Sportsbet helps boost Paddy Power results

Paddy Power posted a 13 percent gain in 2017 revenue, helped by a strong performance from its Australian online betting brand Sportsbet.

The U.K.-listed company posted overall revenue of GBP1.74 billion ($2.4 billion) for last year, generating EBITDA of GBP473 million, a gain of 18 percent.

In Australia, Sportsbet’s revenue jumped 21 percent to GBP404 million. The growth came despite Australia’s ban on in-play betting, which represented 3 percent of revenue last year, compared with 6 percent the year earlier.

“Growth was driven by continued investment in promotions, product and marketing to maintain Sportsbet’s market leading customer proposition,” the company said in a release to the London Stock Exchange.

Underlying EBITDA increased by 42 percent to GBP139 million. However, the cost of sales jumped by 30 percent thanks to the introduction from July 1 last year of a point of consumption tax in South Australia, which accounts for about 7 percent of Sportsbet’s revenue.

The PoC tax is expected to be rolled out in more Australian states this year. Western Australia, which accounts for 11 percent of revenue has announced a tax and Paddy Power said it expects remaining states to announce their intentions in coming months.

“Sportsbet is in a good position to withstand increased taxes and benefit from any market consolidation,” it said.