Tabcorp's decision to slash at least $1 billion from the value of its wagering division is evidence the proportion of punters enjoying a flutter at their local TAB will never return to pre-pandemic levels, analysts say.

But the lotteries and wagering giant's forecast that its earnings for the 2020 financial year would fall by at least 31 per cent profit hit was not as bad as the market feared, lifting hopes its lotteries division can restore the group to earnings growth in 2021.