This is a guest contribution by Nathan Rothschild co-founder and partner at iSport Genius. If you would like to submit a contribution please contact Bill Beatty for submission details. Thank you.
If the jury remains out on what state the outgoing Paddy Power Betfair chief executive Breon Corcoran leaves the overall business when he steps down later this year, there is one division of the company where the report card comes back studded with gold stars.
This is the Sportsbet operation in Australia that, as the company’s recent half-year results showed, has been firing on all cylinders despite the twin regulatory and trading pressures being faced by the business.
Under the stewardship of the chief executive of the Australian arm, Cormac Barry, in the first six months of this year staking at Sportsbet rose 16% in constant-currency terms to £1.7bn while revenue rose 15% to £173m and underlying EBITDA was up a whacking 52% to £54m. This was off the back of a rise in active users of 13% to nearly 700,000.
All this despite the company being forced by the regulator to switch off its so-called click-to-call in-play telephone betting operation which in the prior-year period had represented 8% of revenues.
It is an impressive performance in an exceptionally tough market – here I will cite the fact that bet365 was recently reported to have turned a profit in Australia for the first time since launch in 2012.
Still Sportsbet leads the way and the manner of innovation in marketing and product shows it has learnt a few of the PR tricks from the Dublin-based parent. Just look at the recent ‘putting the ‘roid in Android’ ad campaign featuring the disgraced sprinter Ben Johnson for an example of how Sportsbet garners the column inches with some of its marketing efforts.
The ads were controversial but they worked. And they are backed up by popular product enhancements such as to 24-up-you win (the AFL version of the football’s 2-up-you-win promotion) and the Power Play odds booster and same-game multiples.
Taking irreverence seriously
It’s the kind of marketing and product combination that resonates well with the Australian punter; irreverent but at the same time taking its sports and its punting seriously. It understands the customer and gives them what they want, whether that be price boosts or, as with our product, informative and engaging data content.
Australian online sports-betting offerings have been evolving at speed in recent years and despite the regulatory hurdles – no online in-play, no online gaming – I believe the evolution of the market offers up some clues as to the winning formula for any online sportsbook.
In Europe, though the allowable product offering might be broader in scope, the competitive backdrop is no less fierce. The customer has also evolved and is now much more demanding. They want service, they want speed of transaction (hence Johnson’s appearance in Sportsbet’s TV ads) and they want engagement.
Marketing helps but the broader product offering needs to be more than just up to scratch. In order to achieve this, a quality product needs to be provided that, once a customer is on the site or the mobile offering, keeps them punting and playing. Proven products are hard to find, but are highly-valuable in competitive markets.
I don’t think it is a coincidence that Sportsbet has readied itself for the upcoming climax to the Australian sporting year with the Australian Football League and National Rugby League finals approaching. High-profile sporting events do a lot of the hard yards for the sports-betting operators in bringing the consumer to their sites. But keeping them with you is the all-important factor as is giving them a reason to return.
For full disclosure, iSport Genius recently signed a deal with Sportsbet to add our consumer-facing data proposition to the offering and we are delighted to be partnering with the Australian market leader.
Australian punters are already familiar with our product as we have also been working with Ladbrokes since early 2016. We await to see how the business performed in the first-half of this year, but at the time of the year-end results Ladbrokes Coral chief executive Jim Mullen said the team there had “knocked the ball out of the park” after the operation achieved a 67 percent rise in revenues for 2016.
Back last year before the merger with Coral, Mullen at Ladbrokes called his company’s Australian arm one of the “jewels in our crown” and I think similar compliments could be paid to others among the market leaders. I believe there are lessons to be learnt from the market, and dare I say it, more operators might benefit from following some of the Australian rules.