Sports betting is booming. DIGITAL IMAGE: JUDY GREENBetting on Australia’s two largest football codes is set to double over the next five years to $3.3 billion, driven by strong growth in online gambling on sports, a Deloitte report says.
The report, commissioned by online bookmaker Sportsbet南京夜网.au, found annual betting on the AFL had reached $900 million, with $750 million wagered on the NRL. This is forecast to rise to $1.8 billion (AFL) and $1.5 billion (NRL) in five years.
Deloitte found total turnover on sports betting has grown more than 13 per cent a year, driven by strong growth in online sports wagering of 28 per cent.
But overall sports betting remained significantly smaller than racing; $3.3 billion at present compared to $20 billion.
Australia’s two favourite football codes accounted for about half of all sports betting and 7 per cent of all betting in Australia.
Australian bookmakers generated an estimated $81.5 million in revenue from NRL and AFL wagering in 2011, with bookies also contributing about $45 million a year to football-related products through sponsorship and advertising expenditure.
Individual bookies have product-fee agreements with sporting bodies, but most 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 per cent take of overall turnover, which Deloitte says will drive down the value of bookies’ profits and revenue to the code.
The report says that if this model is adopted, it would significantly reduce the profitability of NRL wagering products.
This would force betting agencies to take action to preserve profitability, including significantly reducing or reallocating marketing expenditure, and reducing odds offered to consumers, it says.
Sportsbet chief executive Cormac Barry said the report showed “the importance of our industry as a financial contributor to sport and racing”.
Mr Barry said if the NRL did change its model, punters would turn off local sites in search of better odds on “unregulated” overseas sites.
“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 $50 million in product fees,” he said.
This story Administrator ready to work first appeared on Nanjing Night Net.