UBet finally makes Tatts modern: How will punters and bookmakers fare?

UBet launched last night at a Sydney gala, with the brand officially going live on Thursday morning across the nation. What will UBet mean for the world of sports betting and racing, and what about punters?

UBet’s chief operating officer Barrie Fletton noted that the wagering industry had long regarded Tatts as a ‘sleeping giant’, which he was pleased to announce had “finally woken up”.

It took long enough.

Tatts had offered a confusing mix of semi-competitive brands for too long, following acquisitions that were left to continue in their own right. This included TattsBet, Tatts.com, TAB QLD, TAB SA, and Tote Tasmania.

Tatts’ thinking in holding on to those brands made sense in a previous era. The battle for punter dollars was on a state-by-state basis, given a green light through licences and exclusive retail operations.

That was, until corporate bookmakers operating out of the tax-friendly Northern Territory waded in, offering any punter in any state a way to bet that didn’t require making a phone call or heading down to a retail shop or pub.

And while Tatts recognised the problems, they didn’t rush in to the rebrand. The process to get to the launch of UBet took some 18 months, delayed along the way multiple times, with what was coming ending up an open-secret.

UBet will become the Tatts wagering brand across online and retail operations. The branding is already online, with retail branding across stores making the shift from existing brands to UBet over a period of three to five years.

The brand has launched a marketing surge, pushing millions into sponsorships, marketing and ambassadors, with Jonathan Brown, Nathan Sharpe, Anthony Minichiello, Greg Murphy and US Sports expert Jason Bennett all on board. Tatts figures show bets placed online make up 25 per cent of Tatts’ wagering revenue, and the group said that a new deal struck with Racing Queensland to reduce fees had freed up a marketing war chest of $15 million it could spend.

A further sign of the gloves coming off was the launch taking place in Sydney, the land of Tabcorp until at least 2033. Tatts might have been expected to make the announcement in Brisbane or Adelaide.

Key sponsorships include becoming the first official betting partner of V8 Supercars, corporate sponsorship of AFL club Port Adelaide Power, and A-League club Melbourne City FC.

UBet will be attempting to make sure their logo pops up somewhere in your periphery over the coming weeks as it seeks to gain traction.

UBet emerges as a single-entity, but even with that consolidation it’s most likely ranked fourth behind Tabcorp (the NSW and Victorian TAB owners, as well as the owner of Luxbet), the British-backed operations of William Hill and Sportsbet.

William Hill, of course, recently merged its acquisitions of Australian brands Sportingbet (which owned Centrebet) and TomWaterhouse.com, into the single brand.

Other competitors include CrownBet, itself a rebrand organisation of what was BetEasy (which itself took a stake in Betfair via a joint-venture). International bookmakers Bet365 and Ladbrokes are firmly entrenched on the scene, as well as Unibet. (Full disclosure, Bet365 and Unibet are current advertisers on The Roar.)

The stakes are high, with the online wagering market valued in Australia at $13 billion annually.

Where does the money flow?

The riches that arise from punters flow back through taxes, shareholders, sponsorships, and to a far lesser extent, rewards for punters.

Sponsorships are the golden goose for sporting bodies and clubs, as well as media companies.

As mentioned, UBet has freshly sponsored a major sporting competition and two clubs to go with existing deals with the Gold Coast Suns and some racing carnivals.

The reality is UBet came to the party late and did what it could. V8s represents a new opportunity not previously capitalised on by other bookmakers, possibly due to the fact that motor racing hasn’t traditionally held a close relationship to sports betting.

The AFL announced a major deal with CrownBet (nee BetEasy). Cricket Australia’s partner is Bet365. The A-League’s partner is the TAB. It’s expected that these agreements are worth millions to each code.

The NRL has been the only code to resist a preferred betting partnership deal, though that situation unfolded more from the backlash that was the ubiquity of Tom Waterhouse on screens, including during games broadcast by the Nine Network, than through any real moral standpoint.

The tale of sports betting is perhaps told by comparing the two leading code’s leading teams.

Reigning NRL grand final winners South Sydney Rabbitohs are emblazoned with a Crown Resorts logo on the front of their shirt.

Reigning AFL grand final winners Hawthorn are foundation partners of the Victorian Government’s Responsible Gambling initiative.

There is no implication here that one club is morally above the other. Each took the best possible sponsorship opportunity available at the time.

Horse racing hasn’t missed out either. Race sponsorships are often bookmaker brands, mostly in metro meetings. Traditional names for races often fall by the wayside – such as is the case with the Robert Sangster Stakes at Morphettville this weekend becoming the William Hill Classic, just to single out one change.

(The narrative here goes further – Robert Sangster was a famous British breeding magnate who at one time focused his breeding operations in Australia. Sangster was the son of Vernon Sangster, who founded the Vernons Pools wagering business in 1926, which Robert Sangster sold to Ladbrokes for £90 million in 1989. Robert’s son Adam Sangster runs Swettenham Stud)

Every logo appearance, naming change, or betting partner deal is worth a dollar to a club or a body. And this money comes from punters.

What do punters get from UBet?
Certainly, Tatts punters will appreciate UBet’s offering, a far more slick and polished presence online and on mobile, via apps. Live video of Queensland races is available via the UBet app, in a first.

UBet has announced a number of new promotions and initiatives designed to get new punters on board, with a 30-day winner-a-day promotion and money-back offers on key games and matches.

UBet has also commenced a rewards offer, similar to Tabcorp’s TAB Rewards programme, which is itself based on the airlines frequent flyer model. A dollar spent on a bet will earn a reward point. Other specific promotions or bet types may offer bonus points at times, and the rate skews depending on your status.

UBet’s basic terms indicate reward points convert to betting dollars at a rate of $5 betting dollars for every 2,000 reward points earned. If you’re a more frequent punter, presumably at large, your rate of return on points can be as high as two points for dollars.

At the base rate, assuming a $2000 spend is required to receive a $5 free bet, this equates to a return of a quarter of one per cent – 0.25% back in hand.

The TAB Rewards model is the same, with cashback coming at $5 per 2500 points, $10 per 4000 points, $20 for 8000 points or $50 for 20,000 points. The base return is 0.2 per cent, scaling up to 0.3125 per cent at best.

UBet offer slightly better rewards up front, but neither come to close to the Hong Kong racing model which offers a full ten per cent rebate, which is often noted in racing circles.

That ten per cent isn’t exactly in reach of the average punter though. The Hong Kong Jockey Club offers the 10 per cent rebate for a range of losing bets (eg win bets, quinellas, trifectas) that amount to HK$10,000 or more. That’s a bet amount of around AUD$1613 at current exchange rates – out of the range of most casual punters – but it’s hugely significant for bigger punters.

Overall, a strong brand that can barely be missed, familiar friendly faces, with a quality multi-platform offering are keys to success. But UBet is simply playing catch-up here. They have a slightly better yet still skinny rebate. They’re offering some cashbacks and different promotions. There’s fanfare around the launch.

But there is a fundamental lack of real innovation for punters. Do Tatts need it to become a market leader?

Tatts won’t report the success of UBet to shareholders until the annual results in August, and the new entity will only have been live for two full months in the 2014-15 financial year, scarcely enough time to offer guidance as to success.

We may need to wait until February 2016 for the full-year 2015 results to understand the success of the company.