Since the demerger of its lotteries business to concentrate on its wagering business, Tabcorp (ASX: TAH) has made further strides in its restructure with the sale of its eBet business for $62 million, no longer seeing value in its loyalty and tracking systems.
Generating EBITDA of $4.4 million and an EBIT loss of $2 million in FY22, eBet provides tech to gaming venues in Victoria and New South Wales. These systems assist venues drive their customer loyalty programs, in essence assisting them to directly market to gamblers and incentivising them to gamble more.
Having spent the last decade focusing on their in-venue operations while corporate bookmakers used digital-only operations to entice punters with lower overhead expenses, Tabcorp is far from the wagering giant they once were. No longer having their operational expenses subsidies by The Lottery Corporation (ASX: TLC) which demerged in May 2022, Tabcorp is going it alone, with a renewed focus on its digital offerings.
As part of those plans, eBet is no longer a required asset where the $62 million cash sale to Venue Digital Technology will strengthen Tabcorp’s balance sheet.
Upon settlement, the sale is expected to provide Tabcorp with a pre-tax windfall of $39 million.
The sale had previously been flagged by Tabcorp CEO Adam Rytenskild, who moved quickly to finalise the sale after referencing its possibility in Tabcorp’s FY22 presentation to investors.
“We’ve made an urgent start to transform Tabcorp into a competitive and growing business,” said Rytenskild at the time.
“We have a clear strategy and a focused ambition to grow our customer base. The hero metric for everyone in the Company is digital revenue market share, without exception.
“I’m determined for us to be different and to be totally obsessed with creating products and experiences that Australia loves.”
Tabcorps continuing operations (TLC removed) reported $2.18 billion in revenue for FY22 which was a 5.1% decline. EBITDA was hit much harder with a 26.1% decline to $306 million. These results continued an ongoing trend for Tabcorp’s archaic wagering division, thus a driving factor behind the lotteries demerger and need to undertake a digital transformation
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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