Tabcorp Reports Profit Drop Due to Sun Bets Launch
Australia’s leading wagering company, Tabcorp, has reported a 49 percent drop in annual profits to AU$169.7 million, which it has largely attributed to costs of the launch of its new online wagering business in the UK, Sun Bets. Despite this, the company is expecting a boost from their new UK venture, together with their new TAB app.
Sun Bets launched this week in time for the start of the English Premier League season. Tabcorp reported AU$14.4 million in expenditure setting up the business with News Corp’s UK division. In addition, Tabcorp reported it spent AU$13.6 million in legal costs for its defense against allegations by Australia’s anti-money laundering regulator, AUSTRAC.
Excluding the one-off expenses, Tabcorp saw an 8.5 percent increase in annual underlying profits, which it attributed primarily to its strong keno business and growing digital wagering division. The company is expecting the Sun Bets business to contribute significantly to its business success.
“Recent initiatives such as the proposed acquisition of Intecq and the launch of Sun Bets further strengthen and diversify our operations,” commented David Attenborough, chief executive of Tabcorp.
“Sun Bets is an exciting opportunity for Tabcorp to take its market leading wagering capabilities into the AU$7 billion UK online gambling market.”
While Tabcorp has not intimated what it expects revenue or earnings from Sun Bets to be, Mr Attenborough did say that the business will only need to capture 1.5 percent of market share in order to break even.
The release of Tabcorp’s new TAB app, in time for the Spring racing carnival and NRL and AFL finals, is also expected to boost their growth in the coming year. The company’s mobile platform represents 65 percent of turnover for the company.
March 23, 2017