The bitter war between Tabcorp and corporate bookmakers has intensified.
Tabcorp’s returns to the racing industry have plummeted by a staggering $90 million in yet another stark illustration that Australia’s betting landscape is in the midst of a seismic shift.
The betting giant last week released its annual report for fiscal 2022 revealing returns to the three racing codes amounting to $946.5 million.
That figure is the lowest since 2018 and represents a decrease of $90 million from the $1.036 billion returned to the industry in fiscal year 2021.
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Adding to the woes was a year-over-year drop in gambling revenue of $1.96 billion to $1.73 billion.
The 12 per cent drop comes at a time when rival operators have been reporting exponential growth that began during the Covid-fueled gambling boom.
Detailing the results, Tabcorp stated that retail store closures during the first half of fiscal 2022 were the main catalyst for the drop in revenue.
Tabcorp CEO Adam Rytenskild. Image: John Feder
But in a strategic update to investors, Tabcorp said the next 12 months “will have a clear focus on growing our customer base and creating products and experiences customers love” with a “new customer-focused strategy that Take advantage of our unique combination of digital and retail technology.” and media, now in execution”.
In recent months, Tabcorp has run a sizeable media campaign through the newly formed Aussie Fair Play Coalition, calling on foreign-owned corporate bookmakers to pay higher taxes.
The calls come at a time when Tabcorp’s market share continues to be eroded by the corporate betting sector led by Paddy Power-owned Sportsbet and Entain-owned Ladbrokes.
Following the release of Tabcorp’s Annual Report last week, Justin Madden, CEO of Responsible Gambling Australia (RWA), said Tabcorp’s continued claims that they pay double the tax rate of corporate bookmakers are misleading. .
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“Tabcorp paid 56 cents on every dollar of revenue in taxes,” Madden said.
“RWA-represented bookmakers pay 51 cents on the dollar in Australian tax. If Tabcorp’s management thinks 56 cents is double 51 cents, then it’s no wonder the business is in so much trouble.
“For just an extra five cents on the dollar, Tabcorp receives billions of dollars in exclusive monopoly rights on retail and tote bets that are supposed to support Australian racing.
“How terrible this is for the industry is laid bare in Tabcorp’s results. Their returns to racing are down $90 million and they have now announced that their exclusive retail business is not on management’s list of priorities.
“Tabcorp believes they should retain billions in exclusive monopoly rights without paying for them or investing in their growth.”
In response, Tabcorp disputed Responsible Wagering Australia’s claim that it paid 56 cents on the dollar, stating that the $1.5 billion it paid in industry taxes and fees was equal to 65 cents on the dollar.
A Tabcorp spokesman said on Monday: “Tabcorp is proud to have provided more funding to the racing industry than any other betting operator.”
“In contrast, foreign-owned online bookmakers sent more than $500 million in profits abroad last year alone and are opposed to pouring more money into the local racing industry,” he said.
“Why are foreign-owned online sportsbooks so averse to paying their fair share of betting taxes and fees to ensure a sustainable racing industry for punters and participants?
“Tabcorp will always proudly pay its fair share of gambling taxes and fees. For too long, Tabcorp has paid up to double the taxes and betting fees because foreign-owned online bookmakers object to paying their fair share of taxes.
“This story again highlights that foreign-owned online bookmakers want to continue to change the racing industry.”
Racing at Royal Randwick (Photo by Mark Evans/Getty Images)
The bitterness between Tabcorp and corporate bookmakers has never been greater.
Tabcorp CEO Adam Rytenskild hailed recent point-of-use tax rate increases in Queensland and New South Wales as a “positive step in leveling the playing field” adding that “online bookmakers will pay more of the tax on gambling that can be invested. get back to the local racing industry and ensure a fairer system.”
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When the NSW government announced point-of-use tax increases, it detailed significant transition payments to Tabcorp over an 18-month period to ensure it was “not made worse off” as a result of the increase.
As part of the Queensland announcement, Tabcorp has ceased legal proceedings with Racing Queensland, ending a long-running dispute over Point of Use tax payments that began in 2018.
Tabcorp has agreed to pay Racing Queensland $150 million in exchange for an extension of its ongoing exclusive and total retail deals in the state.
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