Online bookies put squeeze on Tatts, Tabcorp
Earlier, Tatts' wagering rival, Tabcorp, pushed the case for regulation of the sector to counter the unfair advantage corporate bookmakers enjoyed in states and territories that have loose regulation and more favourable tax regimes.
Tatts reported that first-quarter earnings after tax from its continuing operations were up 23 per cent year on year.
Chief executive Robbie Cooke said the group also had a "positive" outlook for the second quarter but said it would not mirror the strong first quarter as the company would be cycling tough comparable figures from the previous December quarter when it enjoyed an exceptional run of lottery jackpots.
"Our intention is to lift our marketing, both traditional and online, and product development activities in our wagering operations ... as part of our strategy for re-energising our wagering franchise. This investment is being made to drive future growth," Mr Cooke said.
Some analysts predict a harsh future for traditional tote operators such as Tabcorp and Tatts due to the change in channel and product mix, along with the arrival of sophisticated digital competition.
Tabcorp joined the list of companies reporting soft consumer conditions at its AGM on Thursday. It told investors that group revenue was up 3.1 per cent to $503.9 million for the three months to September 30, in line with its trading performance in the second half of last year. Wagering revenue growth of 5.4 per cent came on the back of "continued strong growth in fixed odds and digital wagering".
But Tabcorp said the "softer retail consumer environment negatively impacted on the performance of its Keno business, which barely grew for the first quarter [and] the retail-only Trackside product, which grew 2.2 per cent".
Tabcorp chairwoman Paula Dwyer said that less rigorous conditions for corporate bookmakers in the Northern Territory, compared with those for wagering operators such as Tabcorp in Victoria and NSW, were adversely affecting the racing industry and the community.
In the 2012 financial year, wagering taxes collected in the NT amounted to $2 million despite turnover of more than $5.7 billion.
In comparison, Tabcorp paid $292 million in state wagering taxes in NSW and Victoria on a turnover of $10.8 billion, a proportion 77 times greater.
Frequently Asked Questions about this Article…
Tatts reported a strong growth in earnings, with first-quarter earnings after tax from its continuing operations up 23% year on year.
Tatts reported a 23% increase in first-quarter earnings after tax from its continuing operations, showcasing strong growth year on year.
Tatts plans to invest further in its wagering business, focusing on enhancing marketing and product development activities to re-energize its wagering franchise and drive future growth.
Tatts plans to invest in marketing and product development for its wagering operations to re-energize its wagering franchise and drive future growth.
Traditional tote operators are facing challenges due to changes in channel and product mix, along with the arrival of sophisticated digital competition.
Traditional tote operators are facing challenges due to changes in channel and product mix, along with the rise of sophisticated digital competition.
Tabcorp is advocating for regulation of the sector to counter the unfair advantage corporate bookmakers enjoy in states and territories with loose regulation and more favorable tax regimes.
Tabcorp is advocating for regulation of the wagering sector to address the unfair advantage that corporate bookmakers enjoy in regions with loose regulations and favorable tax regimes.
Tabcorp reported a 3.1% increase in group revenue to $503.9 million for the three months to September 30, with wagering revenue growth of 5.4% driven by strong growth in fixed odds and digital wagering.
Tabcorp reported a 3.1% increase in group revenue to $503.9 million for the three months ending September 30, with wagering revenue growing by 5.4% due to strong growth in fixed odds and digital wagering.
The softer retail consumer environment negatively impacted Tabcorp's Keno business, which barely grew, and the retail-only Trackside product, which grew by 2.2%.
The softer retail consumer environment negatively impacted Tabcorp's Keno business, which barely grew, and its retail-only Trackside product, which grew by 2.2%.
Tabcorp is concerned because the less rigorous tax conditions for corporate bookmakers in the Northern Territory are adversely affecting the racing industry and the community, as evidenced by the low wagering taxes collected compared to turnover.
In the 2012 financial year, wagering taxes collected in the Northern Territory amounted to $2 million on a turnover of over $5.7 billion, whereas Tabcorp paid $292 million in state wagering taxes in NSW and Victoria on a turnover of $10.8 billion, a proportion 77 times greater.
In the 2012 financial year, wagering taxes collected in the Northern Territory amounted to $2 million on a turnover of more than $5.7 billion, whereas Tabcorp paid $292 million in state wagering taxes in NSW and Victoria on a turnover of $10.8 billion, a proportion 77 times greater.
Tatts has a positive outlook for the second quarter, although it is not expected to mirror the strong first quarter due to tough comparable figures from the previous December quarter.
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