Many gambling companies have seen a sharp uptick in revenue post-Covid. Recently, Tabcorp revealed a net profit of $52 million for the half-year period ending December 31. This was a 30 per cent increase from expectations. The company attributes this to customers returning to retail betting. However, the company is now looking at increasing its online presence.
Tabcorp Sees 30% Increase in Profits
This past Tuesday, Tabcorp reported earnings, and they far exceeded expectations. According to the report, Tabcrop made $52 million in net profits for the half-year period ending December 31. This number was 30 per cent higher than expectations.
According to the report, profits came in at $1.275 billion, an 11% increase. Earnings before EBITDA rose to $197 million, a 24 per cent gain. Tabcorp reports that the primary reason for the increase in revenue is a 58 per cent rise in revenues from cash betting.
Tabcorp’s spin-off Lottery Corp shareholders will pocket a hefty dividend, with investors sending its shares to a record high. https://t.co/nAukINH0cz
— Financial Review (@FinancialReview) February 23, 2023
Punters began returning to retail outlets following COVID lockdowns rather than playing at online casinos. According to Tabcorp CEO Adam Rytenskild, “Our business has rebounded strongly from a COVID-impacted first half last year to experience strong growth in group revenue and EBITDA.
“The COVID lockdowns presented an opportunity for digital-only operators, but our retail customers have quickly returned, and our digital transformation is amplifying that opportunity.”
Following the announcement, the company revealed that it would issue a temporary dividend of 1.3 cents per share. Also, the company is announcing changes in its online footprint.
Company to Expand Online Footprint
Back in 2021, Tabcorp split its lottery and keno businesses. During the first half of the business year, the company released digital games similar to casino games at online casinos. The company plans to increase its online presence.
After the massive increase in profits, the company is pursuing further expansion of its online footprint. For the first half of the business year, Tabcorp had a 25.1 digital share. Rytenskild revealed that the company now has “a target of 30 per cent digital revenue market share by financial year 2025, as part of the company’s push to see new entrants in the market.”
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He continues by stating, “We’ll do this with a transformation of our entire wagering ecosystem, including new products for punters, a reinvigoration of Sky Racing that will include a greater integration with TAB and the implementation of our new marketing strategy.”
Rytenskild says that Tabcorp was able to retain its market share despite Betr entering the market. He also claimed that Betr used “highly distortionary promotional offers. For example, the company offered 100 to-1 odds on every runner during the Melbourne Cup, provided the bet was $10 or under.
What’s interesting about this shift in focus is that Tabcorp has been very critical of online sportsbooks in the past. They’ve also called for an overhaul of regulations, including creating policies to back in-store betting over mobile gambling. The shift shows that even Tabcorp cannot ignore the shift toward mobile betting.
Tabcorp Plans to Cut Spending Over Next Three Years
One final point made during the report that could impact jobs is the announcement that Tabcorp will cut expenses. According to the report, the company plans to cut spending by $20 million by 2026. The details of this plan were not revealed, but one can assume that this will impact jobs at some point.
This could also be a direct result of the company increasing its online footprint. As players move toward online gambling, the focus on live betting diminishes, along with expenses related to that venue. Only time will tell how large of an impact those cuts will have on jobs at Tabcorp.
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