Entain and Tabcorp Fighting It Out For WA TAB
The race to take over Western Australia’s TAB is heating up, with WA selecting the shortlist for the second and binding bidding phase of the WA TAB auction. Entain and Tabcorp lead the way but industry experts give Tabcorp a slight advantage.
Tabcorp holds retail betting licences the length and breadth of the country. Regulators know exactly what the company brings to the table. In addition, it is aware of any shortcomings. It is often better the devil you know than the devil you do not in that respect.
Entain has plenty of feathers in its cap and is a serious contender. It is the parent company of Ladbrokes in addition to Neds. Furthermore, Entain is a major player in local racing and has the backing of a massive offshore parent. Only working in regulated markets works in Entain’s favour, too. It recently pulled out of Russia and is dedicated to leaving all grey markets in the next 18-24 months.
Well-known Matthew Tripp is also in the running for WA TAB. Tripp is a familiar face in Australian bookmaking circles. He has counters, oddsmakers, and VIP sales staffers. However, Tripp lacks a major outlet for all those staff; that works against him in the WA TAB bidding war. News Corp and Tripp are in talks to launch FOX Bet’s Australian betting firm.
Tabcorp Interest in WA TAB Comes at a Strange Time
It is easy to see why Tabcorp is interested in WA TAB business but its interest comes at a strange time. Early July saw Tabcorp announce its intention to split its business into two separate entities. Previously, it planned to sell its media and gaming businesses. Ironically, Entain wants the media and gaming business and offered $3 billion for it in May. Tabcorp rejected Entain’s approach. The pair now go head-to-head for WA TAB business.
Tabcorp is struggling to keep up with competitors in the sports betting world. It has a significant online presence but derives most of its profit from retail venues. This means COVID-19 related closures hit the company hard. Getting its hands on WA TAB diversifies the company’s income streams.
Tabcorp Shares Rise Following Positive Non-Betting Results
Tabcorp released its latest financial figures to the Australian Securities Exchange (ASX). They are marked as H1 2022 because of how the company does its accounting. Group revenues increased 2.2% to $2.934 billion. Net profit after tax fell 5.4% to $175 million, which is an incredible result all things considered.
Wagering and Media revenues fell 9.8% to $1.073 billion resulting from enforced closures. Tabcorp revealed it lost 102 trading days during the reporting period, almost a third of the year. This results in a 36% decline in retail turnover. Having WA TAB would have helped negate this reduction.
Sports betting fell but a sharp rise in lotteries and keno put shareholders in a buoyant mood. Revenues from lotteries and keno increased an impressive 10.9% and produced record figures. CEO David Attenborough, a key figure in the takeover of WA TAB, is delighted with the division’s performance.
“The record result from the Lotteries & Keno business again showcased the broad appeal of the business’ much-loved products and brand, and the success of its omni-channel strategy.”
When Is The Auction Taking Place?
The State Government recommended selling WA TAB to secure the long-term future of the state’s racing industry. Potential suitors had until November 16, 2021, to register their interest. That date is long gone and the shortlist produced.
The next stage sees the bidding process begin, with late 2022 the rough date the new operator takes over.
Speaking of the WA TAB sale, Racing and Gaming Minister Reece Whitby had this to say.
“Western Australian racing is an important industry, and the McGowan Government is working to ensure its sustainability and prosperity into the future. We will continue to engage with all stakeholders and build upon the considerable work undertaken to date to provide certainty to all parties towards the end of 2022.”
