyst would benefit operators such as Paddy Power, which owns Sportsbet in Australia, and William Hill ahead of local incumbents such as Tabcorp and Tatts Group, he says. The anticipation of such a change is one of the reasons the Brits have spent hundreds of millions buying up local operators to get a foothold in Australia.
"They have the infrastructure here," he says. "They have all the technology here. They're just waiting for change to happen."
So it is understandable that online-only bookies are embarking on a big lobbying push. But it comes at a time that they are being buffeted from a number of directions by politicians, ex-politicians and rivals that are motivated to stop their rampant growth.
Former Victorian Premier Jeff Kennett is an outspoken critic of the operators, which are often referred to as corporate bookmakers to differentiate them from TAB agencies such as Tabcorp and Tatts.
"My objections are firstly moral," he says. Wagering advertising should be banned
"I don't like corporate bookmakers having unfettered opportunity to create a nation of gamblers." Kennett says wagering advertising should be banned.
"No government has the balls to stand up and put on the same restrictions that apply to poker machines and casinos," he says. "Yet corporate bookmakers, they're in your face the whole time. It's appalling."
Kennett says the bookmakers do not pay enough to state racing bodies. The organisations, such as Racing NSW and Racing Victoria, charge the bookies product fees, also known as race fields fees, which are often based on a percentage of turnover.
Tabcorp and Tatts pay more to the racing bodies because they hold monopoly licences to run the state's retail networks in TAB agencies and in pubs and clubs.
The popularity of online bookmakers has shifted wagering dollars away from Tabcorp and Tatts, which has reduced funding going to racing bodies.
"Corporate bookmaking is right now destroying Australian racing," Kennett says.
Spying their own opportunity, the Nationals will push for a new online wagering tax and redirect the proceeds to regional infrastructure. The plan became Nationals Party policy after Victorian Senator Bridget McKenzie proposed it at a federal council meeting in September.
Hitting online bookies with higher rates of tax is something that Tabcorp chief executive David Attenborough has been advocating for, for some time. At a recent speech to a Melbourne business lunch, Attenborough said legalised gambling should generate profit for operators, but also for government and community.
Attenborough estimates that corporate bookmakers paid $2.7 million in state wagering taxes and a further $90 million in racing industry contributions in 2014. Tabcorp paid $735 million to the Australian racing industry in 2014.Deal looks unlikely
The online bookies argue that Tabcorp's greater contribution comes from its monopoly retail licenses and that they are abiding by the product fee and licence fees put in place by the states.
Despite the wagering industry's interest in sitting down with politicians to nut out their own proposal, embracing a deal that includes paying more tax looks unlikely.
"That's not relevant to this," the Australian Wagering Council's Chris Downy says. "This idea that for some reason online operators should pay some sort of wagering tax, it's a furphy."
Waterhouse says a push for bookies to pay more tax is based on a "misconception" that companies such as William Hill don't pay their way.
"We pay $40 million in tax," he says. "We pay more in tax than we make in profit."
What Waterhouse is referring to includes standard contributions such as company and payroll tax, and the GST. In terms of tax to the Northern Territory, where the three William Hill ventures are licensed, each brand's annual wagering fee has just recently risen from $267,000 to $550,000.
In NSW, online bookies pay no license fee. With regards to racing or sports contributions, all bookies pay the same product fees, which vary from state to state. In NSW, for example, the fee is 1.5 per cent of turnover.
"I definitely think the industry pays to racing and to sporting bodies; we pay a significant share," Waterhouse says.
The idea of "jurisdiction shopping" to find the lowest fee regime is misguided he says. In the early 2000s the territory cut its turnover tax on bookies from 1.5 per cent of turnover to 0.33 per cent. The NT government allowed bookmakers to take novelty bets on things such as elections and interest rates, and promote bets based on prices offered by the TABs and their totalisator pools.
This lured them to the top end but now, Waterhouse says, there is less benefit as taxes paid to the sports and racing bodies are consistent across state borders.Nationals 'see something, tax it'
Kennett may agree that bookies should pay more to the racing bodies, but he does not think that a new tax is the way to ensure that. "I think with due respect their idea is short-sighted," he says.
"What the National Party is doing, it's old world – if they see something, tax it."
The former premier would rather the online bookies were stamped out. "Australia would be better off without corporate bookmakers," he says. But in Kennett's strong views there is a lesson for Senator McKenzie, Waterhouse and his industry.
Any debate about online gambling – whether it is the proposition of a new tax or opening up of in-play betting – has the potential to polarise opinion.
And it is why, privately, many in the gambling industry don't expect imminent change on either push. Prime Minister Tony Abbott and his advisers such as chief of staff Peta Credlin "don't want the words Coalition and gambling in the same sentence," one wagering company source said.
CIMB's Murphy agrees. When he was watching the first foray of Paddy Power into Australia, Murphy was sure the move was a play on the future of in-play betting.
"As an outsider looking into Australia – as I was, when I was Ireland – I was always of the opinion that live betting would be introduced," he says.
"But having lived in Australia for two years . . . I don't think that there is political will to be driving this agenda."
No government has the balls to stand up and put on the same restrictions that apply to poker machines and casinos, yet corporate bookmakers are in your face the whole time. Jeff Kennett, former Victorian premier
Fairfax Media Management Pty Limited
Document AFNR000020141012eaad0000f