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Australian wagering giant Tabcorp announces half-yearly results

Thu, Feb 14, 1:51pm by Staff Writer

Australia’s biggest gambling company is embarking on an aggressive marketing and bonus-bet push, despite fierce competition from its online bookmaker rivals.

On Wednesday, Tabcorp revealed a slump from its wagering division, which contributed to its overall profits missing analysts’ forecasts, had come on the back of a deliberate promotional push to expand its customer base.

For years Tabcorp’s advertising has been subdued in comparison to its online-only rivals, with Tabcrop merging its national operations with the Tatts Group.

The bookmaker has increased its marketing efforts since the 2018 footy finals and spring racing carnival, which has helped it hold its market share.

“I don’t think you’ll see us taking our foot off the pedal for the next year, or year and a half as we manage through this transition,” Tabcorp chief executive David Attenborough told itnews.

“It is really crucial during transition that we keep going strong so we don’t see market share too heavily eroded.”

Tabcorp told shareholders this week that its underlying profit for the six months to December was $210.6 million – more than twice the profit it made the same time last year.

The figure still fell short of forecasts, which had been in excess of $223 million.

Lotto sees sharp rise in popularity

Tabcorp’s half yearly results also show a market that is increasingly tempted by big money lotto draws.

The performance of the company’s digital lotteries sector increased an impressive 63.5 per cent in turnover, due to a growth in product offerings and business improvements.

Digital lotteries now make up 21.5 per cent of that segment’s total turnover, which Mr Attenborough called the standout performance of the results.

Retail turnover has also seen sizable growth, up 11 per cent.

“The strong performance was driven by digital growth and game innovation, including bigger and more frequent Powerball jackpots,” Mr Attenborough told IT News.

Big prizes and the ability to get your lucky numbers in digitally instead of queuing at a newsagent is also seen as a major reason for the boom in digital lotteries.

Total lotteries revenue was up 19.6 per cent, coming in at $1.292 million.

Bonus bets & taxes to eat into profits

Tabcorp’s wagering and media division did not boast as impressive results, with a four per cent drop to $159.6 million in earnings.

Increased advertising and promotional offerings such as bonus bets have been attributed to the drop in revenue.

The strategy has proven to be beneficial for the bookmaker though, with Tabcorp’s TAB brand growing its customer base by 6.7 per cent to 533,000.

Tatts Group’s struggling UBET brand “held market share”, Mr Attenborough said.

The emphasis on an increase in advertising came after a raft of new state-based taxes took effect at the turn of the New Year.

The point-of-consumption tax applies to bookmakers such as Tabcorp, BetEasy, Sportsbet, Bet365, Ladbrokes and Betfair.

It will collect 8 per cent of their net wagering revenue in Victoria.

In New South Wales, the tax rate is 10 per cent, while in South Australia, Western Australia and Queensland it is as high as 15 per cent.

The tax is set to apply to free or bonus bets as well, which are regularly given out to punters.

Tabcorp shares dropped on Wednesday to end the day trading nearly 4 per cent lower at $4.58.

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