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Source = http://www.brw.com.au/p/brw-lounge/well_tom_waterhouse_but_not_gai_WNgiq9bQaBb4I8mPqs8x8M
Why Tom Waterhouse is not as rich as you think - but Gai is doing well
Published 04 April 2013 12:15,
Updated 05 April 2013 07:55
Celebrity bookmaker Tom Waterhouse is either an inspirational entrepreneur or public enemy number one depending on who you choose to believe.
A willingness to spend up big on marketing has made 30-year-old Waterhouse and his sports bookmaking business tomwaterhouse.com all-pervading fixtures at some professional sporting events.
It hasn’t come cheap. Newspaper reports suggest Waterhouse spent $15 million to get a seat in Channel Nine’s commentary box during its rugby league coverage and BRW’s own investigations suggest that his business is spending north of $25 million a year building the ‘Tom Waterhouse’ brand.
While Waterhouse is almost certainly not as rich as many supporters and critics alike seem to think, the aggressive push has undeniably made him the face of sports betting in Australia.
It is an industry growing at enviable levels – about 15 per cent a year over the past five years according to IBISWorld.
To professional sporting associations and broadcasters, it offers a new source of revenue and a rare opportunity for growth.
But to anti-gambling advocates, sports betting bookmakers are getting rich off problem gamblers. They say sports betting is hurting public welfare and threatening the purity of sport.
Newspaper columnist Peter FitzSimons is the latest critic of Waterhouse and his preferred way of making money.
In his latest syndicated column for Fairfax Media, published on April 4, he says one of the biggest problems is that bookmakers have moved out of the shadows and into daily lives.
“[They are] surrounding us, infesting us, getting their clutches into people we know, elbowing us in the ribs trying to get us to cough up our own money, and inevitably making kids think that gambling on sport is simply what everyone does.
“And with the line now SO blurred between advertisers and the sports coverage itself that some kids even think the bookies are the stars…it really is time to act.”
Suggestions that Waterhouse has indeed become a star are supported by the lofty valuations being ascribed to his business.
On March 19, it was reported that British bookmaker Ladbrokes was interested in buying half of tomwaterhouse.com in a deal that valued the business at between $200 and $300 million.
This led to more media coverage for Waterhouse, who seemingly had claims to a spot on the BRW Rich 200 list.
At BRW, we are not convinced.
Waterhouse was closely considered for last year’s BRW Young Rich list but his net wealth failed to reach the $18 million cut-off.
Putting aside the ethics of what he does for a living, there are several reasons why BRW is not bullish on Waterhouse.
For one, he doesn’t appear to have ever fully owned the business.
The use of his name and likeness suggest tomwaterhouse.com is all his but documentation filed with the ASIC suggests that his stake is closer to 25 per cent.
The presence of other investors (family members or otherwise) seems to be supported by the big marketing budget; cash was being burnt on promotion well before large sums started flowing the other way.
The business is yet to turn a profit, which in most business valuations is all that really matters.
While the Waterhouse family has a long history in bookmaking, Tom’s business is only three years old. Building a $200 million company rarely, if ever, happens this quickly.
Sports betting is a low margin business that relies on high turnover. Despite his public profile, Waterhouse has less than 10 per cent of the local market.
His intimate association with the brand also makes it difficult for him to get away from it. Any buyer is likely to demand that he remains ‘hand-cuffed’ to tomwaterhouse.com for several years.
Other potential problems for Waterhouse include a seemingly high level of regulatory risk. Sports betting is nothing if not controversial. Governments will be forced to act if public disenchantment with bookmakers reaches a perceived threshold.
The barriers to entry for bookmakers are also not as high as in years past when success was dependant on standing in the right spot at big horse race meetings.
Sports betting has become possible by advancements in wireless technology and new operators with faster and better technology are a big risk for existing operators.
Aggregation opportunities are seemingly unfilled in what is still a new and evolving industry.
Ultimately, gamblers want the best odds and may turn to web-based aggregators (sites that provide clear information and access to all bookmakers) to get them.
Tom Waterhouse has built a big business but his critics may take comfort in the news that while he may have made the transition from bookmaker to media star, it may be some time yet before he goes from star to Rich-lister.
