It’s no secret that CrownBet has had a rough couple of years. The company had issues in Macau, which resulted in the jailing of Australians by the Chinese government, and the company had to pay a fine. In addition, CrownBet also faced a large fine in Australia for tampering with the slot machines at its marquee property, Crown Casino, in Melbourne.
In addition, James Packer, the owner and CEO, resigned from the company and sought mental health counseling after a series of failed business enterprises and a failed engagement with pop diva Mariah Carey. However, now that CrownBet has been purchased by the Canadian company, The Stars Group, it may be on the upswing, and that includes reviving the well-loved named, Sportingbet.
CrownBet, now a subsidiary of The Stars Group, asked the Australian Securities Exchange if it could revive its former name of Sportingbet to rebrand it and work toward re-entering the sports-betting market. Sportingbet has a long history of success in Australia, with hundreds of millions of dollars made in sports wagers.
The name was purchased by the William Hill Group in 2013 so it could enter the Australian market. However, the new company decided to let the name Sportingbet go so it could concentrate its resources on its brand, William Hill Australia. The Australian sporting division of William Hill did not do as well as the company had hoped, however, and was sold to CrownBet for about $300 million, which was short of expectations.
It is estimated that William Hill’s revenue in Australia was about $200 million, which was short of expectations for the company. At the time the company was sold, CrownBet was one of the largest sportsbooks in Australia, behind Tabcorp (an Australian company) and Sportsbet (owned by Paddy Power Betfair, a U.K./Irish company).
Challenges and Prospects for Sportingbet
While some Australian analysts are looking favorably on Sportingbet’s re-entry into the Australian market, because of its profitability and name recognition, other analysts stated it will be difficult to recapture a market share after being gone from the Australian market for five years. This is especially true because of the emerging importance of point-of-consumption (POC) taxes, which are set to take effect in many parts of Australia either in the fall of 2018 or the beginning of 2019.
The POC taxes have a direct effect on online gaming because online gaming (including sporting wagers) are taxed at a rate between 8 percent and 15 percent. While it is not clear at this time how much of an effect the POC tax will have on sports gaming, it is estimated that the tax will have an effect on the bottom lines of gaming companies, which may mean that the new company will struggle to make a profit.
However, it is possible The Stars Group is beginning to revive the brand again for a market push elsewhere. The company may want Sportingbet to dive back into the market in multiple countries, including Australia. The Stars Group is based in Canada, and with the recent U.S. Supreme Court decision to allow sports gaming in the United States, the group may be looking at new avenues for its online gaming platform.
If several states in the United States, especially those on the border with Canada, decide to legalize sports gaming, the platform would be poised to possibly enter the market. Whether The Stars Group is reviving Sportingbet to fully enter the Australian market, or perhaps only enter the market in a limited fashion so it can enter other markets fully, remains to be seen.
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