Q&A: Brean Corcoran, head of online, Paddy Power
Paddy Power's head of online and non-retail discusses Down Under, Australian acquisitions and ad bans.
EGR: Why go all the way to Australia to buy a business? And why not buy all of it?
BC: We looked hard at Europe and other places, and we wanted to take a bet on a jurisdiction and/or a company that we knew would be around in 10 years’ time. Our experience in Germany is that while something may look positive one day, it could get switched off the next. We filtered places where there were strong appetites for gambling against those where there were strong appetites for betting, and Australia scored highly on that. There’s a very strong betting culture. Put on top of that the English language, the legal safety, the betting culture, our brand will work well there over time.
EGR: Why go into the Australian market via an acquisition? Paddy Power was applying for a Northern Territory licence at one point.
BC: We looked at both options but we managed to do a deal with what we think is the best management team down there. There is local expertise” Australian racing, horses and dogs, and Australian sports. There are regional biases here that were best served by having a local management team. You can also buy a business today that has momentum, or have to work with start-up losses that can last for three or four years.
EGR: Will you go after more Aussie businesses?
BC: We now have a footprint down there and the local management team believes there remains more opportunities down there. But I think the overlap of customers becomes an issue. That’s it for the minute.
EGR: What opportunities are there for cross-selling UK and Australian sports?
BC: Horse racing is 80% of Sportsbet’s business, so we think there is an opportunity to cross-sell tennis and golf and English Premier League, and Northern Hemisphere rugby. Plus we intend to use some of their expertise selling Aussie sports to our customers in Ireland and the UK.
EGR: Would you describe Oz as a new territory? Where would you rank it?
BC: It’s a territory with well established regulation that’s relatively fluid at the minute, as it is in much of Europe. But we know there will be people betting in Australian in 10-20 years’ time, whereas you can’t say that with complete certainty about other parts of the world.
EGR: The lifting of the advertising ban in October last year has had a major impact in Australia”¦
BC: You can now advertise from one state to another, and that was a fillip. Operators have been very aggressive and that’s driven a lot of growth in the past 12 months. But going forward will be about cost-efficient marketing and brand building, as opposed to mass advertising. We will be able to help those guys, as we’ve done a bit of it ourselves.
EGR: Will you be involved in lobbying and further regulation of the industry?
BC: We’re supportive of regulation efforts and we think Australia is going to be an exciting jurisdiction over the next few years. In running on the internet will be allowed soon hopefully, it’s got to be one of the only places where you can do in running betting on the phones but not on the internet!
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