That night on Channel Nine was Friday Night Football, Broncos v. Dragons, and sitting next to league legend Phil Gould at the commentary desk was the young Tom Waterhouse - dapper, well-spoken, perhaps Australia's best-known bookmaker.

Ostensibly, he was part of Nine’s expert analysis team that night, but really, it was a commercial arrangement allowing him to spruik betting odds on the match, on upcoming matches and even horse-racing meets. Hockey's post that this was all "too far" prompted a strong response: "Agree!" said many. "YES, YES, YES,'' said another.

"So easy to gamble with these smartphones." "For bookies to have a spot on live telecasts is just outrageous." "What will you do about it Joe?" Waterhouse - a fourth-generation bookie from a family of racing royalty and arguably this country's most polarising gambling figure - shot to attention several years ago with his relentless promotion of tomwaterhouse.com.

He eventually sold the site to British wagering giant William Hill for $34 million and in 2014 was appointed as its local chief executive. In that role he has taken a step back from the spotlight but this week, he is in the headlines again. News has emerged that William Hill in Australia is drastically underperforming and will be placed under immediate review by its British parent company. Loading In a statement to the London stock exchange, William Hill, the UK's second-largest bookmaker, signalled it may sell up or close down the Waterhouse-led company, citing its inability to cope with a wave of tougher government regulations and new state taxes of up to 15 per cent to apply to digital betting. The company revealed its betting volumes were shrinking in Australia, and it would be "undertaking a strategic review of our Australia business".

Despite William Hill’s hefty $700 million investment buying into the ultra-competitive Australian market during 2012 and 2013 - acquiring tomwaterhouse.com, Sportingbet and Centrebet - it now appears William Hill Australia is teetering on the brink of failure. What then happens to Tom Waterhouse remains unknown. Ask any number of people in the sports-betting sphere, and you’ll hear Waterhouse’s appearance on Friday Night Football, that night in March 2013, often referred to as a "tipping point" that changed the industry forever. Just weeks later, Tony Abbott, the Liberal leader at the time, vowed to ban live betting odds during sports games if he was elected, calling the practice a social nuisance. Julia Gillard's Labor government responded with a similar commitment to take to the election. "Families have become increasingly frustrated about the penetration of live odds into sporting coverage," said Gillard, "worried that their son or daughter is now talking about the game not through the prism of what's happening on the field, but through the prism of the associated betting."

Then Prime Minister Julia Gillard pledged a crackdown on sports gambling advertising in 2013 Credit:Alex Ellinghausen It was the beginning of the public and political push-back that has recently culminated with the introduction of a suite of hardline measures including: restrictions on when and where bookmakers can advertise; a prohibition on extending lines of credit to punters; a clampdown on legal loopholes and restrictions on offering 'free bets' or inducements to lure new customers. These measures that are now putting the screws on bookmakers like William Hill. "Ironically, the community backlash really started with Tom Waterhouse," explains Sally Gainsbury, a gaming industry expert with the University of Sydney. "He was an individual rather than a brand. And he served as a catalyst for the community to say this was unacceptable."

The popularity of digital sports-betting brands has exploded in Australia since cross-border regulations were relaxed in 2008. Largely off the back of internet and app-based wagering, sports-betting has swelled more than 10 per cent every year, and sometimes by as much as 30 per cent. Many of the world's biggest and best-known international gambling powerhouses - Paddy Power Betfair, Ladbrokes, William Hill, Bet365 - moved into the market, obtaining licences in the lower-tax Northern Territory. They have turned Australia into one of the most competitive online betting markets globally. That competition means there is a fierce fight for market share - with blanket advertising and sponsorship messages during televised sports events. Of course, even before the rise of Tom Waterhouse, concerns had been building for some time already about the growing prevalence of betting odds being displayed on stadium scoreboards, gambling ads during live broadcasts, and the dangerous effect this could be having on children and the community.

"But when Waterhouse took the microphone and stood on the side of the field, he was someone who was identifiable," says Dr Gainsbury. Sally Gainsbury says the backlash against sports betting exacerbated by Tom Waterhouse's appearance on television Credit:Richard Windeyer "He was a private schoolboy, he was not seen as man of the people, and he was spruiking odds at us. Arguably, his commentary on TV and on the sidelines was really a step too far that the other operators hadn't taken ... and that's when the regulators got involved." These days, you don’t have to look far. Sports-betting is everywhere. With a reputation for attention-seeking ad campaigns, it is on the map like never before. But, in the context of the overall gambling market, it accounts for about less than a $1 billion a year - far less than other forms of gambling. Pokies losses, at $23 billion, dwarf sports betting. While losses at casinos ($5.2 billion), racing ($2.9 billion) and Lotto ($1.9 billion) are also all much larger.

As one wagering industry insider put it this week: "Most Australians don't bet most of the time, and before Tom Waterhouse, they didn't mind that other people did. "What Tom did was bring sports betting squarely into public attention. TV ads were wall-to-wall. Trams were going up and down Collins Street with those turquoise posters and his black and white mug. People were soon saying something needed to be done." Legal moves The laws governing our sports-betting landscape - its promotions, product offerings and consumer protections - have come a long way since the days of live-crosses to Waterhouse on the boundary lines at the rugby and the tennis and his regular slots on Channel Ten's news bulletins. Sportsbet, Bet365, CrownBet, Ladbrokes, Betfair and Unibet have all signed up to a lobby group led by former Labor frontbencher Stephen Conroy, in an effort to keep the industry sustainable and restore its "social licence" that it has lost in recent years.

