Australia

Betting stocks struggle despite Australia’s gambling obsession

Over the past year, PointsBet, which has a large presence in Australia but is poised to become a major player in the US, has lost 70% of its share. Meanwhile, the share price of betting technology group BetMakers fell 60%. His ASX 200 index of benchmarks saw him drop 14% over the same period.

PointsBet is currently the 7th largest operator in the $13 billion annual US sports betting market with a 3.7% share. The US market is expected to grow significantly over the next few years as more states legalize the activity.

A Swans fan at the AFL Grand Final Parade in Melbourne.credit:Phil Hillyard

But while some investors are excited about the potential of the US market, others are concerned about PointBet’s cash burn. The company last year spent his $162 million of its $240 million sales budget solely on U.S. marketing. Chief Executive Sam Swannell said last month that marketing spending wouldn’t continue until 2023, but this year was a “necessary” set-up expense.

Industry giant and stalwart Tabcorp, who had brief aspirations to enter the UK and US markets in 2018, are in a very different position.. The company recently spun off its lucrative lottery business into a new entity after reversing a $3.5 billion acquisition approach from Entain.

It remains to be seen if Ladbrokes owner Entain will return to a different trend with Tabcorp. For now, Tabcorp is focused on building a digital strategy and catching up to digital rival Sportsbet, which controls his 50% of the local sports betting market.

Loading

Liu is bullish on Tabcorp stocks, especially during the spring betting season. “Tabcorp is the only company that has had a seasonally strong period and is still trading at a very low multiple, and analysts won’t upgrade, so it’s easy to see it going up 10-20%.”

Mr Liu said he wasn’t sure what to think of other Australian bookmakers looking overseas. The U.S. presents a ‘massive’ market opportunity with enviable lucrative potential, but securing an edge in a region where sports betting legalization and regulation is just beginning is a complex process. She recognizes that

“You have to compete aggressively for eyeballs through a lot of spending,” she says. It costs more.”

On Wednesday, Tabcorp unveiled the much-anticipated app for the Green Giant’s 783,000 active punters. The app has shaved nine seconds off his time to place a bet, incorporated his vision of racing and sports into the betting slip, and improved other techniques. The group has also followed in the footsteps of Sportsbet and Ladbrokes social gear sites, pledging to integrate homosexual multi-service and social betting platforms before Christmas.

Loading

In May, Goldman Sachs analyst Desmond Tsao downgraded TabCorp shares to a ‘neutral’ rating from a previous ‘buy’ view. His 12-month target price is his $1.07, while Tabcorp’s current price is his 95 cents.

In July, Macquarie analysts raised their 12-month forecast for Tabcorp to $1.20 from $1.05, ‘buying’ it after revealing the group’s tax benefits in Queensland and new digital strategies. upgraded to a rating.

fierce competition

Tabcorp is trying to reinvent itself, but faces daunting challenges in its local market as well.

Flutter now captures around 50% of Australian sports betting revenue from the merger of Sportsbet and BetEasy. The pair’s combined earnings in 2021 were $1.72 billion from betting over $15.5 billion. Sportsbet has increased its player base by 27% in 2021 against the backdrop of the shift to online during the COVID-19 pandemic.

Tabcorp also prepares to face another formidable new market entrant to be launched by Rupert Murdoch’s News Corp, and has also joined Enten to hold state gaming licenses in Western Australia and Victoria. are fighting

News Corp’s product Betr will be led by former BetEasy owner Matthew Tripp and CEO Andrew Menz. Tripp made Sportsbet the number two bookie in the country before founding BetEasy in 2014, so all eyes are on his new venture and the potential to disrupt the market.

Irvine is excited about Betr, saying investing in a social media strategy is a key value point for speculators and can unlock “explosive” growth.

“Most bookmakers are aware that that is the key to their success, and I am honestly surprised that it has taken this long,” he said. Irvine said that while he was impressed with Tabcorp’s new digital strategy, questions about some legacy parts of the company’s business remained unanswered. This includes three historic state-based totalizers where residents of New South Wales, Victoria and Washington can bet from cumulative prize pools rather than fixed odds. will be

“The market is very competitive right now,” says Irvine. “It is a difficult situation for operators as taxes and product fees have increased. I have to.”

The Morning Edition newsletter is your guide to the day’s most important and interesting articles, analysis and insights. SIGN UP HERE.

Betting stocks struggle despite Australia’s gambling obsession

Source link Betting stocks struggle despite Australia’s gambling obsession

Back to top button