Australian gambling operator Tabcorp is making some major changes in the management of its betting business following the announcement of the departure of the company’s chairman and chief executive officer and an AU$1-billion write-down of the unit.
So far, the gambling giant has not revealed the person set to replace the wagering division’s executive general manager, Andy Wright. His departure was officially announced by Tabcorp on July 24th, only a day after the gambling company revealed the retirement of David Attenborough, its long-time chief executive officer, in the first half of 2021 and the departure of Paula Dwyer, the operator’s chairman, at the end of December.
The shake-up came after several major investors called for some management changes in Tabcorp amid the growing concern over the company’s performance, and especially its betting business, following the AU$11-billion merger with the Tatts Group that was carried out in 2017. In a note to Tabcorp’s racing industry partners, the group’s managing director of the wagering unit, Adam Rytenskild, said that it was the right time for some changes to the leadership team of his division, provided the crucial point that was for the company.
Mr Rytenskild, who is considered one of the frontrunners for the CEO position, further noted that community expectations for the way Tabcorp operated continued to grow, so he believed it was critical that the business provided a strong, efficient and sustainable base to meet the aforementioned demands.
Tabcorp Also Unveils AU$1-Billion Write-Down in the Betting Unit
A week ago, Tabcorp revealed that it intends to write down the goodwill value of its betting division by one-third (no less than AU$1 billion) and justified these actions with the negative impact that the coronavirus pandemic had on the business and the competition of some other bookmakers operating in the sector, including Ladbrokes, SportsBet and BetEasy.
Before the Covid-19 infection outbreak, the 400-TAB betting shops network and the TAB terminals hosted by 4,000 pubs and clubs accounted for about 45% of Tabcorp’s overall betting turnover. However, these venues were forced to cease operation because of the coronavirus pandemic, which also affected sports betting to a much larger scale because of the cancellation and postponement of major sporting leagues.
As explained by the Australian gambling giant, the planned write-down reflected the possible acceleration of uncertainty and retail contraction in regard to the pandemic’s possible impacts on the sector in the longer term. Tabcorp also shared that the massive shift to online gambling also had to be taken into account.
For now, the gambling group has unveiled expectations for its full-year EBITDA in the range from AU$990 million to AU$1 billion, which is about 4% ahead of the market consensus. The company is expected to announce its annual earnings on August 19th. Some analysts, however, shared that it remained unclear whether the projection came as a result of an improvement in the business’ performance or it was boosted by government support.
Some market experts, such as David Fabris, who is an analyst for Macquarie, said that the upcoming structural challenges within the betting and media divisions have been found concerning, especially when taking the growing popularity of online gambling into account.
- Author
Olivia Cole
