Soccer betting explodes; Phumelela profits 17% higher: Rian du Plessis – CEO …

Betting on soccer and other sports could soon match that on horseracing.


HILTON TARRANT: Horseracing and betting group Phumelela came out with results for the six months to January 31 today. Revenue is up 9% in the six months, headline earnings per share up 17%. Rian du Plessis is chief executive of Phumelela.
   Rian, the real feature of these numbers is not necessarily your horseracing and your horse-betting, but soccer-betting, which is just exploding.

RIAN DU PLESSIS: Yes, Hilton. Soccer-betting is up year on year 77%. Also, you need to know that our fixed-odds betting, which is through Betting World, was up 24%, international was up 18% and then Tote betting on horseracing was down 5%, unfortunately. But that was on the back of 10 lost race meetings – due to inclement weather – which represents 5% of the fixtures that we would have staged during the six-month period. That, together with the loss of the JB Met in this six-month period shows the Tote betting on horseracing as negative. When I say the JB Met was lost, it wasn’t lost, it was just moved from the last week in January to the first week in February, so it now doesn’t fall into our first six months. If you take both those factors into account, we actually had a very satisfactory performance on our Tote betting on horseracing as well.

HILTON TARRANT: Rian, let’s dig into that sports-betting. You do offer bets on soccer as well as rugby. Rugby is still tiny and, given some of the growth in soccer, unlikely to grow much from its base, I guess. Take us through the dynamics in the soccer-betting market, this market that as you say is up 77% year on year.

RIAN DU PLESSIS: Yes, the major growth that we achieved is really twofold. We’ve staged more betting opportunities. So we are offering more soccer Tote bets more regularly, No 1. But the vast majority of the growth came from Soccer 10 and Soccer 13. These two bets are different from Soccer 4 and 6 – that is a R6 minimum bet. Soccer 13 is a R1.40 minimum bet, and Soccer 10 is a R2 minimum bet. These lower-denomination bets have found huge favour with customers, and it’s the aspiration of wagering the change that you have left after you’ve bought your loaf of bread into a large pool that has a payout of a possible million or more. I think Soccer 13 had regular R2m payouts during the six months under review.

HILTON TARRANT: As far as soccer- and sports-betting is concerned, it is a part of your life – 20% of your Tote revenue’s soccer-betting. Are we likely to see that grow even further?

RIAN DU PLESSIS: Ja. We definitely believe that our sports-betting will outgrow and outpace our horseracing, and I’d be most surprised if in five years’ time our Tote betting on other sports is not more or at least equal to our betting on horseracing. We will still grow and we are putting in a strong effort to grow our horseracing, but the popularity of the other sports is just such that we believe that it will equal or be greater than the betting on horseracing in five years’ time.

HILTON TARRANT: Might we see other sports added to the mix?

RIAN DU PLESSIS: Yes, most definitely. We are looking at introducing a quartet on sports such as Formula One and other motor and motorcycle sports, and we are looking at other bets as well. We are going to try a combination of a soccer bet, one leg being a horse race on the day, because we would like to cross-pollinate between our customers and perhaps attract some of the people who follow soccer to become followers of horseracing as well.

HILTON TARRANT: Just looking at the local Tote betting landscape, three-quarters of that betting is happening at brick-and-mortar stores, so your actual local bookmaker. In terms of growing out that retail footprint even further, is that top of the agenda?

RIAN DU PLESSIS: Tote betting – yes, we are still growing our retail outlets. In the six months under review we grew by five outlets from 142 to 147. But the real growth in our retail footprint will be Betting World. Betting World started the year with 48 retail outlets, and finished the half-year with 52. They have applications in for a further 28 so as to take them up to 80, and I’m pleased to say to you that as late as last week we received approval for 16 of the 28, which we will seek to deploy in the next six months.

HILTON TARRANT: Betting World is the fixed-odds operation. In terms of the dynamics in that market, a lot of that betting is happening online, on sports-betting sites, on fixed-odds betting sites. It’s happening in the mobile space. Any plans there in extending that Betting World platform further?

RIAN DU PLESSIS: Yes, absolutely. We are focusing very hard on the cheapest form of taking the bet, which is online, and our new software is now in the final stage of its parallel run and will probably go live and stand alone with effect from May 1. So we are very excited about that because the website will then be able to offer you the full spectrum of fixed odds, together with Tote bets, which we haven’t been able to offer, and which is niggly for customers because they have to have a Betting World account and Tab account to be able to place the two online. And now they can use one account to place both bets. So from a convenience point of view we are excited about that. We see a lot of the growth in Betting World coming from the retail side as well, growing the retail footprint.

HILTON TARRANT: Rian, as you said, your numbers were impacted by the JB Met slipping into the second half, and we will see the impact of that move in the numbers for the current six months. As far as your overall horseracing operation goes, are you still attracting the crowds and the punters?

RIAN DU PLESSIS: Ja, we actually had more people at the JB Met this year than last year, so we are having encouraging trends in our on-course attendance, and our on-course betting turnover is also up nicely. But it’s a costly exercise, and we are simply pushing ahead as best we can.

HILTON TARRANT: Thanks to Rian du Plessis. David, he tells me interestingly that they are working very hard on getting the number of horses per race through the optimum number – 12 to 14 runners in a race means betting volumes go up, means the punters are happy. They had a problem down in the Western Cape where they only had about seven or eight runners a race on average. Betting revenues down, trainers unhappy. The science of horseracing.

DAVID SHAPIRO: You are talking to me! I just say the JSE is enough of a horserace for me, enough adrenalin for me to worry about betting on soccer games or horse races. Try volatility on the JSE on a day-to-day basis.

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