Tabcorp’s C-level leadership have broadly endorsed ongoing Australian gambling reforms, in particular the creation of a ‘level playing field’ across the market and tightening restrictions around advertising.
Bruce Akhurst, Tabcorp Chairman, and Adam Rytenskild, the ASX firm’s Managing Director and CEO, commented on political developments at the company’s recent AGM, whilst also offering insights into the outcomes of its extensive restructuring efforts.
Tabcorp’s advertising agenda
Advertising has become a key topic of discussion in the wider debate on Australian gambling reform, with the federal government, as well as the state administrations of New South Wales and Victoria, moving to overhaul existing regulatory frameworks.
Of note, some Labor MPs – Labor being the governing party of both Australia and the two aforementioned states – have called for restrictions on betting advertising, most significantly a total ban.
This has been criticised by some sections of the industry, but Tabcorp seems more receptive, with Akhurst and Rytenskild reiterating arguments made by the latter back in April to Peta Murphy MP, the legislator who oversaw the federal inquiry.
“Tabcorp remains committed to meeting community expectations,” Akhurst remarked. “We believe there is too much gambling advertising. Families should not be inundated with gambling advertising while they are watching television.
“We remain committed to not advertising on free to air television between 6am and 8.30pm next year, if the government does not implement changes sooner.”
Tabcorp has ‘led the policy debate’ around gambling advertising, the company’s chairman asserted, such as advocating for greater restrictions during the parliamentary inquiry into online gambling.
This inquiry subsequently resulted in 33 recommendations to the federal government of PM Anthony Albanese for policy changes to Australian advertising law. As mentioned above, MPs have now called for a wide-ranging ban on betting advertising to be included.
Rytenskild, who attended the inquiry in person, echoed Akhurst’s sentiment, saying: “There is too much gambling advertising on television and the community rightly expect more from their wagering operators.”
A level playing field
The executives also took the opportunity to reiterate their views on ‘foreign bookmakers’, an area that is being addressed by the ‘level playing field’, which Akhurst believes will enable Tabcorp to fairly compete with overseas firms ‘for the first time’
The Chairman continued: “Policy settings were enhanced with level playing fields delivered in Queensland, Tasmania and the ACT. While Victoria will have a level playing field from the middle of next year – regardless of the licence outcome.
“Since Queensland implemented a level playing field in December 2022, there has been a significant improvement in the performance and profitability of that State.”
The activities of ‘foreign bookmakers’ is an area Tabocrp has been vocal about in the past. The group’s engagement with the parliamentary inquiry saw this topic highlighted back in April.
At the time, Rytenskild’s submission to Peta Murphy MP singled out Tabcorp’s competitors Entain – operator of Ladbrokes Australia and Neds – and Flutter Entertainment’s Sportsbet as being ‘less regulated’ and paying less tax than Australia-founded and based firms.
TAB25 – where now?
Lastly, in Tabocorp’s AGM statement the leadership duo also addressed the group’s own performance and future targets. Both 2022 and 2023 have proven transformational years for the company, with the most notable development being the demerging of its Lottery and Keno business.
Tabcorp’s primary area of operations now revolves around the Wagering and Media unit, including its flagship TAB sportsbook brand, whilst the lottery and keno side of its business now operates as The Lottery Corporation, a separate ASX-listed enterprise
The fiscal details of the group’s performance saw full year 2023 revenue (July 2022-June 2023) rise 2% to AU$2.4bn, whilst EBITDA rose 8% to $319m and EBIT by 103% to $150m, with the group contributing $1.1bn to Australian horse racing.
After clearing 2023 trading, Tabcorp is now focused on completing the objectives of its three year TAB25 plan – 30% Digital Revenue Market Share, a 10% Return on Invested Capital, and an operating expenditure of $600m–$620m by full-year 2025 trading – with two years remaining.
“If these targets are met they will deliver material growth and value for shareholders,” Akhurst continued. “We see it as very important that management incentives completely align to our strategy and end objective of growing shareholder value.
“This is a very disruptive period for our company. The Board is very conscious of the need to deliver long term financial outcomes for shareholders and to retain, motivate and reward management to do the work to achieve this.”