Maximizing the potential of bigger games

The National Rugby League (NRL) in Australia is planning to levy a premium tax on sportsbooks for the Grand Final and State of Origin games. This could see the rugby league organization make an additional AU$1m (US$687,815) each season.

the league intends to maximize on the games with the highest viewership numbers and the most money wagered

Sports betting operators have a few weeks to sign these fresh agreements from the NRL. With this arrangement, the league intends to maximize on the games with the highest viewership numbers and the most money wagered during the course of the season.?

The levies on these leading games will be separate from the charges that sportsbook operators pay the NRL for regular games. 

The State of Origin series sees a best-of-three set of matches take place between two state representative teams in the country. The Grand Final, which crowns the champion of the NRL for the given season, is one of the biggest sporting events in the Australian calendar. 

A repeat of past debates

Last year, the NRL was also at loggerheads with the sports betting industry in Australia. The main issue was the level of fees the league would charge operators. Disputes persisted for nearly the first four months of the 2019 season.

Now, the league is once again pushing for a different system whereby sportsbooks pay taxes based on the higher of a turnover fee per round of games or a revenue-based approach. The usual system has been for the NRL to determine the fees on a month-to-month basis. If the profits in a given week are more than a certain percentage of total turnover, it will also take a cut. 

An overall struggling betting market

The betting sector in Australia has been struggling overall lately. Online sportsbook operators in particular have been hit hard by a new point of consumption tax. 

Bettors may end up bearing the brunt of these increases, with odds being slashed

According to the Sydney Morning Herald, these new potential changes will see at least a 20% addition to the fees that the operators have to pay the NRL. If this happens, then offering betting markets for these events will be close to unsustainable. Bettors may end up bearing the brunt of these increases, with odds being slashed. 

Betting operators say the product fees for NRL betting are higher than for any other sport in Australia. One sportsbook executive, who spoke anonymously to local media about the issue, said the popularity of the NRL market lies below that of the AFL, basketball, soccer, and tennis.

They added: “It’s hard enough to get punters to bet on rugby league over faster-growing domestic and international sports and this model would speed up the market share losses the NRL is already experiencing.”