Gaming and wagering in Australia is a big industry and the reporting season for figures from the last fiscal year is starting. Profits for the big firms are expected to be up, but it has been suggested that diversification should be the name of the game if they want continued growth. Tattersall’s, Tabcorp and Unitab, Sky City and Publishing and Broadcasting Limited (PBL) are all playing for the Australian gambling dollars, and there is a new threat to the already crowded industry.

Gambling is becoming more sophisticated, with players looking for the best returns on their money and, as the betting exchanges give better returns, totaliser pari-mutuel wagering is becoming outmoded. The British online operator Betfair, the world’s leading betting exchange service, is seeking an Australian licence that would allow it to advertise and further challenge the established betting industry. Those in the racing business are divided over whether the possible arrival of Betfair on the scene would be beneficial for racing in Australia.

There has already been some consolidation in the Australian gambling industry and some analysts predict that more will come. Perhaps the company that has made the most moves to diversify is the Packer Organization with PBL, which has already sought opportunities outside the country including joint ventures with Aspinalls in the UK and Melco International in Macau. Just over one year ago, in July 2004, the company signed a 50:50 joint venture agreement with Betfair to develop the business in Australia and New Zealand, contingent upon Betfair being granted a licence to operate in Australia.

A subsidiary of Tabcorp Holdings is in a joint venture to provide systems and support services to the Chinese lottery market, awaiting authorization from the Chinese government for Keno lottery market operators, and Tattersall’s recently went public to take advantage of international and domestic growth options. Tattersall’s is part of a joint venture with a Swedish firm in Nigeria and operates lotteries in South Africa as well as in four Australian jurisdictions. Tabcorp, Australia’s largest gaming group, has submitted concept plans for one of the future Singapore casino sites and is considering developing a research and software development centre in India.

The gambling industry players in Australia have seen the need to diversify from their traditional local racing and casino bases. Growth in the international lottery and casino markets and adapting to industry changes should help keep the profits rolling in. (E-08.18.05)

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