Multiple Australian Wagering Brands? Insights from the Australian wagering landscape.
Over the past couple of years, we have seen an increase in wagering service providers (WSPs) operating or intending to operate multiple brands under a single wagering licence. This is particularly the case in the Northern Territory.
Author: Bree Ryan, Senior Associate
Operating multiple brands can present several benefits for a WSP but it can also provide some challenges. This article outlines the key considerations when operating multiple wagering brands in the Australian market.
In some jurisdictions, including the Northern Territory and New South Wales, WSPs are able to operate multiple brands under a single wagering licence. WSPs are potentially leveraging the increasing availability of off-the-shelf technology providers, as well as the rapid technology developments, enabling speed to market and innovative bespoke customer offers for those who have capability to develop in-house software.
Why are we seeing an increase in multiple wagering brands?
Wagering turnover has declined since the highs of the Covid lockdowns. The downturn in economic activity is often mentioned by industry stakeholders as being the main contributor to this.
Despite the current headwinds in the industry, we continue to see new entrants coming in. In addition to new licensees, we are seeing WSPs launch additional brands. It is possible that the recent increase in third-party technology platforms that can provide a complete operational service to licensees with low barriers to entry, has encouraged this growth. These technology services enable WSPs to more easily replicate their business operations across additional brands.
The model that operators are using would likely allow for sharing of resources across multiple service areas including customer service, financial accounting, trading and others.
Key considerations for licensees
For those considering operating multiple brands, there are a number of considerations to take into account and these are changing as regulators consider how best to operate and develop additional experience with this approach. Each element should be carefully assessed to ensure that the WSP is aware of and is mitigating the risks of operating multiple brands (particularly from an RG perspective).
Licensing obligations and requirements
As highlighted above, some jurisdictions allow WSPs to operate multiple brands under a single licence, while others currently require a separate licence application. Where multiple brands are permitted, WSPs will have to obtain approval to operate additional brands - this is usually based in the approval of the new technology system (as is the case in NT).
WSPs should consider their licence conditions carefully, as the same level of compliance is required across each brand. WSPs could potentially face additional risks if there is a breach identified, as it may present across multiple brands. This could have a major impact on the potential penalty imposed by a regulator.
Broad grouping provisions
WSPs need to consider the impact of any provisions in relevant legislation which may join separate brands (whether under a single licence or separate licences) as a ‘group’ for financial purposes.
This includes, for example, the point of consumption tax (POCT) scheme in Victoria where WSPs are required to pay POCT based on the location of their customer at the time of placing the wager. POCT is calculated based on the net wagering revenue from customers from the relevant state or territory. WSPs become liable to pay POCT when the net wagering revenue is in excess of the relevant tax-free threshold for the financial year.[1] If hitting the POCT threshold, WSPs are required to register to pay POCT, lodge a monthly return and remit the POCT payment to the relevant revenue office.
WSPs offering wagers to customers based in Victoria (regardless of where the WSP is licensed) need to be aware of the grouping provisions which could mean the WSP is considered part of a large group of WSPs, resulting in the obligation to pay POCT being impacted. The Gambling Taxation Act 2023 (Vic) introduced the calculation and payment of POCT as a group for WSPs that have a defined connection between them. If a WSP is considered a member of a group, that WSPs’ net wagering revenue is calculated as part of that group rather than individually. This is the same for the tax-free threshold. For further details, we recommend you read Navigating Point of Consumption Tax (POCT) Grouping Provisions: What Wagering Service Providers need to know.
To date, there are no similar provisions in other Australian jurisdictions in relation to the payment of POCT, however, we acknowledge that Hospitality and Racing NSW in releasing its Regulatory Priorities, July to December 2024 has foreshadowed that online wagering and POCT is on the list of priorities. Included in this is Liquor and Gaming NSW (L&GNSW) proposing to undertake detailed proactive revenue audits of WSPs relating to their POCT compliance. L&GNSW also intend to work with federal, state and territory colleagues to implement further reforms to the online wagering regulatory framework, which may include a POCT review.
