Adam Rytenskild, the new Chief Executive of a transformed Tabcorp Holdings, has outlined his determination to revitalise the heritage operator’s online sportsbook performance.
Speaking to the Australian Financial Review (AFR.com), Rytenskild admitted that the ASX group’s flagship TAB sportsbook property had fallen behind the ‘nimble competitors’ of Sportsbet AU (Flutter Entertainment) and Ladbrokes Australia (Entain Plc).
Rytenskild stated that TAB’s performance had been a casualty of Tabcorp’s AUS $11 billion merger with Tatts Group, which failed to meet shareholders’ expectations and led to a subsequent demerger of the group’s lottery and wagering units.
“We haven’t been able to get product out for a couple of years,” Rytenskild explained. “The operating model in Tabcorp just didn’t support that innovation. We’re able to free ourselves up going forward, which is great.”
Having executed Tabcorp’s demerger, Rytenskild has moved to prioritise transforming TAB’s digital offering, in which plans have been accelerated to launch ‘a new betting app in time for the Spring races’ – Australia’s peak wagering season.
Digital upgrades will be supported by a fresh investment of AUS $150 million (€100m), secured from new investors in a streamlined Tabcorp.
Despite its transformation, a new-look Tabcorp has garnered negative assessments from private equity funds Blackstone and State Street, which sold shares in Tabcorp – “a company that faces structural challenges, saddled with higher costs and an eroding competitive position compared to its more nimble online-only rivals”.
Rytenskild remained upbeat, outlining that a smaller cap Tabcorp had secured interest from diverse funds seeking to invest long-term in the firm’s prospects to regain its position as Australia’s leading mass-market sportsbook.
Tabcorp’s ambitions have been bolstered by the recent announcement that New South Wales will increase its point of consumption tax to 15% – a decision that sees Australia’s six states level the playing field of POC tax exposure – in which Tabcorp has been burdened as the market’s highest paying tax incumbent.