Online bookies raise the stakes

Rugby league would lose revenue and Aussie Rules would gain revenue if the Australian Rugby League Commission changes the structure of fees it charges online corporate bookmakers, one of the largest bookmakers warns.

Melbourne-based Sportsbet says that if the commission changes the way it charges fees to a percentage of all betting turnover from the current model based on gross winnings, the costs would become prohibitive for the bookmakers and it would encourage punters to bet on other codes.

Rugby league, like the AFL, now charges corporate bookmakers a fee based on 5 per cent of gross winnings. However, the commission, which oversees rugby league, said in April it was reviewing its position on product fees after Sportsbet lost a High Court case that upheld the right of Racing NSW to charge wagering operators a fee of 1.5 per cent turnover.

If it changed to that model, the NRL’s fee income would surge initially to $8.6 million from this year’s likely figure of $2.3 million. However, according to a Deloitte report commissioned by Sportsbet, by 2015 that figure would fall to $2.6 million as operators cut marketing on rugby league betting and offered worse odds – driving customers to codes such as AFL and horses. The report predicts that the NRL would be paid $5.8 million in 2015 if the current system were maintained.

“If we’ve got a loss-making product, we’re not going to spend much trying to get people to bet on that,” Sportsbet chief financial officer Ben Sleep says.

The commission has not yet made a decision on a fee structure.

“We want to work with corporate bookmakers and other parties to understand as much detail as we can to make an informed decision,” spokesman John Brady says.

There is a range of options for fee structures, Brady says. “The options have been strengthened somewhat by the High Court. The High Court was very strong that sports are entitled to some return.”

Sportsbet has about 40 per cent of the country’s estimated $7 billion online corporate bookmaking market, which excludes the online sales of operators Tatts Group and Tabcorp.

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