Poll: Will Ladbrokes' move into Aus pay off?
Can Ladbrokes follow in the success of Paddy Power and make Australia work?
Ladbrokes last week took its first steps into the Australian market after it announced the acquisition of sports betting operator Gaming Investments for £13m.
Its move Down Under comes after William Hill backed up its takeover of Sportingbet’s Australian business in March with last month’s buyout of Australian operator Tom Waterhouse.
In addition, Paddy Power continues to go from strength to strength in a market dominated by local brands and recently posted a 33% year-on-year H1 online revenue increase to 86.5m.
So in this week’s poll we ask: Will Ladbrokes’ move into Australia prove successful?
The Gaming Investments deal included its subsidiary Bookmaker.com.au, which launched in February 2012 before achieving circa A$400m in amounts staked in the year ending 30 June 2013.
“The acquisition of this fast growing business represents an excellent opportunity for Ladbrokes to establish a strong presence in Australia, in line with our strategy to extend geographic reach to key regulated markets,” Ladbrokes’ CEO Richard Glynn said following the agreement.
The timing of the Gaming Investments purchase took many observers by surprise. Ladbrokes had recently announced a disappointing set of financial results and had just embarked on a second round of UK redundancies following it tie-up with Playtech.
The firm had also stated it was fully focused on the imminent online launch of its Sportium retail brand in Spain, a joint venure with Spanish operator Cirsa which is expected to go live in Q4.
The success of Paddy Power Australia is attributed to the aggressive marketing strategy it has embarked upon and Ladbrokes will also have to invest heavily in order to gain market share.
Cost per player acquisition is the country is estimated at around £700, roughly eight times the amount in Europe, although with a regulated market, a sports loving public, a population of 23 million and a capita spend of $45,000, the country is viewed as one with potential.
The company predicts it will make a small loss in 2013 but is confident of growth in 2014. But are you confident Ladbrokes can make their newly acquired Australian business a success? Cast your vote on the right hand side.