Tax impacts Sportsbet
SPORTSBET suffered a revenue hit the past quarter, fuelled by adverse sports results and increased promotional spending in an attempt to lock in customers ahead of new wagering taxes.
The hit was revealed in quarterly results of Paddy Power Betfair, Irish parent company of the online Australian outfit.
Revenue in Australia fell 2 per cent in the three months to September quarter due to adverse sports results in August, driven by racing, AFL and NRL.
The bookmaker added that “strategic investment in promotional generosity” had also caused the revenue dip.
Paddy Power Betfair chief Peter Jackson said he had just returned from visiting Australia, where new regulatory and tax headwinds were coming into effect.
Online bookmakers have been hit with new point-ofconsumption taxes across Australia.
To combat the impact in the short term, they have significantly increased their marketing spending in an attempt to increase scale as a means of offsetting the new taxes.
“To target additional market share gains, we are seeking to drive increased customer activity through additional investment in promotional generosity and marketing,” Mr Jackson said on an investor call after the quarterly result was released.
“This investment is deliberately focused on quarter three and this, coupled with adverse sports results during August, meant quarter-three revenues declined year-on-year.
“That said, I’m very pleased with Sportsbet’s momentum, as evidenced by the 25 per cent staking growth and strong customer acquisition and retention.
“This gives us continued confidence that we’re well positioned to win further market share.”