Lottery and Wagering Revenue Boost Tabcorp’s Recovery

Tabcorp Holdings’ reported a slight 1.5% group revenue decrease for the first half of 2020/2021 with the company’s lottery and wagering units offsetting the slump in the Gaming Services division.

Tabcorp On the Path to Recovery After Challenging 2020

Australia’s largest gambling company Tabcorp has released its 2020/2021 interim results for the period ending 31 December. Digital turnover in the operator’s wagering and media division was up 43% year-on-year in the first half of 2020/21, thus pushing digital revenue by 34%.

However, the pandemic-related restrictions led to about 1% decrease in overall revenue in the wagering and media division to A$1.189 billion (£664.8 million). Annual group revenue was also down by 1.5% to A$2.87 billion (£1.6 billion).

Tabcorp’s lottery and wagering units were the company’s top performers during the first half of 2020/2021. The ‘lottery and keno’ division contributed 2% revenue increase to A$1.61 billion, while the wagering unit recorded a 1% revenue uptick to A$1.19 billion. The growth of the lottery and wagering divisions compensated for the plunge in the ‘Gaming Services’ unit by 53% to A$66 million.

Tabcorp Shy On Entain and Apollo Takeover Bids

The operator’s wagering arm has attracted the interest of investors in recent weeks with Entain and Apollo being some of the suitors. British betting giant Entain has offered a speculated $3 billion for the bookmaking unit, while US private equity firm Apollo has shown interest in the business segment.

Tabcorp’s managing director David Attenborough said that there is no surprise about the interest in the wagering unit, since “there’s a really strong opportunity in that business to grow”. Attenborough did not share further details of the takeover bids, but he said the company “would carefully consider all of the relevant issues and strategic options that arise in respect of these matters.”

The process of integrating TAB and UBET brands is almost complete following Tabcorp’s merger with lotteries operator Tatts Group three years ago, Attenborough added. Also, the recent investments in the business to better compete against online rivals like Sportsbet have further sparked the interest in the betting division.

Last week, the Australian Competition and Consumer Commission (ACCC) said that it is closely monitoring the rising interest in Tabcorp’s wagering and media arm. The regulator explained that a transaction of this magnitude is a potential game-changer for the Australian wagering market.

In relation to the company’s outlook, Attenborough highlighted that all three business lines are well positioned for the second half and the operator will continue to boost digital growth and operational improvements, as well as to optimize costs.