Another example of grouping that WSPs operating multiple brands should be aware of is under the Racing NSW thoroughbred race field application for use process (Race Field Approval). In relation to the Race Field Approval, Racing NSW designates WSPs as related under certain circumstances. Any related WSP has access to a single exempt turnover threshold in relation to the payment of fees for the use of NSW race field information, which is based on net wagering turnover. The description of related is broad and captures “related bodies corporate” and entities that “control” others as defined within the Corporations Act 2001 (Cth) as well as WSPs who share a key employee, director or associate in addition to other matters.
Similarly, Racing Victoria’s most recent Thoroughbred Race Fields – Standard Conditions of Approval which took effect on 1 October 2024 (Vic Race Field Approval), includes reference to multiple brand permission which means “that the Approved WSP, under its Licence Conditions, is permitted to simultaneously operate more than one brand under a single wagering licence”. The Vic Race Field Approval allows WSPs operating multiple brands under a single licence to comply with minimum bet limits per customer rather than per brand (among other things). There is potential for other Race Field Approvals or sports integrity payments to consider a similar structure if the multiple-brand approach continues.
[1] In Victoria and New South Wales the threshold is $1,000,000, in the Australian Capital Territory, South Australia, Western Australia and Tasmania the threshold is $150,000 and in Queensland it is $300,000.Customer expectations
When considering multiple brands, WSPs will need to understand customer behaviour and expectations across a number of matters. We consider that in most instances customers would not realise that brands are operated by the same WSP. It may also be that the brands may attract different demographics, so may not attract a common customer. However, how a customer’s personal information is handled by the brand should be carefully considered.
The privacy obligations of a WSP, whether or not captured under the Privacy Act 1988 (Cth), govern how personal information must be treated. The privacy policy will be essential in these circumstances to ensure that the customer is aware of who is collecting the information and how it may be used. WSPs may not have authority to share personal information between brands if they operate under separate licences, unless properly provided for in the privacy policy or policies or otherwise with customer consent.
Similarly, marketing consents will need to be considered by the WSP. As a result of the National Consumer Protection Framework, marketing consent from a customer of a WSP must be express consent. This could suggest that each brand operated by the WSP would need to seek specific consent from the customer to send direct marketing to them.
The Northern Territory Racing Commission (now the Northern Territory Racing and Wagering Commission) (NTRCW) confirmed in May 2024 through correspondence to Licensees that it is essential that those operating additional brands (under a single licence as is possible in the Northern Territory) share all responsible gambling information. The NTRWC emphasised that should any responsible gambling matters arise in the future, the NTRWC is likely to consider the activity by individual customers across one or more bands together so that the WSP is held responsible for the actions as a whole, rather than at a single brand. We anticipate that this would be similar in relation to any dispute raised by a customer that may impact more than one brand. This would require authorisation under the relevant privacy policy to ensure that it was possible.
Operational considerations
There are a number of operational matters which need to be taken into account when operating multiple brands. While there may be some synergies between operators potentially from a trading, financial and even customer service perspective, WSPs need to consider the relevant jurisdictional limitations.
For example, key employee licensing arrangements- can these employees operate across multiple brands in the nature proposed, do they need separate licences or is the licence attached to the WSP? How does the staff training need to be adjusted to allow for multiple brands, particularly from a responsible gambling and marketing perspective to ensure legislative compliance?
Similarly, affiliate approval and register maintenance - is approval required for the WSP or each brand? Again, this may depend on the licensed jurisdiction.
As highlighted above, self-exclusion is another key consideration. The NTRWC has made it clear that responsible gambling information should be carried across all brands, but what does this mean in relation to self-exclusion? For example, if a customer takes a short 3-day break from one brand, does that need to be imposed on the other brand that the customer may have been intending on using during that break? Clearly, state and territory-based permanent exclusions measures would need to apply across the brands, as would the implementation of the National Self Exclusion Register, BetStop.
What next in relation to multiple brands?
We expect future regulator engagement concerning multiple brands setting minimum bet limits, potentially merging limits across brands, combining thresholds for the calculation of race fields and sports integrity fees (like what is already happening with NSW thoroughbreds), and requiring deposit limits or other responsible gambling tools to be applied across brands.
The matters highlighted above directly impacting the operation of multiple brands will continue to be a focus for regulators as they become more prevalent.
If you have any questions or would like to discuss the topics covered in this article, please contact the Senet team.
