Illegal offshore operators comprise 15% of Australian market, Sportsbet Chief Executive says
Illegal offshore operators now comprise 15% of Australia’s online sports betting market.
The figure, which is growing, highlights one of the key challenges licensed operators face amid rising taxes and tightening regulatory restrictions, according to Sportsbet Chief Executive Barni Evans.
Sportsbet is Australia’s market leader in the online sports betting space with well over 40% of market share.
Evans was speaking at the Regulating the Game conference in Sydney on Wednesday, where he reflected on concerns relating to rapidly rising costs around product fees and recent increases to point-of-consumption taxes across a number of states.
Around 49% of Sportsbet’s revenues now go to paying various fees and taxes, he claimed.
“[The rise of] the illegal, unlicensed offshore market is real,” Evans said, echoing comments made by the former Chief Executive of the Australian Criminal Intelligence Commission, Michael Phelan, earlier in the week.
“If you watch the Australian [Formula 1] Grand Prix this weekend, there will be no licensed Australian wagering brands around [the track], I guarantee it. The only gambling brands you’ll see [advertised] will be offshore because they’re the only ones that can afford it. It is 15% of the market, it’s growing like crazy and it doesn’t just threaten [the licensed market], it risks annihilating [it].”
While Evans acknowledged his company has a responsibility to pay tax and to help fund the local sports and racing bodies it works with, the sheer scale of cost increases is causing a reduction in business efficiency across all of Australia’s corporate bookmakers.
“All are making less money than they were before,” he said. “I think PointsBet, the year before last, as a publicly listed company, they said their objective in 2024 was to break even. Imagine being a shareholder in a company that told you their objective in the year was to make no money!
“That’s the real impact of taxation and like any commercial organization, we’re all responding in commercial ways. Overrounds (a measure that can be thought of as an approximation of a bookmakers’ edge) have climbed up a bit. We need to be very, very careful about that because customers are very sensitive when they don’t get the right price on their favorite that they think is going to win.
“All brands in market have suppressed slightly their generosity (comps) because for most companies that’s their biggest cost center.”
Licensed operators have also cut back their advertising spend by 40% over the past year, opening the door for offshore brands to fill the void, Evans explained.
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