Australian upstart Betr has attracted attention from several established bookies due to controversial promotions offered following its launch in October 2022.
Betr (not to be confused with the Joey Levy and Jake Paul-backed microbetting operation in the US) is backed by a consortium including Rupert Murdoch’s News Corp, Las Vegas-based investment fund Tekkorp Capital, and Australian technology supplier BetMakers.
The brand offers both sports betting and horse racing, but appears to be more focused on the latter, for the time being at least.
Upon launch, the operator offered a promotion to new customers on the Melbourne Cup, with 100/1 odds offered on any horse to win under a maximum bet of A$10.
What rivals are saying
Such promotions are likely to have a significant impact on the operator’s bottom line and Australia’s market share make-up for the period. The aggressive nature of some offers set tongues wagging during the Q4 2022 earnings calls of its Australian rivals.
Tabcorp CEO Adam Rytenskild commented last week: “I think what Betr showed, and [founder] Matt Tripp knows, is that as the market’s changing, scale is important.
“And the lever [Betr] used to try and get scale quickly was to throw some pretty substantial offerings out there that were deliberately loss leading, and it’s difficult to create stickiness on that.”
Meanwhile, PointsBet CEO Sam Swannell made further comments today (28 February) during the firm’s H1 FY23 earnings call.
PointsBet CEO Sam Swannell: “I think it’s not sustainable for some of the smaller operators to be as aggressive as they are from a promotions perspective.”
While he did not mention Betr by name, he said: “Online racing turnover continues to be under pressure. And the promotional intensity, predominantly in the VIP segment, continues to be pretty strong. We’re flagging those two areas as probably being challenges for the sector.
“Having said that, as it relates to the latter, I think it’s not sustainable for some of the smaller operators to be as aggressive as they are from a promotions perspective.
“As those things normalise, we expect players to congregate back to the best products and the best services, of which we are one.”
As well as attracting criticism from its competitors in the market, Betr has already fallen foul of Australian regulations on gambling advertising.
Last week, the brand was fined A$75,000 by the NRTC for breaches related to direct marketing after self-excluded customers were contacted directly by affiliates of Betr in order to try and sign them up with the operator.
Customer reaction
While positive reviews for Betr on Australian affiliate sites are not hard to come by, users on productreview.com.au tell a different story. The brand only has nine live reviews on the website at the time of writing, but all of them offer a one-star rating.
“I joined for the clown 100-1 promos but don’t bet with them for anything else. Non-existent ‘customer service’ is just the beginning,” wrote one user.“They are going to go down in a big heap of flames because quite simply, they don’t give two ships and aren’t even hiding the fact,” he concluded.
Other customers have written reviews alleging bets have been rejected and that advertised promotions were not available.
Market impact
ASX-listed BetMakers, which provides the technology on which Betr is built, is set to receive 25% of the brand’s net gaming revenue under a rev share-style supplier agreement.
The business is guiding to A$300m in revenue over the 10-year duration of the deal. That figure suggests BetMaker expects Betr to generate in excess of A$1.2bn in NGR over the period, equating to an average of around A$120m per year, or A$30m per quarter.
In Q4 2022, however, BetMakers booked just A$1.88m of revenue from the partnership due to Betr’s high levels of promotional spend.
That suggests that Betr generated NGR of just A$7.5m during the quarter.
News Corp CFO Susan Panuccio: “We’ve actually got a small investment in a wagering platform down in Australia, it’s a sub $50m investment, and the quarter reflects some start-up losses in relation to that venture.”
Meanwhile, in News Corp’s Q2 FY23 earnings call, CFO Susan Panuccio responded to a question regarding $29m in equity losses listed in the firm’s financial results.
“So the first question in relation to the equity losses, we’ve actually got a small investment in a wagering platform down in Australia, it’s a sub $50m investment, and the quarter reflects some start-up losses in relation to that venture,” Panuccio said.
“I think importantly, we don’t expect that equity loss reflected in Q2 to be the run rate going forward.”
Those were the only comments that made reference to Betr across both News Corp’s financial report and earnings call.
However, the Australian Financial Review has suggested News Corp could pull back its investment in Betr as it looks to tie up a deal for PointsBet’s Australian wagering division.
The share prices of PointsBet, Tabcorp and BetMakers have experienced significant change in the last five days, with PointsBet shares falling some 14% and BetMakers up some 19% at the time of writing.
Tabcorp shares slipped around 2% over the same period.
While Betr’s long-term impact on the Australian market remains uncertain, the brand definitely cannot be ignored, as PointsBet and Tabcorp’s recent comments demonstrate.
