Paddy Power Betfair is poised to make a major push in Australia following what chief executive Peter Jackson has called “disruption” in the market.
Outlining the company’s plans in a recent trading report, Jackson noted “good underlying growth” in Australia as a reason to capitalise on positive market conditions.
“In Australia, Sportsbet continues to perform well and is targeting further market share growth, with additional investment planned to take advantage of any disruption arising from market consolidation and the introduction of increased taxes,” Jackson wrote in the May 2 report.
Expansion the Key to Beating Taxation
Doubling down on his comments in a conference call, Jackson said the extra investment would be in the region of £10 million ($18 million). With New South Wales and Victoria currently looking to follow South Australia and implement state-based iGaming taxes, operators have been clamouring for position.
William Hill has used the legislative changes to sell its Australian assets to Crownbet in March, which had sold 62 percent of its shares to The Stars Group just weeks before. Prior to Crownbet’s acquisition, Tabcorp and Tatts Group agreed to merge in 2017.
Off the back of this move towards greater consolidation, Paddy Power Betfair is looking to strike while its competitors are going through a period of change.
“You’d expect us to look at opportunities to bolt on our businesses in Australia; we’ll be very disciplined,” Jackson told the Irish Independent.
Big Plans Ahead of the World Cup
Thanks to underlying customer activity and local currency exchange rates, Sportsbet’s revenue increased by 6 percent during the first three months of the year. This, coupled with apparent disruption within the market, is the reason for Jackson’s positivity.
However, despite the desire to expand in Australia, Paddy Power Betfair’s Q1 results were flat. Comparing year-on-year revenue, 2018’s first trading update noted a 2 percent drop in takings.
The downturn has been blamed on “adverse sports results,” something the UK-based betting operator will be hoping to offset this summer.
With the World Cup likely to attract upwards of $1.8 billion in bets from British customers alone, every major bookmaker will be putting out its best offers for the soccer showdown. For Jackson, this is an opportunity Paddy Power Betfair won’t miss.
“We are increasing investment in promotional generosity and marketing activity,” Jackson said in light of his Australian expansion plans.