Online wagering pioneer Matt Tripp has forecast there are choppy waters ahead for corporate bookmakers as the racing sector emerges from the “morphine hit” provided by the perfect storm of the COVID crisis.
Tripp says corporate bookmakers were major beneficiaries from the billions of dollars that governments pumped back into the Australian economy during the COVID disaster.
Racing was able to keep going, apart from a current six-day shutdown in South Australia, and bookmakers were big winners as extra customers turned to the punt as other social outlets were often not possible during COVID.
Tripp is a former boss of BetEasy but is best known for building up Sportsbet from a $250,000 operation in 2005 before selling it for to betting giant Paddy Power for $388million.
Tripp, who won’t comment on reports linking him to a deal that could potentially see him emerge as the boss of the TAB’s wagering arm, thinks corporate bookies will be feeling pain in the next 12-18 months.
“I think the industry in the last six months has had a morphine hit that I don’t believe is sustainable,” Tripp told Racenet.
“Racing has had the luxury of being able to keep ploughing on through COVID when, under normal circumstances, it would have been competing against a lot more sports around it.
“There was limited sport on for quite some time and the racing show still went on.
“That will certainly be reflected in the corporates’ figures in terms of a regeneration of racing interest as a direct correlation to turnover and revenue.
“But I don’t think that’s sustainable.
“There have been some huge government handouts around JobKeeper and everything that goes with it.
“There have been billions of dollars injected into our economy and the fact is the corporate bookmaking industry has been a direct beneficiary.
“The excess cash we use for social activities in our day to day lives, that we would normally go out with or go to the movies, a lot of that hasn’t happened.
“The knock-on impact is a fair bit of it has been put into the wagering industry – these operators have benefited from it but it’s going to get challenging from here.
“When things normalise over the course of the next 12-18 months, I think there will be a lot of middle to low tier wagering operators who will be feeling the pinch.
“Don’t forget there were operators who were feeling the pinch pre-COVID with the introduction of point of consumption taxes and product fees getting higher and the squeeze going on around the general competitive landscape.”
Tripp, who is a director of NRL premiers the Melbourne Storm, says big wagering operators can also expect some turbulent times ahead.
“If you look at Sportsbet’s record over the course of the last ten years I think they have grown in profits every year for ten years,” Tripp said.
“But I believe 2020 versus 2021 we will see a decline in profits for the first time since I took over there.
“I believe that will be the case with all of them, Ladbrokes, Bet365 and the others.”
Melbourne Storm chairman Matt Tripp with Cameron Smith and coach Craig Bellamy looking on as well as former chairman Bart Campbell. Pic: Ian Currie.Source:News Corp Australia
Meanwhile, Tripp believes the Melbourne Cup carnival needs to reinvent itself to help assure its future by appealing more to the younger demographic.
Tripp says data shows the average age of racing followers is rising every year and Victoria, in particular, needs to pull out all stops to attract younger fans in the 18-30 year age bracket.
“The competition that has been stimulated by Peter V’landys and Racing NSW has been a good thing for Australian racing,” Tripp says.
“Victoria probably now needs to strike back with something innovative and something that hasn’t been thought of before.
“They need to be able to sell it better to the demographic that counts.
“A lot of it comes down to how you market it.
“For instance, even though it probably will never happen, I love the idea of lights at Flemington.
“If you want to get really creative, start thinking about lights there and even running the Melbourne Cup at night even though some of the purists would probably tear the grandstands down.”
Originally published asMatt Tripp’s ‘morphine hit’ warning to wagering operators
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