Tabcorp has reported a return to profit in FY25, driven by stronger performance across its wagering and media divisions.

The announcement lands at a time when gambling regulation is firmly in the spotlight in Australia, with fresh calls for tighter rules and national reform gaining traction. 

The group owns some of the country’s most recognisable brands, including the TAB retail and online sportsbook, the MAX Gaming B2B solutions firm, and the Sky Racing media outlet.

Financial turnaround

Revenue for the 12 months to 30 June rose 11.8% to AUS$2.6bn (£1.35bn), while statutory net profit after tax was $36.6m, a sharp reversal from the $1.4bn loss reported a year earlier. On an underlying basis, NPAT climbed 76.8% to $49.5m and EBITDA lifted 23.2% to $391.5m.

The new Victorian Wagering and Betting Licence added an estimated $83.7m EBITDA benefit over 10 months. Operating expenses before significant items increased 13.6% to $697.2m, though after stripping out one-offs the rise was just 0.5%. Cost savings of $38.8m were also achieved.

Meanwhile, capex fell 23.6% to $115.2m, leverage eased to 1.6x net debt/EBITDA, while cashflow conversion remained strong at 99%. Gillon McLachlan, Tabcorp’s Managing Director and CEO, asserted that the firm has become a ‘fitter’ company over the past 12 months.

“When I joined Tabcorp I said I was drawn to the value that can be unlocked within our unique set of strategic assets, but to do that we needed to get fit,” he said.

“Today we are a fitter business. A business with an improved cadence, a simpler, more cost-effective operating model and an improved culture of cost and capital discipline. We have a clear strategy and clear lines of accountability that are allowing us to execute on a bolder strategic plan.”

Operational highlights

Wagering and Media was the standout, delivering $2.4bn in revenue (up 12.8%) and $329.1m EBITDA (up 31%). Wagering turnover grew strongly, with cash net revenue up 17.5% to $965.7m and digital up 16% to $1bn. 

New products such as TAB Takeover and TAB Time proved popular, typically selling out within minutes, the company asserted, while the TAB app expanded to multiple languages.

“Today’s pleasing results are the outcome of creating a fitter company,” McLachlan remarked. “We have increased our wagering and media capability at the leadership level, developed a simpler, more cost-effective operating model and are operating with a bias for action and increased accountability.

“We have an evolved strategy with a broader focus on unlocking the value that lies within our unique asset base. We have commenced executing the strategy, including the creation of a structurally profitable retail business that will in time increase patronage to pubs and clubs with a true omnichannel offering.”

Furthermore, MAX, Tabcorp’s integrity services business, reported $175.8m in revenue (down 0.2%) and $62.4m EBITDA (down by 6.2%). Adjusting for the sale of MAX Performance Solutions, revenue was up 7.6% and EBITDA up 5.8%. 

The division continues to oversee the nation’s largest EGM monitoring network, covering 126,970 machines across New South Wales, Queensland, Tasmania and the Northern Territory. 

Internationally, the group reported that Sky Racing World in the US and Premier Gateway International on the Isle of Man remain important distribution hubs for global racing content.

Reform pressure builds

The results come in during a period of heightened scrutiny for the sector. Australia regulates gambling on a state-by-state basis, with regulators such as Liquor and Gaming NSW and the Victorian Gambling and Casino Control Commission in key roles.

But federal involvement is again on the table. The late MP Peta Murphy’s report called for sweeping reforms, including a national gambling regulator, tougher rules on advertising and a coordinated harm reduction strategy. 

Those proposals were shelved during the election, but Labor’s re-election with a large majority has renewed speculation that action is on the horizon. The government is also facing pressure from MPs and gambling harm treatment charities to make good on Murphy’s recommendations.

Tabcorp has responded by highlighting its safer gambling and sustainability measures. In FY25, interventions for at-risk players rose 38% year-on-year, while the group contributed $2.4bn back to governments, industry partners and community causes.

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