Aussie customers visiting the Betfred.au dotcom site last December 01, 2014 were met with an announcement that the UK bookmaker's AU mobile sportsbook has ceased trading, and that all account deposit balances will be credited to their registered card. The Betfred Australian betting site launched only in May of this year, by introducing an Aussie-dedicated mobile sports betting app with a Lotto betting service, in order to make a difference in the already saturated Australian sports betting market.
Betfred Australia operated under the helm of Luke Brill, a former Centerbet Marketing Director, recruited by the UK bookmaker to assume position as Managing Director of its Australia division. The mobile sports betting launch in the “land down under” in May 2014 was only the initial phase; GTECH was commissioned to provide more betting products and services before the end of 2014 and in collaboration with Betfred's Degree 53 mobile development team.
Apparently, the strategy did not pay off since the results of the annual review indicated that the Northern Territory licensed-Australian online betting site would not be able to hold its own amidst the stiff competition posed by other globally operating sportsbook giants like Ladbrokes, Paddy Power, and William Hill. UK Betfred's strategy in entering the overcrowded Aussie gambling market was no match against the other bookmakers' high-end tactic of acquiring existing local sports betting companies. Moreover, the companies acquired are those that have already carved out a niche as leading sports book operators in the Northern Territory.
According to the review, growth was hampered by postponements in the launch of the other sports betting products, particularly horse racing offers. The product delays, combined with the rising marketing and operational outlays in the region, all contributed to its less than sustainable, if not stellar performance during the past six months, in the highly competitive Australian gaming market.
In an interview conducted by eGR Magazine, Betfred Group Chief Executive John Haddock commented that based on the results of their Australia review, they arrived at a decision to optimise the company's marketing spend and continuing infrastructure costs by using it elsewhere, rather than pursue a market that they feel has become overpopulated.
It would not be too farfetched to likewise consider that the focus of recent political initiatives in the Northern Territory may have influenced Betfred's decision not to further the development of the Australia-facing operations. South Australia Independent Senator Nick Xenophon is currently urging the Northern Territory (NT) government to “squeeze out more money” from Internet-based sportsbook operators. He called the government's attention to the more than $8.5 million bets placed at online sports betting sites, for which the NT region gained only $2.5 million in tax contributions.
Senator Xenophon bewailed NT's tax laws as an “absolute gift” to online bookmakers, referring to the low tax cap imposed on online betting companies to keep them from taking their business to other Australian regions like Tasmania. Although NT Chief Minister Adam Giles was quick to defend the amount of taxes that bookmakers pay, there is no telling which way the wind will blow in the near future.
Since Betfred has established its AU business in Sydney and Darwin and holds a license issued by the Northern Territory Gaming Commission, the decision to spend the company's allocations for marketing and infrastructure costs elsewhere, might prove to be a better decision in the end.