The Australian Government’s ban on the promotion of live odds will barely put a dent in the revenue of gambling industry’s biggest players but will hurt non-listed corporate bookmakers such as Tom Waterhouse, analysts said.
“Smaller corporate bookmakers will be more affected than listed peers as they do not have the retail presence the make up for the loss of exposure they will suffer as a result of the ban,” said one gaming analyst from a major bank, who spoke anonymously.
Under the government’s new rules the promotion of betting odds on broadcast media will be prohibited during live sports matches.
All generic gambling broadcast ads will also be barred while the game is on, but would still be allowed before or after a game, and during breaks in play, such as half-time.
Tyndall AM gaming analyst James Nguyen said it was important to remember live odds bets could only be placed over the phone or at a physical outlet.
Listed bookmakers such as Tabcorp, which brings in two thirds of its annual revenue through its network of 2100 pubs, clubs and licensed betting shops, will be able to capitalise on this presence to maintain brand awareness.
“From a valuation perspective, the impact [on listed gaming companies] would be minimal,” Nguyen said, agreeing that corporate bookmakers would bear the brunt of the ban.
Nguyen also said it is estimated Tabcorp only takes in around $100 million in annual revenue from live wagers. In its last annual report it posted annual revenue of more than $3 billion.
A Deutsche Bank note out yesterday said the Government’s ban on the promotion of live odds would be a “slight negative” to listed bookmakers Tabcorp and Tatts.
However, the report by Deutsche Bank analysts Mark Wilson and Daniel Pi noted sports betting accounted for just 15% of the total wagering market.
“In FY12, live betting increased to 15% of the sports wagering market, having increased by 20%.
“The ban will still allow the promotion of live odds before and after the game, and it will also allow generic gambling ads during scheduled breaks in play,” the note said.
Deutsche Bank reaffirmed its hold rating for Tabcorp and Tatts.
“The broadcasting industry is to submit a revised code to the ACMA. Should the industry elect not to adopt this, the Government would look to enact legislation, and it could also impose a total advertising ban should there continue to be excessive advertising,” the analysts said.
Corporate bookmakers supported the ban after it was announced at the weekend by Prime Minister Julia Gillard.
According to Fairfax media, Michael Sullivan, the boss of Australia’s biggest corporate bookmaker Sportingbet, backed the calls for the complete ban on live odd ads, and laid the blame on Tom Waterhouse, accusing him of acting irresponsibly.
“What he’s doing now is affecting all our businesses,” said Sullivan in the article.
“I’m the biggest consumer of rugby league in the world and it makes me sick in the guts when he comes on TV. The frequency of his appearances is what’s also driving people mad and Channel Nine has a lot to answer for.
“We’ve been there building our business for 12 years, as has Sportsbet, as has Tabcorp but this whole thing is about Tom. Quite frankly, it’s gone too far,” he said.
“Tom [Waterhouse] represents probably 2 per cent of the market. He’s trying to court this hype – perhaps with an eye to selling his business – and, quite frankly, I think he’s acting irresponsibly,” he said.
In the same article Betfair, which no longer pays for live odds advertisements, said it would be comfortable with tighter controls.
In a statement Tabcorp said it supported tighter controls if they were applied across the board.
TomWaterhouse.com Marketing and Communications Manager Warren Hebard declined Business Insider’s request for comment.