Why Tom Waterhouse is not as rich as you think - but Gai is doing well
Published 04 April 2013 12:15,
Updated 05 April 2013 07:55
Celebrity bookmaker Tom Waterhouse is either an inspirational entrepreneur or public enemy number one depending on who you choose to believe.
A willingness to spend up big on marketing has made 30-year-old Waterhouse and his sports bookmaking business tomwaterhouse.com all-pervading fixtures at some professional sporting events.
It hasn’t come cheap. Newspaper reports suggest Waterhouse spent $15 million to get a seat in Channel Nine’s commentary box during its rugby league coverage and BRW’s own investigations suggest that his business is spending north of $25 million a year building the ‘Tom Waterhouse’ brand.
While Waterhouse is almost certainly not as rich as many supporters and critics alike seem to think, the aggressive push has undeniably made him the face of sports betting in Australia.
It is an industry growing at enviable levels – about 15 per cent a year over the past five years according to IBISWorld.
To professional sporting associations and broadcasters, it offers a new source of revenue and a rare opportunity for growth.
But to anti-gambling advocates, sports betting bookmakers are getting rich off problem gamblers. They say sports betting is hurting public welfare and threatening the purity of sport.
Newspaper columnist Peter FitzSimons is the latest critic of Waterhouse and his preferred way of making money.
In his latest syndicated column for Fairfax Media, published on April 4, he says one of the biggest problems is that bookmakers have moved out of the shadows and into daily lives.
“[They are] surrounding us, infesting us, getting their clutches into people we know, elbowing us in the ribs trying to get us to cough up our own money, and inevitably making kids think that gambling on sport is simply what everyone does.
“And with the line now SO blurred between advertisers and the sports coverage itself that some kids even think the bookies are the stars…it really is time to act.”
Suggestions that Waterhouse has indeed become a star are supported by the lofty valuations being ascribed to his business.
On March 19, it was reported that British bookmaker Ladbrokes was interested in buying half of tomwaterhouse.com in a deal that valued the business at between $200 and $300 million.
This led to more media coverage for Waterhouse, who seemingly had claims to a spot on the BRW Rich 200 list.
At BRW, we are not convinced.
Waterhouse was closely considered for last year’s BRW Young Rich list but his net wealth failed to reach the $18 million cut-off.
Putting aside the ethics of what he does for a living, there are several reasons why BRW is not bullish on Waterhouse.
For one, he doesn’t appear to have ever fully owned the business.
The use of his name and likeness suggest tomwaterhouse.com is all his but documentation filed with the ASIC suggests that his stake is closer to 25 per cent.
The presence of other investors (family members or otherwise) seems to be supported by the big marketing budget; cash was being burnt on promotion well before large sums started flowing the other way.
The business is yet to turn a profit, which in most business valuations is all that really matters.
While the Waterhouse family has a long history in bookmaking, Tom’s business is only three years old. Building a $200 million company rarely, if ever, happens this quickly.
Sports betting is a low margin business that relies on high turnover. Despite his public profile, Waterhouse has less than 10 per cent of the local market.
His intimate association with the brand also makes it difficult for him to get away from it. Any buyer is likely to demand that he remains ‘hand-cuffed’ to tomwaterhouse.com for several years.
Other potential problems for Waterhouse include a seemingly high level of regulatory risk. Sports betting is nothing if not controversial. Governments will be forced to act if public disenchantment with bookmakers reaches a perceived threshold.
The barriers to entry for bookmakers are also not as high as in years past when success was dependant on standing in the right spot at big horse race meetings.
Sports betting has become possible by advancements in wireless technology and new operators with faster and better technology are a big risk for existing operators.
Aggregation opportunities are seemingly unfilled in what is still a new and evolving industry.
Ultimately, gamblers want the best odds and may turn to web-based aggregators (sites that provide clear information and access to all bookmakers) to get them.
Tom Waterhouse has built a big business but his critics may take comfort in the news that while he may have made the transition from bookmaker to media star, it may be some time yet before he goes from star to Rich-lister.
