Australian gambling behemoth Tabcorp revealed that the introduction of online betting taxes has restored “rationally” to the betting sector of Australia and is helping it be more competitive to the rivalry of online betting operators.
The company revealed that its lotteries and keno operations helped it compensate for the lower profits generated by its bookmaker division in 2018. It also shared that the TAB and Ubet brands of the operator were forced to offer some special incentives to customers in order to keep them interested and prevent them from betting with Tabcorp’s rivals.
As explained by the company’s Chief Executive Officer David Attenborough, the implementation of the so-called point of consumption tax in the Australian Capital Territory (ACT) and the states of Victoria, New South Wales (NSW) and Western Australia at the beginning of 2019 has helped Tabcorp face the competition from online bookmakers, including Ladbrokes, Sportsbet and BetEasy.
Our CEO David Attenborough gives his view on the highlights of our 2018/19 full year results, the key achievements for the year and thanks our people pic.twitter.com/MiVdYbuvvc
— Tabcorp (@Tabcorp) August 14, 2019
Under the point of consumption tax, which has already been implemented in Queensland and South Australia, gambling losses are taxed based on where bets are placed, rather than the territory where the company’s licence is held. The thing is that the majority of online bookmakers which currently operate in Australia have their licences issued by the Northern Territory authorities. The Northern Territory, however, has been known as a low-tax destination, which basically meant that Tabcorp’s online competitors have been paying considerably lower taxes than it.
Lottery and Keno Operations Help Tabcorp Deal with Online Bookmakers’ Rivalry
Tabcorp’s boss has explained that online bookmakers had been forced to act in accordance with the new rules in order to cope with the new taxes, which on the other hand, had made his company more competitive with them.
Today, the company announced a massive increase in earnings generated by its lottery operations, saying that they helped it deliver a full-year profit in line with preliminary expectations. As revealed by Tabcorp, the largest Australian gambling operator saw an 8.7% revenue increase to AU$5.482 billion for the year which ended on June 30th, 2019. The operator’s underlying earnings rose by the staggering 42.5% to AU$397.6 million.
We released our 2018/19 results this morning – the first full year for the combined Tabcorp-Tatts group. Read more here: https://t.co/9EXQGNtZfr
— Tabcorp (@Tabcorp) August 13, 2019
The lottery division’s earnings before interest, tax, depreciation and amortisation (EBITDA) were boosted by a series of big Powerball jackpots and price increase, but the truth is that Tabcorp is still facing some pressure from its competitors.
The revenue generated by the lotteries and keno operations of Tabcorp increased by 22.8%, while its EBITDA rose by 29%, reaching AU$509 million.
Currently, the Australian gambling operator is integrating its totalisator services in South Australia, Queensland and the Northern Territory with the TAB business in the states of NSW and Victoria. Mr Attenborough explained that the integration program is delivering for the company’s shareholders and also noted that the progress helped the company keep its overall expenses flat year on year, which is actually in line with Tabcorp’s plans.