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Published 14 September 2012 12:05, Updated 17 September 2012 06:03
Tom Waterhouse has grand ambitions, on show thorough his slickly produced TV advertisements during the London Olympics and last year’s Rugby World Cup. Photo: Rob Homer
Smart entrepreneurs are cashing in on Australians’ love of gambling, according to research for BRW’s Young Rich this year.
IBISWorld figures suggest that $22.5 billion was spent on betting in the year to June 30, 2012, up 3.3 per cent.
The fastest growing sector is sports betting. It remains a relatively small segment of the overall market ($360.5 million annually) but has a compound annual growth rate of 14.7 per cent over the past five years, according to IBISWorld.
Matthew Tripp ($99 million net wealth in Young Rich 2011) understands how lucrative this fast-growing segment can be. He is the son of a bookmaker who bought ailing Darwin-based internet betting service Sportsbet for $250,000 in 2005.
By improving the site’s technology and customer service, Tripp significantly boosted its profitability before selling half of it to large Irish company Paddy Power for $49 million. (Another 40 per cent was sold last year for $132 million.)
Another bookmaker’s son, Tom Waterhouse, has his own fast-growing sports betting website, tomwaterhouse.com. Waterhouse has grand ambitions, on show thorough his slickly produced TV advertisements during the London Olympics and last year’s Rugby World Cup.
Reports suggest that he is spending about $20 million a year on marketing. He wants to build his business into a genuine competitor to global rivals.
But sports betting is a low-margin business and large amounts of marketing and turnover don’t guarantee big business valuations.
Read the BRW Young Rich 2012, out September 27, to find out if Tom Waterhouse’s numbers come up.