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Mark Balestra

iTV Betting Could Be Huge Down Under, But. . .

16 March 2004

Is Australia ready for iTV gambling? The consumers, perhaps. The government, absolutely not.

British gambling groups have proven in the last 12 months that betting and interactive television can be a winning combination, but the growth of iTV gambling beyond England and Ireland has been limited.

A handful of countries, including France, Norway and New Zealand, seem to be embracing the concept, but nowhere has it taken off like it has in the Sky Digital markets.

It's perhaps just a matter of time before iTV betting reaches mainstream success elsewhere, and if any market is ready to take the torch from here, it's Australia--a county that loves to gamble and readily embraces new technology. Combine that with FOXTEL's mission to bring the country into the digital television age, and Australia looks like a hot bed.

But, when you toss Australia's ongoing battle with problem gambling (and consequent resistance of expanding gambling opportunities) into the mix, it's fairly clear that Aussies probably won't be clicking through digital TV betting services anytime soon.

Sean Monaghan, an analyst with ABN AMRO's Sydney branch, said the social climate for iTV gambling in Australia is not a good one.

"If you bring gambling to TV now, the backlash would be loud," Monahan told delegates at the Pacific Congress on I-Gaming held in Sydney March 1-3. Doing so in the near future, he added, "could result in Productivity Commission II."

Australia has reacted to its problem gambling epidemic aggressively. Along with attempts to cut back on the number of poker machines in the country, the federal government passed the 2001 Interactive Gambling Act, which prohibits most forms of interactive gambling and places limitation on those forms that are legal. With a clear trend in place, the consensus is that now is not the time for new electronic gambling services.

Nevertheless, Australia is a prime market for iTV gambling should conditions change.

Max Francis, presales manager for NDS Ltd.'s Orbis Technology group, agreed that the time might not be right, but he also said the potential can't be ignored.

The upside for existing operators could be tremendous--especially, Francis said, because iTV gambling would bring in a new breed of bettor: the in-game impulse punter.

"We're talking about a new group of people who probably otherwise wouldn't have placed a bet," he said.

iTV gambling has already established some roots in Australasia, with Sky New Zealand turning over $400,000 per month in sports/race betting.

European countries are a few years ahead in the game. According to Forrester Research, iTV revenue in Europe grew from £1.1 billion in 2002 to £2.4 billion last year and is projected to reach £4.6 billion this year. The biggest chunk (nearly half) of that money is coming from betting. Outside England and Ireland, France is leading the way, turning over $142 million annually in race betting. Denmark, Italy and Spain, meanwhile, could be hosting iTV gambling services in the near future.

FOXTEL, the Murdoch Empire's Australian subscription television arm, is laying the groundwork in Australia. The group offers more than 130 digital channels, including seven sports channels and interactive sports services. FOXTEL is connected to more than 1 million Australian homes and is available to more than 70 percent of Australian homes.

So, what's the outlook for Australia?

U.K.-based BSkyB draws two-thirds of its £50 million in iTV revenue from gambling services. Considering FOXTEL's expanding reach in Australia and that Australians love to bet as much (if not more) than Brits, the potential for an iTV betting boom Down Under is obviously there.

But it all comes down to the government's acceptance of a new distribution channel for gambling. The pending review of the Interactive Gambling Act will not include recommendations for regulating iTV betting services, and the attitude toward the expansion of gambling in Australia won't change in the near future.

But if and when it happens, look out.

iTV Betting Could Be Huge Down Under, But. . . is republished from
Mark Balestra
Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.
Mark Balestra
Mark Balestra is the Managing Director at BolaVerde Media Group. He previously worked at Clarion Gaming and the River City Group where he was the publisher of iGamingNews. He lives in St. Louis, Missouri.