Family values: EGR Intel speaks to Palmerbet

Leaving a steady, well-paid job to launch your own start-up business is often a gamble too far for even the most fervent risk-takers. For former equity trader Grant Palmer, however, making such a career switch to launch a new online wagering business was a risk he was willing to take.

In August 2013, Grant left his job among the hustle and bustle of Merrill Lynch’s trading floor to return to his family’s bookmaking roots and launch Palmerbet.com, along with his two younger brothers. His sibling Matthew had also previously worked in banking, trading currencies at Macquarie Group in Singapore, while Adrian faced a much easier transition when teaming-up with his older brothers to become a company director straight out of university.

“We obviously had a long, hard think about what we wanted to do and whether we could make this work,” Grant, the elder brother and company spokesperson, explains. “When it came down to it, we realised we would be stupid not to have a go because we are passionate about racing and bookmaking and I was confident we would be good at it. We have dedicated our lives to this industry, we work hard and we absolutely love it.”

Brothers in arms
Grant and his two brothers grew up at some of Sydney’s most famous racecourses and spent countless Saturdays during their childhood visiting the city’s historic Royal Randwick and Rosehill Gardens tracks. It was there that they first learned from their grandfather, who ran his own betting stand for many years, the nuances of being a successful bookie. Unsurprisingly, their father is also an on-course bookie.

“On Wednesdays, Saturdays and public holidays, we would often go to the races and work there with our grandfather. It’s where our interest really was the whole time as we loved working at the races, dealing with the punters and the betting side of things,” Grant reminisces. “But this business [Palmerbet] was only started after our grandfather’s original involvement with regards to our online set-up. So he wasn’t around when we originally launched Palmerbet.com.

“We just saw an opportunity there and decided it was what we wanted to do,” he continues. “It obviously wasn’t an easy decision [to start Palmerbet] though because we had steady jobs which were well paid but it was something we were all so passionate about. You’ve just got to do what you love.”

(From left to right) The Palmer brothers, Adrian, Matthew and Grant manage the firm together

Today, Grant and his two brothers are channelling this love for the industry into their expanding online venture and are aiming to carve out a big slice of the Australian online wagering market. Speaking to Grant, it is abundantly clear he has a genuine affection for both horseracing and bookmaking – but as a third-generation Sydney-based bookmaker, such passion is hardly surprising.

“It wasn’t an easy decision [to start Palmerbet] but it was something we were all so passionate about. You’ve got to do what you love”

Grant and Matthew received their licences at the relatively tender age of 21 and took every chance to further their bookmaking education at university – albeit outside the classroom – by continuing to operate their track-side business. Grant says he recognised early on that there was an even greater opportunity with the digital side of the wagering industry. Later, while simultaneously carving out a career in Sydney’s financial sector, he began plotting how to build their own online business from the racecourse up.

“We still operate the on-course business now, which makes us quite unique in the corporate environment because we are probably the only one that still does,” Grant claims. “So we still have a stand on a Saturday at the races at Randwick and Rosehill, for example, and we are also going to start working in Melbourne at some point this year.”

Made for the business
With two out of the three brothers’ CVs listing major global financial institutions, it’s unsurprising that Grant sees compelling parallels with an investment bank’s trading floor and his vocation as a bookmaker.

“I believe working in equity or currency trading and in bookmaking are very similar roles,” he says. “When you take decisions, you have a view of what is happening, you stay informed and you know who the market players are. It is also very similar in terms of risk-taking and making those sort of decisions – handling losses and handling yourself when you lose is a skill that takes time to perfect.”

Grant Palmer left his job as a banker to found Palmerbet.com

The trio – who are all directors of the company – have carved out and defined their own roles at Palmerbet, individually managing different parts of the business, from operations to trading. “It has worked well so far in that we have given ourselves that responsibility and taken ownership of different parts of the business,” Grant adds. “We’ve taken what we are good at and each taken ownership of that within Palmerbet.”

But the Palmerbet operation today isn’t only about the three brothers – it is very much a wider family business at heart. The whole Palmer clan, from the trio’s sisters to their father, are involved in the business in some way, shape or form. And even the brothers’ mum acts as the operator’s solicitor and business consultant, helping Palmerbet secure its New South Wales licence and ensuring it continues to meet any additional licensing requirements.

Having the backing of the rest of the Palmer family has assisted the Sydney-headquartered wagering company in numerous respects. Arguably of most importance, it has given the business the freedom to rely solely on the family coffers for its financial muscle, rather
than having to dance to the tune of any third-party investors. This meant that from day one, Palmerbet has been in charge of its own destiny – a state of play Grant sounds unlikely to alter any time soon.

