Tabcorp Continues Recovery Despite Revenue Decrease

Tabcorp Holdings, the Australian lottery and betting operator, released its financial data for the first half of the fiscal year, and despite declining profits and revenues, the company says it experienced strong recovery from the effects of the novel coronavirus pandemic.

The Australian company recorded revenues of 2.87 billion dollars for the six months to 31 December 2020, an amount which represents a 1.5% drop from the 2.91 billion dollars earned in the same period in 2019.

The primary sources of income for Tabcorp remained its lotteries and keno. These products produced revenues of 1.61 billion Australian dollars, an increase of 1.6% compared to the first half of the 2019-2020 fiscal year.

The company reported an increase in sales across all base lottery and keno games in the first half of the 2020-2021 financial year. These results were partly due to the recent refresh of the “Set for Life” and “Saturday Lotto” games.

The digital part of the business had a major impact overall, with the share of turnover attributed to this vertical increasing to 32.1% for lottery and 17.1% for keno.

The growth of the digital side of the business helped to offset declines in retail, a sector which was deeply affected by the restrictions imposed by authorities due to the coronavirus pandemic.

Tabcorp noted a major decrease in gaming service revenue, which dropped from 149 million dollars to just 73 million. That major drop was due to the impact of Covid-19, as in some Australian states venues had to be closed for months.

About the company’s results in the first half of the fiscal year, David Attenborough, Chief Executive and Managing Director of Tabcorp, said: “We are experiencing a strong recovery following the recent market challenges. The Covid-19 pandemic continued to impact Tabcorp’s group earnings in 1H21, with the retail closures and restrictions, especially in Victoria, having a material impact.

However, we are pleased with the way our teams and partners responded to the substantial operational challenges the pandemic presented. Covid-19 has clearly demonstrated the importance of serving customers with a seamless, multi-channel experience. Investments made to modernise our digital offering in recent years drove significant benefits.”

Meanwhile, the Australian company confirmed it received offers from multiple entities for selling its profitable wagering division. Tabcorp’s “Wagering and Media” division controls around 44% of the local sports betting and racing market.

The most significant of those offers came from Entain, an important British sports betting and gambling company which owns prominent brands like Bwin, Coral, Ladbrokes, PartyPoker and Sportingbet. The initial offer was worth 2.3 billion dollars and it was rejected, but now it seems Entain improved the offer to 3 billion Australian dollars.

The Australian Financial Review reported that Tabcorp will most likely reject the new offer as well, since they would want at least 3.5 billion dollars for the wagering division.

Source: “Tabcorp 2020/21 Half Year Results“. Tabcorp Company Filing. February 17, 2021.