Australian betting and lottery operator Tatts Group saw its fiscal H1 profit drop by double-digits due to a dearth of large lottery jackpots and the cost of staying relevant in the hyper-competitive Aussie wagering market.

Figures released Thursday show Tatts’ revenue fell 7.2% to A$1.42b (US $1.1b) in the six months ending December 31, while net profit after tax slipped 16.5% to A$122.7m. Discounting contributions from Talarius, the UK-facing slots division Tatts sold to Novomatic Group last June, net profit fell 15.2% to A$123.5m.

Tatts blamed the profit slide on a lack of big lottery prizes to goose lottery sales, higher marketing spending and A$10.4m in costs related to Tatts’ proposed merger with rival Tabcorp Holdings.

Tatts’ mainstay lottery business saw revenue slip 8.2% to A$1.02b, in part due to this year’s H1 featuring 15 jackpots over A$15m compared to 24 in the same period a year ago. Lottery earnings were down 10.7% to A$147m, reflecting marketing costs related to the launch of Tatts’ new ‘the Lott’ brand.