Prominent investment firm Blackstone has expressed its concern about a widening credit crunch in the U.S. that could adversely affect the global economy.
Nonetheless, this would not hinder Blackstone from investing substantially in its recent acquisition of an Australian casino operator Crown Resorts.
This move also came amid the strengthening scrutiny of the Australian gambling scene. In November 2022, Premier Dominic Perrottet announced the introduction of cashless debit cards in New South Wales as a measure to address money laundering and limit excessive gambling spending.
The move coincides with the replacement of the “gamble responsibly” tagline. A new regulation replaced such a tagline with seven new government-approved slogans for betting companies, effective starting March 2023 onwards.
The Australian government also announced plans to ban the use of credit cards for online betting in April. Due to these regulations, there will likely be more Australian online casinos accepting debit cards. The ban will align online gambling with land-based gambling practices and will be implemented through amendments to the Interactive Gambling Act 2001.
The government plans to use Bank Identification Numbers (BINs) to block credit card payments. The Australian Communications and Media Authority will have enhanced enforcement powers.
Growth potential
Blackstone acquired Crown Resorts in 2021 after founder James Packer agreed to sell the company. This decision came in response to an official investigation that revealed violations of anti-terrorist financing and anti-money laundering (AML) laws.
Due to ongoing legal challenges, Blackstone initially avoided significant investments in Crown. However, the situation has now changed, and Blackstone plans to improve Crown Melbourne, thereby reversing the circumstances significantly.
While visiting the region for the first time since acquiring Crown, Blackstone president Jon Gray commended Crown Melbourne, adding that the Crown could become a prominent player in Australia’s thriving tourism industry.
While he refrained from elaborating on the specific changes that lie ahead, he underscored that it represents a new beginning for the company.
Casino industry in Australia
German online platform specialized in data gathering Statista claims Australia presents an attractive market for investment in the gambling industry, with continuous growth, particularly in the online gaming sector.
The most recent data released by the Queensland Treasury in the 37th edition of Australian Gambling Statistics revealed that Australians collectively wagered over $174 billion in 2019-2020. This figure indicates a decrease of 25.2 percent compared to the previous year, which recorded approximately $225 billion in bets.
In a year, Australians collectively spent a staggering $225 billion on gambling, nearly three times the total government spending in 2019. This amount also surpasses the GDP of Morocco. When divided among the 19.75 million Australians aged over 18, this translates to an average of $11,525 per person, based on data from the Australian Bureau of Statistics.
Analyzing the various forms of gambling in the 2018-2019 period, it was found that $26.9 billion was dedicated to racing, amounting to $1,377 per capita. Gaming activities such as casinos and pokies also accounted for $187.6 billion, averaging $9,581 per capita. Sports betting accounted for $11.1 billion, equating to approximately $567 per capita.
Not all money spent on gambling is considered a loss, as there are instances of winnings. This fact is one of the reasons why people engage in gambling activities.
According to the same report, the overall national gambling expenditure, which accounts for total gambling winnings deducted from total turnover, was slightly over $25 billion, specifically $25.09 billion. On an individual basis, this translates to approximately $1,277 lost to gambling per person each year.
NWR Markwide Research said the Australian market for online gambling is projected to exhibit a compound annual growth rate (CAGR) of 9.24 percent between 2020 and 2025.
This growth is primarily driven by factors such as the expanding user base of smartphones, increasing disposable incomes, and the growing popularity of online gambling among the younger generation.
Stringent government regulations and a high taxation rate hinder the growth of the Australian online gambling market. The market is categorized based on type, product and distribution channel, with sports betting, casino and lottery being the primary segments. Among these segments, the casino category is expected to experience the highest CAGR during the forecast period.