Wednesday August 29,2012 : ONLINE BETTING WILL DRIVE SPORTS BETTING BOOM DOWNUNDER
 
Deloitte report commissioned by Sportsbet predicts a A$3.3 billion market
 
Online betting is set to drive the Australian sports betting market to new heights, particularly in the nation's two football codes, a study by the internationally respected business services firm Deloittes indicates.
 
The study, commissioned by internet betting firm Sportsbet.com.au predicts that betting on Australia's AFL and NRL football codes will double over the next five years to A$3.3 billion, driven by strong growth through online and mobile channels.
 
The Deloittes study found that annual betting on the AFL has reached A$900 million, with A$750 million wagered on the NRL. This is forecast to rise to A$1.8 billion (AFL) and A$1.5 billion (NRL) in five years.
 
Total turnover on sports betting has grown more than 13 percent a year, driven by a 28 percent rise in online sports wagering, the research initiative discovered, noting that this is still significantly smaller than the overall A$20 billion in bets pulled in by racing.
 
The two Aussie football codes account for around half of all Australian sports betting and some 7 percent of all betting in Australia.
 
Deloittes says that Australian bookmakers generated an estimated A$81.5 million in revenue from NRL and AFL wagering in 2011, with betting companies contributing about A$45 million a year to football-related products through sponsorship and advertising expenditure. Most of these deals are based on a gross-win model in which a percentage of profit is paid to the code.
 
There are reports the NRL is considering changing its model to a 1.5 percent take of overall turnover, which Deloitte says will drive down the value of bookies' profits and revenue to the code, and reduce the profitability of NRL wagering products.
 
In turn, this could persuade betting firms to reduce or reallocate marketing expenditure, or reduce odds offered to the punters.
 
Sportsbet chief executive Cormac Barry commented that the Deloittes report illustrated how important the industry is in a financial sense to the sport and racing sectors.
 
Barry warned that if the NRL did change its model, punters would turn away from Australian betting websites in favour of better deals on offshore operations that may not be as well regulated.
 
“This increases the risk to the integrity of sport and is likely to result in reduced returns to sport from product fees over the long-term. Unregulated foreign sites do not pay product fees, while in the past five years, Sportsbet alone has paid more than A$50 million in product fees," the online gambling executive said.