Tabcorp appoints ex-AFL chief McLachlan as CEO
McLachlan will join Tabcorp and assume the role of CEO on 5 August, subject to necessary regulatory approvals.
He takes up the position after a decade leading Australian rules football competition the AFL. As CEO, McLachlan oversaw the expansion of the league to 18 teams, while revenue more than doubled to AU$1.06bn (£553.4m/€655.6m/US$701.8m) during his time in charge.
McLachlan replaces for Adam Rytenskild, who resigned in March over allegations of using “inappropriate and offensive” language in the workplace. Rytenskild had led Tabcorp as CEO and MD since May 2022.
Chairman Bruce Akhurst took on additional duties as executive chairman while Tabcorp sought a replacement. Akhurst will continue with this until McLachlan officially takes over in August.
“Gill needs no introduction,” Akhurst said. “He is recognised as one of Australia’s leading CEOs and securing Gill is a great vote of confidence for Tabcorp’s future. We’ve laid strong foundations; Gill brings a growth mindset and the capability to capitalise on the opportunities ahead of us.
“Importantly for us, Gill brings an added dimension of having been responsible for some of the most significant media rights deals in Australian sports history. We’re excited about the potential growth opportunities for our wagering and media business under his leadership.”
McLachlan talks up “enormous opportunities” at Tabcorp
Speaking about his appointment, McLachlan said he will focus on accelerating the growth of Tabcorp. He also talked up its omnichannel entertainment offering across digital, retail and the media business.
“Tabcorp is a wagering, broadcast and integrity services business and the challenges of growing it are appealing,” McLachlan said. “Tabcorp is a proudly Australian company that contributed $1.10bn to the racing industry last year and continues to be one of the racing industry’s biggest partners, as well as the wagering licensee in all states, except for WA.
“This is a really important component of my decision. There are enormous opportunities ahead and I’m looking forward to driving the sport category among other things.
“Tabcorp is part way through its transformation journey. I’m looking forward to working with the leadership team to accelerate and deliver on the growth opportunities.”
Akhurst added: “In the two years since demerger we have significantly improved our customer offering and delivered key structural reforms in Queensland and Victoria. The transformation of Tabcorp is not complete and I am delighted that Gill is joining us to continue to drive change and growth.”
Tabcorp seeking to improve on H1 performance
McLachlan will take the reigns at Tabcorp after a tricky H1 for the group. In the six months to 31 December, revenue declined 5.1% to AU$1.21bn, with a decline across both core businesses.
Wagering and media revenue fell 4.2% to $1.12bn, reflecting a drop in the overall wagering market. Also in this segment, revenue from the Media and International business declined 5.4%.
In terms of gaming services, revenue was down 14.5% to $93.0m. Tabcorp said this reflected the impact of the sale of eBet and Max Performance Solutions.
Then there was the issue of higher expense, with the main sticking point being $852.0m in impairment charges. This, coupled with lower revenue, resulted in a $641.7m net loss, a contrast to a $53.2m net profit in the previous year. EBITDA was also down 34.7% to $131.7m.
There was, however, some good news out of H1. In September, Tabcorp resolved a tax dispute with the Australian Taxation Office, with the business set to receive an $83m tax refund.
Regulatory matters: good and bad
Tabcorp has also seen its fair share of regulatory issues in the past year or so. The most recent was just last week when it was ordered to pay $370,417 in Victoria after pleading guilty to 43 charges for failing to prevent a minor from gambling.
The order is the latest action Victoria authorities have taken over underage gambling and failing to monitor electronic betting terminals (EBTs). In September, the Victoria Gambling and Casino Control Commission (VGCCC) charged Tabcorp and several venues for underage gambling. Breaches took place during the period between September 2022 and October 2023.
It was previously stated that Tabcorp faces a total of 72 charges. If found guilty, the operators face a maximum collective fine of over $1.0m. Tabcorp’s fine could amount to $969,236.
The case has also led to Tabcorp facing other measures in Victoria. In January, the VGCCC ordered Tabcorp to make most of its EBTs in the state cashless. This was in direct response to incidents of underage gambling.
Away from the underage gambling case, the VGCCC also fined Tabcorp a record $1.0m over its conduct during a major system outage in 2020. Tabcorp’s Wagering and Betting System went down on 7 November 2020, during that year’s Spring Racing Carnival.
On the flip side, Tabcorp in December was awarded exclusive rights to offer wagering and betting in Victoria for the next 20 years. Tabcorp’s licence period commences in August 2024, immediately after its current exclusive licence expires.
In addition, last week the New South Wales (NSW) government announced it will consider a proposal from Tabcorp to increase point of consumption tax (POCT) in the state to 20%.
Wagering operators in NSW currently pay POCT at a rate of 15%. Tabcorp is proposing the government implements a rise to bring NSW in line with other states that charge 20%.
The Tabcorp proposal also features other points related to reforming legislative and licence requirements for wagering. These include a requirement to enter an agreement with the racing industry and 10% shareholder cap. The government will also consider these as part of wider, potential reforms in NSW.