Australian Gambling gives Operators a Revenue Boost

The world’s largest online gambling operators weren’t very happy with their results in the last quarter of 2016. Numerous sports betting giants reported huge losses on football matches. The unexpected US election of President Donald Trump didn’t help, either. But their Australian gambling arms fared so well, major operators still reported huge gains on the year.

When Paddy Power Betfair, which owns and operators one of Australia’s largest online betting firms, Sportsbet, released it’s Q4 earnings, they came with an impassioned statement. The UK-based company mourned a staggering £40 million (AU $66 million) loss on what it called a “customer friendly” season of sports and political betting.

“This started with the unexpected US election outcome, which cost the group almost £5 million, and concluded with our European sportsbooks losing money on football bets in the month of December,” Paddy Power Betfair explained to investors.

But it wasn’t a total loss. In fact, it wasn’t much of a loss at all for the global online gambling group. On the whole year, the company is still expecting to earn the same amount they’d previously projected; about £400 million to the good.

A great deal of that profit is coming from the firm’s Australian gambling arm, Sportsbet. For the last quarter of 2016, while UK operations were paying out huge losses, Sportsbet managed to see a 25% growth spurt on the stock market, posting 18% revenue gains over 2015’s results.

A similar story came out of Ladbrokes Coral Group just days prior. Ladbrokes is expecting to pull a £280 million profit, also meeting previously determined market expectations. Like Paddy Power Betfair, Ladbrokes was lamenting the fortunes of its UK sports bettors in the final quarter.

Despite that, the UK-based gambling giant still posted 17% revenue growth year over year for the Ladbrokes division, and 13% growth on the Coral side. And also like Paddy Power Betfair, Ladbrokes has it’s Australian gambling business to thank for it.

The company’s Australian division posted gains that were 45% ahead of 2015’s results, with stakes soaring 57% in the same period.

“While the sporting gods did not look favourably on us in the period, it is pleasing to report that the business continued to perform well and that our full-year numbers will be in-line with expectations,” said Ladbrokes CEO, Jim Mullen, in the latest earnings call with investors.

“It has been an encouraging start to the life of Ladbrokes Coral Group plc,” he continued, referring to the merger of the two live and online gambling brands that was finalized in November.

“Good progress is being made on all the key integration workstreams. We saw continued growth in our digital division with Australia going from strength to strength and further growth in multi-channel sign-up,” he concluded.

Clearly, the Australian gambling market – particularly the digital side of it – is thriving. While punters have been graced with good fortune, the steady market growth Down Under is a strong sign that major betting companies are faring very well. Just imagine what the profit margins for these companies could have been if a few football matches had gone differently, and if Hillary Clinton were sworn in as the new US leader last week?