The group has been widely accepting of a series of concessions, such as the bans on offering credit, and and has made commitments to reduce advertising volumes during live sports, a policy which is expected to take effect in March. Whether you like him or not, Tom did a really good job when he was running tomwaterhouse.com - his brand was out there, and it was powerful. Friend of Tom Waterhouse It's a strategy that's considered a sound move by many in the industry. Despite public perceptions of greedy, cashed-up sports-betting bookies, their wagering margins in Australia are often wafer-thin, and operators are highly vulnerable to the impact of sudden regulatory change. "The government really has the power tax or regulate the industry out of existence," a source said. "The stroke of a pen could just wipe us out." That pressure is evident in William Hill's most recent half-year results released in August.

Profit pressure The company revealed profit before interest and tax had plunged 85 per cent, to $1.1 million, for the six months to June 30 despite net revenue lifting 5 per cent to $97.4 million. "Overall profit performance was disappointing," it told the market, "as weaker gross win margins meant the wagering growth did not translate into the expected revenue growth." William Hill UK has also told the stock market that credit betting accounted for a very large part of its Australian wagering volumes - 30 per cent - and would further pressure profits. Insiders say this dynamic could explain the noticeable absence of Waterhouse’s William Hill from the Conroy camp and its seemingly more proactive attitude towards socially responsible policies.

The theory being that William Hill Australia declined to join because it had no intention to cut back its large advertising spend or to withdraw lines of credit to customers. "[It] was wedded to credit betting," another source said, "and built the business on the things that the rest of the industry knew were going to go." Illustration: Joe Benke Then, there is another looming cause of nervousness for the bookmaker, and the wider online wagering market: new state taxes on digital betting. Three jurisdictions now - South Australia, Western Australia and Queensland - have moved to impose a 15 per cent "point-of-consumption tax", in response to concerns that the NT-based internet betting companies do not face anywhere near the same level of taxation imposed on the likes of Tabcorp, which holds exclusive retail licences across Australia.

The new digital tax means that, for the first time, the state where an online bet is placed will receive revenue on gambler losses online. Victoria and NSW are expected to introduce a new tax soon, but are being lobbied hard to bring it in at a lower rate than 15 per cent. This threat to online bookmakers could be severe. David Fabris, an analyst with investment bank Macquarie, has found Sportsbet to be the only online corporate bookmaker capable of absorbing a 15 per cent point-of-consumption tax in every state while retaining profitability. When asked about the pressure facing William Hill’s local operation, RWA director Stephen Conroy said: "Fierce competition, an increasing regulatory burden and higher taxes are likely to force further consolidation and closures in the Australian wagering market." There is a clear consensus among industry insiders, though, that there is another story behind William Hill's troubles here, one that can’t only be explained by government intervention. The British powerhouse also embarked on a series of questionable moves since its foray into Australia. Corporate moves

William Hill’s former chief executive, Ralph Topping, said in 2013 that the company was going to "shake up the market". Instead, many believe, it misread the market entirely. In addition to buying tomwaterhouse.com, William Hill also snapped up Centrebet and Sportingbet - two other prominent and identifiable Australian betting brands. All up, it is estimated to have spent about $700 million on the acquisitions. But in what observers say was a clear “strategic blunder, the company rolled all three into the "William Hill" brand, a name that very few Australians had ever heard of before. Appointing Waterhouse to the top of job of William Hill Australia, an arm of major sharemarket-listed company, was another move that raised eyebrows. Did he have the right experience? Was he the right choice?

"To appoint the least-popular person in wagering?" said a veteran at a rival betting business. "A very strange decision". Research commissioned by another Australian wagering company in 2016, which included focus groups and surveys to gauge public attitudes on various features of the gambling industry, asked respondents a question about the name Tom Waterhouse. The feedback was said to be "dire". Topping it off was Waterhouse's and William Hill Australia's reputation for pushing the boundaries, bringing the industry into disrepute by openly flouting consumer-protection rules. Under Australian law, online wagers during play can only be placed via telephone or in retail outlets. But William Hill developed a so-called "click-to-call" function, which connected a voice call online. The practice was banned in 2016, prompting the Turnbull government to accelerate its crackdown on the industry, with new restrictions making customer acquisitions more difficult. A friend of Tom Waterhouse described Waterhouse was an excellent bookmaker, with an indisputable record of success running tomwaterhouse.com. He also believed the failure of William Hill Australia was the result of the parent company's wider strategic errors, more so than the management of Waterhouse.

"Whether you like him or not, Tom did a really good job when he was running tomwaterhouse.com - his brand was out there, and it was powerful," he said. "When they came in, William Hill was the biggest bookmaker in Australia … they lost that title very, very quickly." Waterhouse returned from the United States earlier this week. He was unavailable for comment, and William Hill Australia declined to respond Fairfax Media's questions. As new digital betting taxes loom, and as Australian gambling giants Tabcorp and Tatts join their businesses this year in an $11 billion mega-merger, there is little doubt that 2018 is shaping up to be a year of consolidation among the nation's corporate bookmakers in an effort to remain sustainable. "Consolidation at some point in the industry is inevitable," prominent bookmaker and CrownBet chief executive Matt Tripp told Fairfax Media last year.

Even before news broke of William Hill's review of its Australian business, speculation was rife that the company was in talks with rivals about a potential buyout. There were reports out of London late last year that William Hill was in early-stage talks with CrownBet about a potential merger with its Australian business. CrownBet's Matthew Tripp. Credit:Arsineh Houspian But casino giant Crown Resorts has since agreed to sell its majority stake in CrownBet to Mr Tripp, with its divestment expected to be completed by the end of February. Industry insiders said speculation that a $300 million price tag floated for the sale William Hill Australia appeared unrealistic. They suggested it could sell for as little as $100 million. It is understood that one of the issues for William Hill is that the Australian company has significant debts from credit-betters, and buyers may not be keen to take on those liabilities.