To use racing parlance, Tabcorp’s performance on the Australian Stock Exchange during 2024 most likely left long-term investors worried they may have backed the wrong horse.
In a hypothetical race between fellow ASX-listed gambling operators BlueBet and PointsBet, the formguide isn’t flattering for the once undisputed giant of Australian wagering.
Despite the arrival of Gillon McLachlan as chief executive, it was a year of setbacks for Tabcorp, reflected in a share price that in a betting vernacular turned it into an ASX ‘drifter’.
If May and July were difficult for Tabcorp investors, there was more pain to come as shares were heavily sold in August before slumping to a 52-week low in early September.
Tabcorp shares opened the trading year at 83c, but when it was announced that former boss Adam Rytenskild left on March 14, they sat at 77c.
The Fair Work Commission has since found that Rytenskild’s departure was a dismissal and not a resignation.
When McLachlan was announced as Rytenskild’s replacement, Tabcorp’s share price was 66c, but there was more pain ahead.
As McLachlan got to work in August, Tabcorp’s struggle for market share was laid bare.
After $1.4 billion worth of writedowns, mostly related to its wagering business in NSW, Tabcorp reported a $1.36 billion loss for 2023/24.
McLachlan promised a business reset and the share price tumbled to 37c.
It has since recovered ground to close at 56c on Tuesday but an almost 32 per cent fall for the year and a 31 per cent drop in market capitalisation for the same period to $1.32 billion underlines the challenges ahead for McLachlan and several key appointments to his executive team.
Besides trying to deal with a fatigued retail system and legacy deals with racing bodies - especially Racing NSW - that put Tabcorp on the backfoot against its main competitors, investors’ caution about the impact of a potential gambling advertising ban on Australia’s wagering companies will continue into 2025.
Tabcorp has backed a form of advertising ban that analysts say could work in the bookmakers’ favour.
Because Tabcorp has historical brand recognition, it is well ahead of many potential rivals for market share, making it difficult for smaller firms to take business away from the major operators if they can’t advertise.
Out of Tabcorp’s control are the macroeconomic issues that have contributed to a decline in consumer spending and a soft wagering market environment.
Economists expect that trend to continue for at least the first half of 2025, putting Tabcorp’s new strategy with McLachlan at the helm under further scrutiny.
In contrast, PointsBet’s share price rose almost 13 per cent after opening the year at 88c and ending at the close of trade on Tuesday at $1 giving it a market capitalisation of more than $330 million.
PointsBet shares fell to 43c and a 52-week low in May but this was after it instigated a Second Capital Return of $127 million, representing 39c per share to eligible shareholders after the bookmaker's sale of its United States operations.
Its share price remained steady until speculation of a $300 million takeover gathered momentum in September.
By November, the trading volume in PointsBet shares in a single session reached $7.1 million, three times the daily average.
It came after the value of the shares had more than doubled since the start of September, when they were 49c.
Warwick Barr
PointsBet’s future has often been the source of sharemarket conjecture.
It was linked to a Betr acquisition in early 2023, but that agreement never eventuated.
Stake.com founders Ed Craven and Bijan Tehrani increased their holding in PointsBet by more than 5 per cent during the year.
PointsBet expects to be cash flow break-even in the 2025 financial year and finish with circa $28 million after bailing out of its American business to focus on its Australian and Canadian interests.
BlueBet was a solid performer among the small-caps on the ASX with its share price closing at 30c, up 50 per cent from 20c at the start of the year and finishing 2024 with a market capitalisation of $170 million.
Ahead of its merger with Betr in July, BlueBet shares were 16c, but after reporting a winning spring carnival, it says there is a clear path to profitability.
The company expedited migrating its customers from BlueBet to the Betr platform in the early stages of the merger, resulting in year-on-year turnover growth of 131 per cent in October and November.
Reactivating the Betr client database has been a key driver of this increase, as has unlocking cost-saving synergies.
BlueBet has made no secret of its ambition to achieve a 10 per cent share of the Australian market as influential wagering figure Matthew Tripp prepares to assume the company's chairmanship from Michael Sullivan in January.
Aushorse Investor’s Guide 2025
- More Races worth $1 million+ than Europe & America combined
- More than 140,000 Australians involved in racehorse ownership
Globally, the share price of gambling giants Flutter and Entain endured contrasting fortunes.
Flutter’s decision to employ a United States expansion strategy has resulted in shares gaining 48.3 per cent for the year, ending 2024 at $US258.45.
The parent company of Australian bookmaker Sportsbet, Flutter heads into 2025 with a market capitalisation of more than $US46 billion, a 54 per cent increase on the previous year.
Flutter switched its primary listing to the New York Stock Exchange in June in a move that coincided with a change to its management structure.
America is seen as a major growth area for Flutter with revenue for the third quarter in 2024 increasing 51 per cent.
The US business, which includes FanDuel, represented $US1.25 billion of the $US3.25 billion of global revenue generated in the September quarter.
Entain, whose Australian wagering brands include Ladbrokes and Neds, suffered a 30.26 per cent fall in its share price for the year.
Listed on the FTSE100, Entain shares finished 2024 at 687.20p after trading at a 52-week high of 1017.00p during March.
Entain’s shares continued to fall before recovering as its US joint venture with BetMGM reported earnings-positive in the quarter, thanks to a 22 per cent share in the growing iGaming sector.
The year ended with Entain valued at almost $A9 billion but with potential storm clouds ahead for investors.
Australia’s financial watchdog AUSTRAC initiated legal action against the bookmaker in December.
Bren O’Brien
AUSTRAC alleges Entain breached Australia’s anti-money laundering and counter-terrorism financing laws, and the case will be heard in the Federal Court.
Since AUSTRAC announced it would be pursuing civil penalty proceedings against Entain, the company’s share price has dropped almost 15 per cent.
