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<body lang=EN-AU link=blue vlink=purple>

<div class=Section1>

<p class=selectionshareable>Quote: "<span style='font-size:16.0pt;
color:#333333'> Industry modelling has suggested that the corporate bookmakers
would have to <span style='background:yellow;mso-highlight:yellow'>raise their
prices</span> by up to 25 per cent to recoup the cost of a point of consumption
tax".<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>What a
quaint way of putting it!<o:p></o:p></span></p>

<p class=MsoNormal>LBL<o:p></o:p></p>

<p class=MsoNormal><o:p> </o:p></p>

<p class=MsoNormal><o:p> </o:p></p>

<p class=MsoNormal style='line-height:13.5pt'><b><span style='font-size:9.0pt;
font-family:"Arial","sans-serif";color:#277F9C;text-transform:uppercase'><a
href="http://www.theaustralian.com.au/business"><span style='color:#277F9C;
text-decoration:none'>BUSINESS</span></a><o:p></o:p></span></b></p>

<h1 style='margin:0cm;margin-bottom:.0001pt' id=story-headline><span
style='color:#333333'>Proposed wagering taxes to hit bookies profit, says
Macquarie<o:p></o:p></span></h1>

<p class=MsoNormal align=center style='text-align:center'><span
style='font-size:16.0pt;color:#333333'>Sportsbet could emerge the only
profitable corporate bookmaker as state wagering taxes gain traction, says
Macquarie.<o:p></o:p></span></p>

<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:0cm;text-indent:-18.0pt;mso-list:l0 level1 lfo1'><![if !supportLists]><span
style='font-size:10.0pt;font-family:Symbol;color:#333333'><span
style='mso-list:Ignore'>·<span style='font:7.0pt "Times New Roman"'>        
</span></span></span><![endif]><span style='font-size:16.0pt;color:#333333'><a
href="http://www.theaustralian.com.au/author/Sarah-Jane+Tasker"><span
style='color:#333333;text-decoration:none'>Sarah-Jane Tasker</span></a><o:p></o:p></span></p>

<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:0cm;text-indent:-18.0pt;mso-list:l0 level1 lfo1'><![if !supportLists]><span
style='font-size:10.0pt;font-family:Symbol;color:#333333'><span
style='mso-list:Ignore'>·<span style='font:7.0pt "Times New Roman"'>        
</span></span></span><![endif]><span style='font-size:16.0pt;color:#333333'>The
Australian<o:p></o:p></span></p>

<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:0cm;text-indent:-18.0pt;mso-list:l0 level1 lfo1'><![if !supportLists]><span
style='font-size:10.0pt;font-family:Symbol;color:#333333'><span
style='mso-list:Ignore'>·<span style='font:7.0pt "Times New Roman"'>        
</span></span></span><![endif]><span style='font-size:16.0pt;color:#333333'>4:12PM
January 17, 2018<o:p></o:p></span></p>

<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto'><span
style='font-size:16.0pt;color:#333333'><img border=0 width=1 height=1
id="Picture_x0020_3" src="cid:image001.png@01D392AC.5C978360"
alt="https://i1.wp.com/pixel.tcog.cp1.news.com.au/track/component/author/67d225de82574ab1cbc41387ea367b18/?esi=true&t_product=the-australian&t_template=s3/austemp-article_common/vertical/author/widget&td_bio=false"></span><span
style='font-size:16.0pt;color:#333333'>Sportsbet could be the only corporate
bookmaker that remains profitable if a new wagering tax is rolled out across
Australia, according to investment bank Macquarie.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>The bank
has run the numbers on a 15 per cent Australia-wide point of consumption tax,
which showed that Sportsbet’s rivals CrownBet, William Hill and Ladbrokes
would all struggle to turn a profit if hit with a national tax.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>Macquarie
added in its client note that the bookmakers could mitigate the tax though by
lifting yields and cutting back on advertising and promotional activities.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>South
Australia introduced a point of consumption tax last July, prompting other
states to follow its lead, which could see the tax introduced across the
country.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>UK
wagering giant William Hill announced this week it was reviewing its Australian
operation — led by Tom Waterhouse — warning new taxes and
regulations would hit its profit.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>William
Hill previously warned that a national point of consumption tax would have a
significant impact on corporate bookmakers because such costs would be
difficult to recover in a tough market. It said the tax would force some
operators to review their operations in the Australian market.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>The
South Australian regime is a 15 per cent tax on the net wagering revenue of
betting companies earning more than $150,000 a year and offering services to
South Australians.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>Victoria
is set to introduce a similar tax in July and NSW, Queensland and Western
Australia also have plans for a new wagering tax.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>Industry
modelling has suggested that the corporate bookmakers would have to raise their
prices by up to 25 per cent to recoup the cost of a point of consumption tax.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>Macquarie
also highlighted in its note to clients that Australia’s wagering market
generated around $4 billion in revenue in 2017.<o:p></o:p></span></p>

<p class=selectionshareable><span style='font-size:16.0pt;color:#333333'>Tabcorp
(<a
href="https://markets.theaustralian.com.au/shares/TAH/tabcorp-holdings-limited"
target="_blank" title=markets.theaustralian.com.au>TAH</a>) accounts for 63 per
cent market share of the wagering market, with the corporate bookmakers sharing
the remaining 37 per cent and Sportsbet has the biggest slice of that share
with 15 per cent.<o:p></o:p></span></p>

<p class=MsoNormal><o:p> </o:p></p>

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