While thousands of pubs and clubs have joined Tabcorp in the overhaul of its retail network, many are concerned about their liability and profitability and several of the largest pub groups are yet to be convinced.
At the culmination of FY24 Tabcorp (ASX:TAH) posted a loss of more than $1.4 billion.
Mid-2025 new chief executive Gillon McLachlan subsequently announced a shake-up of the company’s retail wagering business billed as their biggest change in decades, in a fundamental pivot for retail wagering as it faced a shifting market, online. The CEO voiced major structural challenges while offering that “it’s not just us that needs a change”.
The main point of difference for the Australian betting giant is its expensive licences giving it the exclusive right to offer physical betting terminals inside pubs and clubs, amounting to market advantage over online bookmakers such as the UK’s Entain, which owns Ladbrokes, and the NYSE-listed Flutter Entertainment, operator of Sportsbet.
Under the new plan, pubs and clubs would be charged for Tabcorp terminals – reversing the practise of paying venues daily fees for hosting the terminals, and hosts would be paid commission based on weekly turnover and no longer be paid commission for new customer sign-ups.
At the same time, the company would fund renovations at sites around the country, installing attractions such as TV walls and betting areas with tablet devices, and it lauded new in-venue products offering customers special promotions and custom odds on key events, through TAB Time and TAB Takeover.
There was immediate push-back, with smaller operators concerned they would be worse off under the new arrangement. Racing NSW’s distribution agreement with Tabcorp allows it to intervene if it believes a change will affect revenue, and some operators appealed to the organisation’s CEO, Peter V’landys.
In its drive to convert venues Tabcorp was offering publicans tickets to key events, including the State of Origin, and some were flown to New York for demonstrations.
Deadline to sign for the new deal was 1 July, finding 3,300 retail venues reported as operating on the network, which is said to be resulting in up to 96 per cent of the total turnover generated under the prior contract.
Another win saw the company get approval from the Victorian and NSW regulators to roll out live betting ‘pucks’ allowing patrons to place bets during live sport and racing events, facilitated by tapping their phones on the device.
Tabcorp chief commercial officer Jarrod Villani cites double-digit turnover growth under the new model, which was backed up by the company’s half-year results, reporting in-venue turnover up 12 per cent.
Villani has stated the new approach is about shared experience and getting more people into venues.
“We are evolving and innovating the customer experience and punters are going to see further step changes over the next year.”
However, the reported total is 400 fewer venues than were under the old agreement, even as it includes three major operators that have not signed the deals but continue to be counted as they continue to operate betting terminals and Sky Racing.
Endeavour Group’s ALH Hotels, with close to 300 pubs under the expired agreement, is thought to be in discussions with the gaming company and told PubTIC it has no comment on the situation.
Laundy Hotels, with more than 25 TAB venues, also says it declines to comment at this stage.
A major sticking point for some is a change in Tabcorp’s contract that would see pubs and clubs foot the bill for its regulatory fines in the future.
This is thought to be a crucial aspect for Australian Venue Co, which counts 108 TAB venues.
Taking a tougher stance, Comiskey Group, operating mega-venues the Eatons Hill Hotel and Sandstone Point Hotel, has flat out rejected the new contracts and removed the terminals.
Principal Rob Comiskey said on Instagram “TAB not a fair bet for hotels”.
And McGuires Hotels, also based in Queensland, has terminated its agreements with Tabcorp at four of its 11 venues on the basis that the deals ‘did not make commercial sense’.
Overall, McLachlan’s strategies showed promise to turn around the floundering whale and the TAH share price nearly doubled, reaching $1.17 per security in May – until AUSTRAC announced an investigation based in concerns about Tabcorp’s ability to identify and prevent money laundering (AML) and manage risks relating to terrorism financing (CTF).
Following a plunge in the latter half of May, Tabcorp’s share price remains stable, closing today down 29 per cent on the recent high, at $0.83.
