Australian betting operator Tabcorp Holdings keeps signaling that its struggling UK-facing online betting division may not be long for this world.
Ahead of Friday’s annual general meeting in Melbourne, Tabcorp issued a fiscal Q1 trading update which showed revenue of A$578.8m (US $443m) in the three months ending September 30. The sum is 5.3% higher than the same period last year, thanks in large part to strong gains in its gaming services division.
Tabcorp’s mainstay Wagering & Media division reported revenue up 4.5% to A$481.5m on strong digital activity. Overall wagering turnover was up 3.5%, with digital turnover rising 17% to A$1.1b while retail betting slipped 1% to A$1.55b.
Not all digital operations were worth celebrating. The company’s Northern Territory-licensed online betting brand Luxbet remains under strategic review after posting an earnings loss of A$13m in FY17, and Tabcorp said it expects to announce the outcome of this review “in the coming months.”
In the UK, trading at the struggling Sun Bets operation “remained challenged” in Q1, with revenue of just A$1.1m. That’s a 5.3% year-on-year improvement for the site but this was still “below expectations,” particularly since the site launched in August 2016, i.e. midway through the previous year’s Q1, making that 5.3% year-on-year improvement look even more anemic. Sun Bets is a joint venture of Tabcorp and Rupert Murdoch’s News UK media chain.
In June, Tabcorp insisted it was committed to making a go of Sun Bets, despite losing A$18m in its fiscal H1. Tabcorp said it has enhanced the site’s sportsbook and casino offerings and implemented revised marketing and CRM strategies but cautioned that Sun Bets’ performance “remains under review.”
Tabcorp’s other divisions were a mixed bag, with Gaming Services shooting up 47.8% to A$41.4m following last year’s acquisition of technology outfit Intecq, while the Keno division slipped 5.3% to A$54.8m due to “a strong jackpot sequence” in last year’s Q1.
Speaking at Friday’s AGM, Tabcorp chairperson Paula Dwyer (pictured) said the company was giving Sun Bets a little more time to right the ship, but if performance didn’t pick up, Tabcorp would “give serious consideration to exercising our contractual right to exit operations” as of December 31, 2019.
Dwyer also offered an update on Tabcorp’s proposed merger with Aussie rival Tatts Group, which has run into opposition from Australia’s competition watchdogs. In September, an Australian Federal Court sent the matter back to the Australian Competition Tribunal for further review, and Dwyer said the Tribunal “considered the matter over two days this week and we are awaiting the decision.”