Australian wagering operator Tabcorp saw healthy fixed-odds betting growth in fiscal 2014 thanks to increased options, burgeoning digital channels and some international soccer tournament. For the 12 months ending June 30, Tabcorp net profit after tax rose 2.6% to A$129.9m (US $120m) but Tabcorp insists those figures would be 7.4% and $149.4m if it weren’t for that dastardly state government in Victoria. (More on this missing $19.5m later.)
Tabcorp’s wagering division accounted for over three quarters of the $2.04b in FY14 group revenue. Tote wagering generated $1.26b of this haul, but that represented a 6.3% year-on-year decline. In contrast, fixed-odds racing revenue rose 37% to $322.9m while fixed-odds sports bets grew 12.7% to $186.6m. The first half of the 2014 FIFA World Cup earned Tabcorp $14.9m while the July portion of the tourney earned an additional $10.3m.
Retail turnover fell 1.2% in New South Wales and 4.9% in Victoria but Tabcorp says the situation in H2 was an improvement over H1. Tabcorp’s Northern Territory-licensed online betting site Luxbet reported revenue up 22.5% to $47.9m. Tabcorp’s overall digital wagering turnover rose 18.2% to $2.9b, 54% of which came via mobile devices, up from 36% in FY13.
Tabcorp’s Media and International division saw revenue of $220.4m (+6.2%) and earnings of $68.5m (+2.2%). Gaming Services added revenue of $98.1m (+13.7%) and earnings of $67m (+14.9%) thanks to the signing of two NSW venues and a new loyalty scheme covering its 8,500 electronic gaming machines in Victoria. Keno revenue came to $203.9m (-0.7%) and earnings were $72.2m (-4.4%).
Looking ahead, CEO David Attenborough (pictured) has high hopes for Tabcorp’s new ACTTAB acquisition. But Attenborough is not looking forward to new race fees imposed by the state governments in Victoria, Queensland and South Australia, which, had they been in effect in FY14, would have cost Tabcorp an extra $12m.
Meanwhile, Tabcorp’s legal cage match with Victoria’s government shows no sign of abating. On June 28, Tabcorp lost its bid to reclaim $687m it felt it was owed via the enforced end of its pokies duopoly in Victoria. Tabcorp has since taken that case to the Court of Appeal. On July 1, Tabcorp lost its appeal of a lower court ruling ordering it to pay a full year’s levy on those Victorian pokies, despite Tabcorp having lost the duopoly just 46 days into the fiscal year. Tabcorp is seeking leave to appeal this ruling – which created that $19.5m deduction from its FY14 earnings – to the High Court of Australia.
Making matters worse, late last month the Australian Football League (AFL) let it slilp that it was considering a review of its four-year exclusive wagering partnership with Tabcorp. The deal, which ends later this year, is hotly coveted by rivals William Hill Australia and Matt Tripp’s Beteasy (formerly BetEzy). Tripp told The Age his understanding was that the AFL was looking for a non-exclusive relationship but Tabcorp’s Craig Nugent insisted his firm would be looking to extend their AFL deal “for 2015 and beyond.”