Tabcorp asks for rental relief
Leaked documents reveal betting giant Tabcorp is asking for a six month rent holiday from its commercial landlords after coronavirus forced the temporary closure of its 4500 physical betting outlets.
The Saturday Paper reports that correspondence from Tabcorp to 374 commercial landlords says the business is experiencing significant disruption due to “unforeseen and extenuating circumstances that have arisen in light of the Covid-19 pandemic.”
In the latter, Tabcorp “respectfully” requests a six-month suspension of rent and outgoing from April 1 to September 30.
The relief would give the company “much needed relief and capital to enable the business…to be relaunched once consumer confidence has been restored.”
If granted full rent suspension, Tabcorp could save an estimated $20 million from 374 retail outlets.
The remaining 4000 or so betting booths are inside pubs and cubs.
As Tabcorp and others in the gambling industry try to ride out the crisis, experts fear a boom in online betting will soon strike with millions of Australians in lockdown.
Monash University gambling expert Charles Livingstone says psychosocial stress from the coronavirus crisis could be a driver of high-risk and addictive gambling.
While poker machine operators will lose an estimated $7.5 billion revenue if pubs and clubs are shut for six months, Associate Professor Livingstone expects at least some of that revenue to migrate online.
He predicts Tabcorp will be looking to build its online business during the crisis and is expecting some aggressive marketing tactics – noting that the online gambling industry is already the third or fourth biggest buyer of broadcast television advertisements.
Tabcorp drives more customers online
Wagering giant Tabcorp has said its punters are embracing its efforts to get more customers betting online, when remarking prior to coronavirus in January.
The Sydney Morning Herald reported that a third of Tabcorp’s active customers in Victoria and New South Wales placed an online bet in a venue since October.
The shift to digital betting, led by others in the industry such as Sportsbet and Ladbrokes, over the past 15 years presented a challenge to Tabcorp’s retail network of 4,000 betting agencies and entertainment venues.
The $9 billion group’s managing director of wagering Adam Rytenskild said many punters went to its pubs and clubs to watch live sport and racing, but placed bets on their phones, not the TAB betting terminals.
This meant the venue would not get its cut of the gambling turnover.
“That’s not good for the publicans, that’s not good for the clubs and it’s not good for TAB,” he said.
“There were some extreme situations of marching customers out of the venue if they weren’t betting cash with them.”
Online wagering boosted; Venue Mode launched
TAB’s online wagering turnover grew by 7.4 per cent last year, while its retail turnover fell 7.7 per cent.
Its wagering revenue is roughly split 50/50 between the two channels now.
Overall, wagering revenue fell 3.6 per cent last year, with Tabcorp’s bottom line propped up by the lotteries business it acquired through a 2017 merger with Tatts.
Tabcorp started rolling out systems in late 2016 that used geolocation technology to identify when a customer placed a bet on the TAB’s smartphone app within a venue, so the revenue could be shared.
Mr Rytenskild said that did not stop up to 60 per cent of the online bets in venues being placed with rival bookmakers.
Tabcorp is now trying to combat that by rolling out “venue mode” on its app, which gives customers special offers or deals only accessible in TAB venues.
The feature was designed to encourage punters to both choose TAB over its competitors and also drive patronage at TAB venues.
Mr Rytenskild said the early signs were positive, with the number of customers re-activating their accounts and placing a bet in venues after not doing so for six months jumping by 60 per cent.
The number of new digital customers placing bets in venues grew 20 per cent.
About 160,000 customers have used venue mode in Victoria and New South Wales since its launch, which is about a third of its active customers in those states.
“What has changed now is we’ve got venues saying: go for your life, you choose how you want to bet, as long as you’re betting with TAB,” Mr Rytenskild said.