So why is there a 'funding crisis'--figures seem to be back close to pre EI levels
Tabcrop's Wagering EBITDA was down 7%
. The cost side is hurting them (a first for TAH!) and would have a bit to do with responding to competition.
** while overall turnover increased around 3%, Vic revenue fell 0.3% and NSW revenue rose only 0.4%, both resulting from Tabcrop lowering pricing on tote betting (power plays etc).
** Overall wagering costs were up 5%, much of this is related to the start up costs of Luxbet. Analysts estimate that Luxbet's start up costs have come in at 200% of budget.
** The higher race field fees costs add up as well (was $20m, will rise to $30m next year)
The wagering margins are highly vulnerable to cost increases. The increased competition that comes from corporates bookies (who now advertise) will be fought by Tabcorp and will be expensive. This includes increased costs to fight for market share (advertising), competition for the licenses and competition to stop Betfair.
Imagine this year's Spring Carnival - the advertising and the 'free offers' will be everywhere!
Some interesting market share numbers:
TAB Off Course (01-08): 68%, 65, 57, 55, 55, 52, 50.
Tote On course (01-08): steady between 5% - 6%
TAB Phone & Net (01-08): 11%, 11, 14, 14, 15, 15, 15, 16.
Bookmakers Oncourse (01-08): 9%, 13, 10, 9, 8, 7, 6, 5 (!!).
Bookmakers phone and net (01-08): 5%, 6, 13, 16, 17, 17, 21, 23.