Company Reports

Tabcorp's fiscal 2026 underlying EBITDA was AUD 432 million, up 10% on last year. Wagering turnover improved about 1%, buoyed by the FIFA World Cup at the end of the year. Earnings lifted on a full year of the new Victorian wagering license, reworked pub and club deals, and tight cost control.

We expect Tabcorp to remain unparalleled in physical wagering. Stringent regulatory licensing requirements create barriers to entry to compete with Tabcorp's retail locations, such as racing venues, pubs, and TAB agencies. However, the pari-mutuel model is in decline as punters increasingly choose fixed-odds betting, and technological change means geographic exclusivity no longer translates to a monopoly.

We expect Tabcorp to remain unparalleled in physical wagering. Stringent regulatory licensing requirements create barriers to entry to compete with Tabcorp's retail locations, such as racing venues, pubs, and TAB agencies. However, the pari-mutuel model is in decline as punters increasingly choose fixed-odds betting, and technological change means geographic exclusivity no longer translates to a monopoly.

Tabcorp shares fell 23% after the regulator, Austrac, commenced an investigation into its compliance with anti-money laundering and terrorism financing obligations, noting "serious concerns" about Tabcorp's ability to effectively identify, mitigate, and manage risks. Further details are scant.

We expect Tabcorp to remain unparalleled in physical wagering. Stringent regulatory licensing requirements create barriers to entry to compete with Tabcorp's retail locations, such as racing venues, pubs, and TAB agencies. However, the pari-mutuel model is in decline as punters increasingly choose fixed-odds betting, and technological change means geographic exclusivity no longer translates to a monopoly.

Tabcorp's first-half fiscal 2026 underlying EBITDA rose 14% to AUD 217 million, largely from annualized cost reductions. Revenue grew a modest 1% to AUD 1.3 billion, with a first full half contribution from the Victorian wagering license offsetting below-average yields. Shares closed 24% higher.

The latest quarterly results from Flutter (which owns Sportsbet) and Entain (Ladbrokes), Tabcorp's key competitors, show that tough operating conditions in Australia are persisting. Both companies are experiencing declining net gaming revenue in the region.

Tabcorp's fiscal 2025 underlying EBITDA grew 23% to AUD 392 million, primarily from the new Victorian wagering license starting early in the year. Shares closed up 24% on the result.

We expect Tabcorp to remain unparalleled in physical wagering. Stringent regulatory licensing requirements create barriers to entry to compete with Tabcorp's retail locations, such as racing venues, pubs, and TAB agencies. However, the pari-mutuel model is in decline as punters increasingly choose fixed-odds betting, and technological change means geographic exclusivity no longer translates to a monopoly.

Tabcorp's Australian rivals, Flutter Entertainment (owner of Sportsbet) and Entain (owner of Ladbrokes), both reported earnings to June 2025. Australia was Entain's worst-performing region in the first half, with revenue 7% lower than last year. Flutter noted challenging conditions in Australia.

With tariff rates raised to levels not seen in a century, US President Donald Trump's "liberation day" has rattled global markets. Higher tariffs will likely set in motion a cascade of supply-demand side shocks, all acting to weigh on the rate of economic growth.

Tabcorp reported interim 2025 EBITDA of AUD 190 million, 12% higher than the same period last year. Earnings from the new Victorian license came online during the period, more than offsetting soft wagering conditions.

We expect Tabcorp will remain unparalleled in physical wagering. Stringent regulatory licensing requirements create barriers to entry to compete with Tabcorp's retail locations, such as racing venues, pubs, and TAB agencies. However, the pari-mutuel model is in decline as punters increasingly choose fixed-odds betting, and technological change means geographic exclusivity no longer translates to a monopoly.

The Australian government's proposed gambling advertising restrictions have stalled in parliament, prolonging uncertainty in an already challenged wagering market. The big sports betting players such as Tabcorp, Sportsbet, and Ladbrokes, are notoriously big advertisers.

We lower our Tabcorp fair value estimate 14% to AUD 0.90. The cut principally reflects higher costs, as previously anticipated savings won’t come, and ongoing wagering market weakness. Underlying fiscal 2024 EBITDA fell 19% to AUD 318 million—about 4% below our prior forecast. There were AUD 1.7 billion in abnormal expenses excluded from the underlying result, most of it AUD 1.5 billion in noncash impairments to wagering licenses and goodwill. This reflects slower-than-expected recovery in wagering market, tightening regulation, and cost inflation that looks permanent. Other one-off costs relate to the Genesis transformation project, the new Victorian license, and demerger and divestment costs.

We expect Tabcorp will remain unparalleled in physical wagering—stringent regulatory licensing requirements create barriers to entry to compete with Tabcorp's retail locations, such as racing venues, pubs, and TAB agencies. However, the pari-mutuel model is in decline as punters increasingly choose fixed-odds betting, and technological change means geographic exclusivity no longer translates to a monopoly.

Gillon McLachlan, former CEO of the Australian Football League, is set to take the reins at Tabcorp from August 2024 following the abrupt departure of Adam Rytenskild in March. Fundamentally, we think this changes little for Tabcorp. Rytenskild’s departure was due to personal behavior, not mismanagement, and we don’t expect a major change in the general strategy. This has been broadly echoed by McLachlan’s remarks, focusing on delivering growth opportunities amid the company’s continued transformation.

The abrupt resignation of Tabcorp CEO Adam Rytenskild has no impact on our outlook. The resignation, effective immediately, comes amid a probe into an allegation of inappropriate and offensive language used in the workplace. But we think the company’s fundamentals remain intact. The departure is due to personal behavior, rather than mismanagement. We make no changes to our AUD 1.05 per share fair value estimate. Shares screen as undervalued. We think the market is overly concerned about the abrupt departure, which is unrelated to business performance, and the near-term cyclical weakness facing the wagering industry.

Australian wagering volume is still coming off the boil after spiking during the pandemic. Tabcorp’s first-half fiscal 2024 EBIT fell 32% on the previous corresponding period, with operating deleverage magnifying the 5% slide in revenue. Wagering has historically proved resilient through the economic cycle, but this slowdown is shaping up to be more severe than originally anticipated. Accordingly, we lower our fiscal 2024 revenue forecast by 5% to AUD 2.3 billion, which brings down our underlying EBIT forecast 9% to AUD 105 million, a 30% fall from fiscal 2023.

We expect Tabcorp will remain unparalleled in physical wagering—stringent regulatory licensing requirements create barriers to entry to compete with Tabcorp's retail locations, such as racing venues, pubs, and TAB agencies. However, the pari-mutuel model is in decline as punters increasingly choose fixed-odds betting, and technological change means geographic exclusivity no longer translates to a monopoly.