RBA’s steady stance on the interest rates
Challenges in Wagering Industry
Equities that grabbed an eye
What if the stock market punted on LIC sector
 
Australia has been well known as the gambling capital of the western world and many punters geared up for the Tuesday’s 157^th running of the horse races. On one hand, Australia witnessed the RBA’s steady stance on the historically low rate at 1.5 per cent for a fifteenth straight month and Australian dollar remaining more or less flat; on the other hand, many bookmakers raised concerns over the growth in the wagering industry while the Melbourne Cup race was on. Experts have highlighted that introduction of new point of consumption taxes and advertising rules can pose many challenges to wagering companies in the coming times. Some called this anticipated downtrend to be a seismic event for the industry given the losses that people witness in terms of spending on betting. Online wagering (which is about A$1.4bn a year industry) has specifically gained attention from many big bookmakers to Australia while the recent political backlash is now creating trouble for the industry. As a result, the industry is witnessing some level of consolidation. Regulatory changes such as Canberra’s new media laws that now prevent bookmakers advertising on television during live sports events and before particular time periods, are posing a challenge. It is yet not clear whether any tobacco-style ban would be considered for the gambling advertising going forward.

Amidst the scenario, stocks to the likes of Tabcorp (TAH), Tatts (TTS) and Crown Resorts (CWN), with the latter two edging slightly up on November 07, 2017, have gained some attention owing to betting prospects. Many investors eyed retailers like Woolworths and Health care stocks that seem to be grabbing a hand considering the exposure of the businesses during the race and in post-race events. Punters also looked for technology stocks such as Nearmap (NEA) and Praemium (PPS) for growth.

Another area that has been equated to the wagering industry and particularly to Melbourne Cup race is the LIC sector given the interplay among an investment manager, portfolio manager taking investment decisions, and criteria of setting discount or premium to assets. Considering this, WAM Capital (WAM), WAM Research (WAX), WAM Leaders (WLE), Contango Microcap (CTN), Future Generation Ltd (FGX) and Monash Absolute Investment Company Ltd (MA1) seem to be the top picks as good contenders in the long-term race. While many have already run-up to a good extent, the resilient performance during market correction and discounts criteria with dividend paying ability make them worth a look.

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