Herald Sun’s gambling hit: Tabcorp pulls cash from form guide

The Gillon McLachlan-led Tabcorp has pulled millions of dollars in funding from two of News Corp’s signature gambling brands – the Herald Sun racing form guide and punting platform Racenet.

The decision comes after the wagering giant suffered a $1.36 billion loss for the 2024 financial year and as it looks to slash ongoing costs to improve its bottom line.

Tabcorp is winding back funding of racing industry products after a $1.36 billion loss.Credit: Vince Caligiuri/Getty Images

Last month, this masthead also revealed that Tabcorp had withdrawn its $3 million yearly funding of racing radio station RSN 927, and in its place offered a four-month partnership extension at a heavily reduced rate.

The Racenet and Herald Sun deals were worth about $2 million a year, with Tabcorp ending the Herald-Sun form guide agreement in July, according to two sources familiar with the situation but unable to speak publicly because of commercial sensitivities.

The decision to end the agreement was instigated by McLachlan’s predecessor, Adam Rytenskild, but the former AFL boss is seeing the cuts through.

The break-up jeopardises the future of the tabloid paper’s daily racing liftout, which has been a staple for Victorian punters for decades, particularly on a Saturday morning.

Tabcorp has also ended sponsorship deals for News Corp form guides in Tasmania, South Australia and Northern Territory.

Despite the funding cut, the Herald Sun form guide still carries the Tabcorp branding, with one industry insider, not in a position to comment publicly, saying the betting company was still a major advertiser with the tabloid paper.

The Rupert Murdoch-owned media behemoth bought Racenet – a racing news, analysis and tipping website – at the end of 2018 as it looked to expand its reach into the wagering space.

It then formed the backbone of News Corp’s racing and sports wagering newsroom, created in 2021, and boasted a staff of 16 as well as form analysts such as Tony Brassel and Mark Guest.

Racenet relied on significant sponsorship from Tabcorp on top of ads from corporate bookmakers to fund its business model. The impact of the Tabcorp cuts on Racenet staff numbers is still unknown.

McLachlan had a constructive relationship with News Corp figureheads in his former role as AFL chief executive, with Foxtel spending millions on the football code’s media rights deals.

News Corp and the Herald Sun were contacted for comment.

Last month, this masthead revealed that Tabcorp would start shutting down on-course tote facilities at the end of the spring carnival as part of widespread cost-cutting measures under new chief executive officer McLachlan.

Smaller thoroughbred race clubs, as well as harness racing clubs and greyhound clubs, will be given the option to fund staff at tote windows or lose the service altogether beyond November 30 – an option that many say they cannot afford.

Last month, McLachlan told analysts that Tabcorp’s three-year strategy known as “TAB25” was unrealistic.

Ex-AFL chief Gillon McLachlan took over as Tabcorp CEO in August.Credit: Marija Ercegovac

“We’re seeing persistent inflation and inflated costs of regulation, which is sticky in our cost base,” he said.

“The underlying assumptions of the [TAB25] strategy have been proven not to be correct.

“Today’s results demonstrate a competitive performance in the soft market conditions we face [...] There’s no doubt the business is more competitive than it was at the [2022 demerger from The Lottery Corporation], but it’s not where it ultimately needs to be. It will require change, but the goal remains unchanged.”

McLachlan started in the Tabcorp role early last month after he replaced Rytenskild, who was fired based on allegations he had spoken inappropriately about a Victorian regulator. Rytenskild denies the allegations and is suing Tabcorp for unfair dismissal.