Q&A: Craig Nugent, Tabcorp wagering and media COO
Nugent speaks to eGR about in-play betting and how it's attempting to bridge the gap between online and retail
Despite an influx of foreign gambling companies in recent years, Tabcorp has maintained its position as Australia’s biggest operator.
The Melbourne-based firm’s formidable retail presence under the TAB brand gives it an additional advantage over its rivals including Sportsbet and William Hill, and the integration with the operator’s online business has been an area of particular focus in recent years.
And in its recent full-year financial results managing director David Attenborough highlighted the strength of Tabcorp’s “multi-channel distribution strategy” as it prepares to roll-out new features and products over the coming months.
eGaming Review caught up with COO of the operator’s wagering and media business Craig Nugent to discuss the evolution of its online business in more detail and to find out how it plans to fight off the market competition.
eGaming Review (eGR): How important is digital to Tabcorp’s overall wagering business?
Craig Nugent (CN): Tabcorp achieved close to AU$3.5bn (£1.6bn) in digital wagering turnover in FY15. That makes up more than a quarter of our overall turnover, with retail still accounting for the lion’s share. Digital is critically important for a number of reasons. Firstly, more people are obviously choosing to transact through digital channels be it banking, shopping or betting. We don’t base our business on dictating to the customer where they will bet with us and on what product.
We have to give each one what they want. So we have to have best-of-breed digital channels. And as we are the sole retail operator in the markets we operate in, digital is the channel where competition is most relevant for us. We do more than AU$1bn (£460,000) more in digital sales than our closest competitor. We continue to invest in our digital channels and have grown our digital team to more than 100 people.
eGR: How has your online product evolved over the last few years?
CN: We’ve come a long way since the TAB first introduced internet betting in 1999. Perhaps the most significant recent trend has been the increase of mobile sales as a proportion of all digital turnover. Three years ago, it accounted for just 12%. Today, it accounts for 63% and growing as people migrate from desktop PCs. Services we have pioneered, such as the being the first wagering operator to offer tote betting via a native app, the integration of live racing and sport vision and fingerprint recognition technology have increased the appeal of our digital channels to the customer.
eGR: What changes do you have in store for your existing products and can we expect any more launches soon?
CN: We will continue to bring new products and updates to the market. The fact that we now have an internally-led team of digital specialists across marketing, technology and product development has made us much more agile. We roll out new enhancements and new products to customers every two weeks. Future digital innovations will be based around three pillars – a customer experience that helps our brands stand out from the pack, a focus on data and content so wagering can become a more integrated part of the sports-watching experience, and digital and retail convergence.
eGR: Has Tabcorp considered launching a product to essentially facilitate in-play betting online?
CN: We offer live betting on sport through our retail outlets and through a telephone-operator betting service. That’s what Australian law permits. We do not offer in-play betting online. The regulator (Australian Communication and Media Authority) has referred those operators offering online in-play betting to the Australian Federal Police. So it would be irresponsible of us to offer such a service.
eGR: Do you think products from William Hill and bet365 are within the spirit of the law?
CN: That’s a matter for those operators. Ladbrokes introduced a similar service but withdrew it and other wagering operators have chosen not to offer it. The biggest priority for Tabcorp is clarity of the laws and their enforcement. We want to operate in an environment set by the government and regulators, with clear rules which are enforced.
eGR: Do you think the various regulatory authorities are open to the idea of allowing online in-playing betting?
CN: The Australian Government has announced a review into the impact of illegal offshore wagering and we expect the review will extend into related issues, such an online in-play betting. The practice of wagering operators offering online in-play betting, in breach of the law, has to be addressed. We also believe regulations should be tightened up on unlicensed offshore operators. It’s our view that wagering operators should be licensed in Australia in order to be able to take bets from Australian residents.
eGR: How is Tabcorp attempting to bridge the gap the between digital and retail wagering? Are you trying to make the experience as seamless as possible between the two?
CN: Absolutely. One of our priorities is to further integrate retail and digital. We’re introducing some pilot retail sites this year which link digital features to the retail environment such as digital form guides, digital messaging and promotions and bring-your-own-device functionality. The two channels are complementary and many customers transact across both. Many customers also deposit funds in retail outlets to place bets online. Retail is a very important and powerful channel as the social nature of betting in one of our agencies, pubs or clubs is something many customers enjoy.
eGR: How mature is the Australian online gambling market compared to other comparable markets and how do you see it evolving?
CN: The Australian wagering market is a massive market. It’s now a $27bn annual market and still growing. It will continue to be a highly competitive battleground. Retail will continue to be an important channel for customer acquisition and retention.
eGR: Does the increasing presence of major foreign gambling brands worry you at all?
CN: We have been in a competitive environment for some time. Despite this we have a proven record of growing our wagering revenues and leading the market. That’s despite our competitors operating in an environment where they pay little wagering tax and return substantially less to the racing industry.
There has been mixed performance among the foreign wagering operators. Many have been spending lots of marketing dollars and are still struggling to be profitable. We have a compelling proposition. We have trusted brands, more channels than any other wagering operator and a multi-product offer.