Australia
Sportingbet Australia had an excellent year with NGR up 55% making the business the fourth largest territory in the Group, accounting for 13% of total NGR. The growth was driven by a 34% increase in the number of customers from 23,094 to 31,032. The increase in NGR was particularly pleasing as there was an unprecedented outbreak of equine influenza in August 2007 which curtailed horse racing, the Group’s main product in Australia, in both Queensland and New South Wales, for much of the first half of the year. Despite the interruption, the business grew by significant volumes to stand clearly as Australia’s number one independent bookmaker.
The NGR percentage for the region, after betting taxes and product fees, was 3.7% (2007: 2.9%), amounting to gross gaming revenue of £23.5m (2007: £15.8m). The relatively low margin compared to the rest of the Group is due to a combination of the betting market in general in Australia and the large proportion of the Group’s business which derives from the telephone rather than the internet. Typically, internet customers are more frequent bettors and generate a higher margin, but have a much lower average stake size.
Sportingbet’s Australian business operates under a Northern Territories licence, which only permits sports betting.
Recent developments in the States of Victoria and New South Wales have removed restrictions preventing bookmakers licensed out-of-state from advertising within these States. As Australia’s largest independent bookmaker these developments are welcomed and will further assist the promotion of the business.
The Australian betting industry has recently been subject to additional charges introduced by State based horse racing boards, in particular, in 2006 Racing Victoria Limited introduced a product charge for the approval to publish race cards or races held within the State of Victoria. A similar turnover based fee was introduced by the State of New South Wales on 1 September 2008. Whilst an additional cost to the business, these fees have been fully factored into the Group’s profit expectations.