The Australian Football League (AFL) has long had strong links with the gambling industry and has benefited from substantial revenue thanks to partnerships and agreements with betting companies. The AFL has recently revisited these agreements and is now seeking to increase its share of gambling revenue. This has led to varied responses from gaming and betting companies.
As you read on, we’re going to be looking at just what the AFL is proposing and then considering how the gambling industry is looking to respond. We’ll also be highlighting the potential implications that could be faced by both the industry as a whole and individual consumers.
The Pursuit of Increased Gambling Revenue
For many years, the football league in Australia has earned money from the betting industry by charging product fees. These are charges that are levied on all bookmakers and are based on the turnover or profitability of bets that are placed on AFL matches.The arrangements as they stand right now have ensured that the league has benefited from a steady income stream, with reports suggesting that this is to the tune of $40 million a year. While this is already an impressive sum, the AFL is looking to bolster its finances and has now said that it wants to increase these fees. The initial draft proposal states that the product fee should be raised and that there should also be a $20,000 annual fee to be paid by all bookmakers that offer betting on AFL matches.
To many, there appears to be little to no justification for such a move, but the AFL states that the increases are a must. It believes that there are integrity concerns with the betting industry and that by boosting its fees it can be more involved and provide oversight and increased control.
Responses from Gaming and Betting Companies
Perhaps unsurprisingly, the AFL’s proposal has been far from welcomed. In fact, there are various quarters in the betting industry where there is strong resistance. This is especially the case with smaller bookmakers. Bodies have issued a statement where they brand the proposals as being “Unfair, disproportionate, and anti-competitive”. They feel that the only companies that stand to see any favourable results are large overseas ones while smaller local bookmakers will only experience harm. The reality they see is that this could make things unsustainable for smaller operators and may even drive them out of business completely.
One Victorian-based bookmaker has expressed his concerns about the increase in fees. He has stated that the only way to remain competitive is to push with aggressive promotional tactics so that bettors will choose his business rather than an overseas operator. His belief is that the only way he can offset additional costs is by introducing, and advertising an incentive program on the AFL product in an attempt to increase turnover by at least 20x. Other small bookmakers have voiced the same concerns and feel that without following a similar route they will simply become unattractive to customers who will simply jump ship.
It’s not just smaller bookmakers that have concerns, with large operators also voicing apprehension. While larger companies have benefited in recent times and seen revenues rise, the feeling is that the proposed increase in fees will simply wipe out any of the benefits that have been built. Companies have saved money by renewing Victorian betting licences, but these savings are set to be wiped out by what the AFL is proposing.
Potential Industry Implications
With the AFL pushing for a larger share of gambling revenue, there are likely to be a range of far-reaching consequences. These include:
1. Increased Promotional Activities
Bookmakers need to find a way to counterbalance the increased financial burden that will be faced. The way that they are likely to approach this is with an increased use in promotions. By using the likes of bonus bets and matched deposits, there’s more chance of attracting new users, as well as retaining existing ones.
2. Market Consolidation
There’s a real risk that smaller bookmakers will be left in a position where they just can’t absorb the increase in fees. The only potential outcomes here are that they go out of business or they are forced to merge with larger companies. This is a real negative for bettors as they will find that they have less choice when it comes to where to wager and it’s possible that there will be less favourable odds on offer due to the lack of competition.
3. Legal Challenges
It’s highly likely that bookmakers will mount legal challenges in an attempt to ward off the proposed increase to fees. There are already law firms stating that the fees are anti-competitive and they could even violate laws around trade practices.
4. Technology and Industry Adaptation
With financial pressures likely to mount, betting operators need to take advantage of advanced data analytics, AI-driven risk management, and innovative gaming platforms if they want to remain competitive. Companies are now investing in aggregated gaming solutions and API integrations so that they can enhance the overall betting experience. Casino games Aggregators, such as Hub88.io, are playing a major role here by offering solutions that are scalable.
The AFL’s Stubborn Response
Despite the concerns that have been raised by bookmakers, the AFL seems intent on pushing ahead with the change to fees. It believes that this is necessary in an attempt to safeguard the integrity of the sport. The league feels that there are growing risks and a lack of control over betting activities that are related to its matches and it wants to put this right.
Final Thoughts
The move taken by the AFL to increase its revenue share has certainly come under fire. The reactions from the betting companies highlight real concerns and it’s hard to believe that these can be completely dismissed. Right now, it’s a waiting game. The AFL needs to reconsider its approach and reflect on the long-term harm that could be caused. Whether it does this, or not, remains to be seen.
