The newly merged $11 billion Tabcorp-Tatts gambling giant will pursue overseas lottery licences and seek opportunities to expand its wagering business into the United States if sports betting becomes legal there.
Ahead of Friday’s implementation of the long-awaited mega-merger, Tabcorp chief executive David Attenborough said his highest priority now was the mammoth task of integrating the two companies, their businesses, technology, and thousands of employees across wagering, lotteries and gaming services divisions.
“These are complex transactions,” he said, “bringing two large businesses together with a lot of history.”
But the merged gaming company’s “strong balance sheet”, he said, meant it would be in a prime position to start considering bolstering its n operations and considering international markets after the integration process was completed.
The licence to operate the United Kingdom’s National Lottery is up for renewal in 2019, while in the US the Supreme Court is expected to deliver a ruling in June on a challenge to a federal anti-gambling law that bans sports betting in most states outside of Nevada.
“Subject to us executing the integration, and that’s priority no.1, there are opportunities to grow,” Mr Attenborough said.
“And, certainly, one of the benefits is having a strong balance sheet.”
On the potential opening up of sports betting in the US, where some estimates suggest punters place $195 billion on illegal sports wagers every year, Mr Attenborough said wagering operators worldwide were “definitely keeping an eye on that market … it could be a very large market”.
“There is real momentum for the legalising of sports betting in the United States,” he said. “It’s something that’s been on the cards for years.”
Tabcorp’s other overseas expansion, into the fiercely competitive UK gambling market through the digital betting start-up Sun Bets has been beset by problems. Since its launch, Sun Bets, a joint-venture with News Corp, has been performing below expectations and, last year, it lost more than $46 million.
Also on Thursday, Mr Attenborough unveiled Tabcorp’s new leadership team, which, he said, “reflects the best of both organisations”, Tabcorp and Tatts.
Eight of the 11-person executive leadership team will come from Tabcorp, including Mr Attenborough, chief financial officer Damien Johnston and the managing director of wagering and media, Adam Rytenskild.
The three Tatts executives to be appointed to leadership positions with Tabcorp are the managing director of lotteries and Keno, Sue van der Merwe; the managing director of gaming services, Frank Makryllos; and chief information officer Mandy Ross.
After 14 years in the job, Tabcorp’s outgoing CIO Kim Wenn decided to leave post-merger. “I’m really proud of the legacy that I’m leaving and equally excited about the next chapter in my life,” she said.
“I’m proud of the difference that the executive collectively have made on our targets on gender diversity,” she said. “We are up to 38 per cent women in senior leadership.”
The ASX-listed Tabcorp and Tatts are ‘s two biggest gaming companies. The combined entity is expected to generate yearly revenue of about $5 billion and $915 in earnings. The merger is expected to deliver savings of $130 million a year.
Mr Attenborough said Tabcorp’s new leadership team and 5000 employees will “work to deliver the material benefits the combination is expected to create for shareholders, the racing industry, business partners, customers and governments”.
Mr Attenborough said the the merged entity encompassed the powerful Tatts lotteries business, digital betting services and totalisator betting licences in every state and territory except Western .
He said Tabcorp would also seek to bid for the WA TAB, the last state-owned tote in the country, if its long-proposed privatisation is realised in coming years.
“What this combination brings is a very strong diversified gambling and entertainment group,” he said, “and if you remember why we are doing it, there is a lot of change out there, our customers are more diverse and want different things, there is a massive amount of technology driving change, and we have got to be adapting and investing.”