Tabcorp profit dips but recovery on track

Wagering giant Tabcorp has called for a nationwide level playing field against online competitors such as Sportsbet and Ladbrokes that enjoy lower tax rates in key markets.

TAB Corp on recovery track

Betting giant Tabcorp has called for a nationwide level playing field against online competitors such as Sportsbet and Ladbrokes that still enjoy lower taxes in key markets. Tabcorp warned yesterday that it was being hit with higher taxes in NSW and South Australia, a hangover from when online bookies did not exist and it held a retail monopoly.

Shares in Tabcorp slumped more than 15 per cent after it reported an interim net loss after tax of $636.8m and took a non-cash impairment charge of $731.9m on its wagering business. Revenue dropped 5 per cent to $1.2bn.

Tabcorp chief executive Adam Rytenskild said the recent awarding of an exclusive 20-year licence in Victoria was crucial as it sought a level playing field in other jurisdictions.

Tabcorp has faced increasing competition from major international bookmakers such as Ladbrokes and Sportsbet as customers abandon in-person wagering and place bets online.

Tabcorp, which has a substantial network of betting shops, pays double the wagering fees and taxes of bookies like Sportsbet and Ladbrokes that are only licenced in the Northern Territory and only pay a point of consumption tax on a state-by-state basis.

Queensland and Victoria have made tax changes where everyone pays the same, with other states currently looking at the same “level playing field.”

“We expect level playing fields to ultimately be introduced across the country,” said Mr Rytenskild. “That’s a positive for Tabcorp and will increase our margin over time. This will be very apparent when the new Victorian license commences in August.”

He said Tabcorp was now pushing for level playing fields in South Australia and New South Wales. “In a level playing field we can double our margins,” said Mr Rytenskild. “We are a believer in regulation, allowing us to reinvest in the business.”

Mr Rytenskild said Tabcorp’s improving market share and the broader operational result demonstrated “the substantial progress we have made as a company.”

Tabcorp CEO Adam Rytenskild

He said the Australian wagering market was healthy and was confident it would return to growth. “We are seeing positive signs from targeted investment in product, brand, data, technology and retail as we start to leverage the strength of an extensive integrated wagering and media network throughout the country,” Mr Rytenskild said.

The Covid-19 pandemic has been a boon for online wagering operators but tougher on Tabcorp, which had to shut hundereds of venues around the country.

“Total market share and digital market share grew compared to the prior half,” said Mr Rytenskild. “Today’s results are solid given market conditions, but more importantly demonstrate that the company is on track to significantly improve performance over time.”

He said the Federal Government’s online gambling inquiry would likely result in a reduction in gambling advertising when families and children watch television. “We support this,” said Mr Rytenskild.“Customer care remains central to our business.”

The inquiry recommended a ban on online gambling advertising within three years, giving major sports and broadcasters time to find alternative advertisers and sponsors.