Disappointing Q1 Results for Tabcorp as Revenues Decline
LISTEN TO THIS ARTICLE:Tabcorp Holdings has suffered a 6.1% decline in revenue for the first quarter, even with a rise in digital wagering turnover. Tabcorp mentioned revenue dropped in both its wagering and media and gaming services sectors during the first quarter ending 30 September.
The revenue from wagering and media dropped by 5.4% due to lower fixed odds yields subsequent to unfavorable sports results. Tabcorp revenue results reveal that fixed odds yields were at 14.8%, a decrease from 15.0% the prior year and from the past three-year average of 15.6%.
Regarding digital wagering revenue, it decreased by 3.9% during the first quarter. However, digital wagering turnover showed resistance to market fluctuations, increasing by 1.0%. Nevertheless, overall wagering turnover decreased by 0.9%.
In terms of gaming services revenue, there was a 12.9% decrease from the prior year. This decrease is mainly attributed to the exclusion of eBet revenue after its sale in February 2023. Concerning gaming services, Tabcorp is nearing the completion of the sale of its Max Performance Solutions business. They finalized terms with an undisclosed buyer in August and project to complete the transaction by the close of the first half.
Optimism for the Future
Adam Rytenskild, Tabcorp's managing director and CEO, expressed optimism, emphasizing the growth in digital turnover and the influence of the TAB25 strategy, which aims for a 30% digital revenue market share by the 2025 fiscal year.
Given the softer trading environment, I’m pleased we grew digital wagering turnover. It highlights that customers are responding to our new digital customer offering. We continue to be relentless in the way we execute our TAB25 strategy and remain focused on making the right decisions for the long-term success of the business. We’re in the midst of implementing significant change as a company and industry. Our strategy is on track as a level playing field and license reforms commence, our customer reputation grows, and the cost base reduces. Our transformation continues at pace, and I am confident we will deliver the value laid out in our TAB25 strategy.
Challenges for Tabcorp in Q1
2023's first quarter was a difficult period for Tabcorp after it was issued with several penalties in Australia.
First, the Victorian Gambling and Casino Control Commission fined the company a record AU$1 million due to its Wagering and Betting System going down during the 2020 Spring Racing Carnival. According to the Commission, Tabcorp was not forthcoming enough with information about the outage, and it repeatedly failed to comply with instructions.
In New South Wales, the company received a $15,000 fine for breaking advertising and promotion rules. A promotional advert it ran on its website featured an inducement to take part in gambling, and the advert was visible to all visitors to the site.
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