Tabcorp closes product gap on competitors as 2023 EBITDA climbs 8%

Australian wagering giant Tabcorp has experienced a near 5% surge in its stock value after unveiling robust results for the financial year 2023 (12 months ended 30 June 2023).

The company’s revenue reached A$2.4bn, showing a 2% increase compared to the financial year 2022.

Notably, the group’s EBITDA rose to A$391m, marking an 8% rise on financial year 2022. EBIT soared by a remarkable 103% to A$150m.

Tabcorp MD and CEO Adam Rytenskild stated: “We are the only one of the large wagering operators in the Australian market to increase revenue and EBITDA in FY23.”

Revenue breakdown

Tabcorp operates within two primary business segments: the wagering and media division, and the gaming services division, which provides electronic gaming machine monitoring and integrity services across Australia.

The wagering and media division achieved A$2.2bn in revenue, reflecting a 2% year-on-year increase.

EBITDA in this division witnessed a 7.3% increase, amounting to $308m compared to the financial year 2022.

Tabcorp also emphasised its improved digital offering. The company observed a 3% increase in digital active TAB account customers, setting a new record of 805,000.

The gaming services division reported a 3% year-on-year increase in revenue to $204m.

EBITDA in this segment also saw a significant rise of 13% to $83m as the division recovered from the negative impacts of Covid-19.

While TAB’s total market share by revenue grew to 34.6% from the previous year’s 33.6%, market share for digital slightly declined from 24.9% to 24.5%.

Nevertheless, Rytenskild remained optimistic and said: “Our total revenue market share grew, highlighting the strength of our wagering ecosystem.

“Despite a distorted market which included the introduction of an aggressive new operator and increased generosity and marketing spend by competitors, our digital revenue share remained relatively stable, highlighting the strength of our new products.”

He added: “TAB is a very different business today, compared to a year ago. We’re delivering on what we promised. Not only has the new TAB app been launched, we’ve followed up with 10 new product launches as we rapidly increase speed to market.

“Closing the product gap has been critical to the strong increase in active customers and our product team can now pivot from catching up to becoming a market leader for product innovation.”

2025 strategy

Earlier this year, Tabcorp revealed plans for its TAB25 strategy, outlining its business objectives and KPI targets up to the financial year 2025.

One of the goals is to achieve 30% of online betting market share by revenue in Australia, alongside a comprehensive transformation of the wagering ecosystem through the introduction of new products and a fresh marketing strategy.

“We will continue to invest for sustainable long term growth including rebranding TAB to a fresher, younger more innovative brand,” said Rytenskild.

“Our new marketing campaign and branding is now live and will play an important role as we look to grow our customer base in sports betting,” he added.

With a renewed focus on sports, horse racing will continue to be the bedrock of the company’s operations, according to Rytenskild.

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