“We have just grown organically and haven’t gone out and blasted away funds on trying to grow too quickly. It is all about organic growth”

“We started off as a very small bookmaker and I’ve had a racing licence since I was 21, which was about 12 years ago, and Palmerbet is an extension of that,” he continues. “We have just grown organically and we haven’t gone out and blasted away funds on trying to grow too quickly. It is all about organic growth. We haven’t needed to go out and get funding from third parties. It has remained in the family and we are happy with the way things are going in that regard.”

Racing ahead
With a staff headcount of 21, Palmerbet. com is still a relatively small player in the Australian online wagering market compared to most of the homegrown giants and so-called “corporate bookmakers”. Such a difference is exemplified by the fact its on-course betting stand is still regularly manned at the weekend by one of the Palmer brothers.

But according to the elder sibling, the company’s headcount – which includes its own trading team, customer service and IT specialists – is now “growing rapidly”. And he seems intend on continuing this expansion policy based on the company’s recent upward trajectory. “We are always looking at opportunities to increase our headcount and if the right candidate or opportunity comes along, we will obviously be more than happy to expand the team,” he says.

Although the company’s number of staffers is growing, it is difficult to really gauge just how well Palmerbet is performing against the competition. Grant is coy about revealing any specific revenue or turnover figures for the business, limiting his assessment to: “We are happy with what we have carved out.” Yet he is simultaneously open and realistic about the firm’s place in the wider wagering landscape, admitting that Palmerbet is still some way off obtaining a position alongside the likes of Sportsbet and William Hill as one of Australia’s tier-one operators.

Grant Palmer says his firm aims to lay bets to any player

For any relatively new Australia-facing online operator, it is hard to compete with the big corporate bookies, which Grant describes as having “bottomless pits” of marketing cash. Instead, Palmerbet looks to find niche marketing spots where it thinks it can get the best possible ROI and, as a result, is very selective with any campaign or affiliate partnership it undertakes. And with this in mind, the company is also aiming to position the brand as the online bookie that, within reason, is willing to lay bets to any punter.

“That is our style of bookmaking – to bet as many people as we can within reason. It is obviously not everyone’s style but it is what we have grown up doing and we’re happy to bet everyone,” Grant says. “We operate on-course and there are certain limits you have to abide by which we are more than happy to do. Everything has limits and you are always going to have to manage your risk, your P&L and your clients, but we want to take it as far as we possibly can.

“We are not going to own tier-one marketing assets like William Hill with its sponsorship of the Australian Open, and for a business like us, the return on investment wouldn’t be there for something like that anyway. The key to success is knowing where there is a unique opportunity and where there isn’t.”

Time for change
From a product perspective, Palmerbet’s in-house team of developers were themselves responsible for creating the operator’s website and improving its overall digital footprint. This is one area where Grant says he is confident the Sydney-based company can find points of differentiation from the competition in the future. And as a result, the company is now “investing heavily” in its technical capabilities as it begins the process of hiring more developers to meet the firm’s growth ambitions.

“I feel the decision not to allow in-play betting is a hasty decision, influenced by power interest groups”

The one area Palmerbet says it has so far been unable to compete with the tier-one bookmakers on, from a product perspective, is via its live betting offering. But the operator plans to overcome this by expanding its online in-play capabilities with more live pricing and scores to complement the firm’s phone wagering service, which already accounts for the large bulk of its turnover. Palmerbet can also take solace in the fact it didn’t waste any resources developing a click-to-call service, an idea it knocked on the head at a very early stage.

But the company is clear which side it is taking in the country’s ongoing crackdown on online in-play betting. And it sounds ready to make its voice heard in the debate when required – even if that means siding with the foreign operators. “I feel the decision not to allow in-play betting is a hasty decision, influenced by powerful interest groups including the TAB and Clubs groups which have vested interests in the continued in-play ban through their retail exclusivity and poker machine businesses,” Grant says.

“I think the government feels that the ban is about harm minimisation and the protection of the integrity of sport. But in reality, it will push customers to illegal sites based overseas which will have no responsible gambling guidelines and be completely unregulated.”

As one of the few remaining “100% Australian owned and operated” bookmakers left, Palmerbet is clearly anxious to ensure the country’s online wagering sector remains as vibrant as ever. And while it has many hurdles leſt to jump to obtain a position as a tier-one operator, few would bet against a family-owned business with more than 30 years’ on-course betting experience finding a way.