Tabcorp and the Leading Figures in the Australian Market

In a detailed review by IGB, special correspondent Tom Waterhouse explores the activities of prominent industry leaders in Australia. Discover the most intriguing insights about the performance of major Australian gambling industry players and notable personalities in the sector on ipepper.news.

Australian Background - Tabcorp

The NSW TAB (Totalisator Agency Board) was established in 1964 following the legalization of off-course betting by the Victorian TAB in 1961. Tabcorp was listed on the ASX by the Victorian Government in 1994. In 1999, Tabcorp acquired Star City Holdings, which was later spun off as The Star Entertainment Group in 2011. In 2000, Tabcorp expanded further by acquiring Structured Data Systems, a developer of gambling games, keno systems, and animated games.

Today, Tabcorp boasts 805,000 active digital customers and over 4,000 TAB locations across Australia. The company holds a 34.6% share of the overall Australian betting market and a 24.5% share of the digital betting market. In FY2023, Tabcorp reported revenues of A$2.43 billion and a net profit after tax of A$84.3 million.

However, Tabcorp's value has declined by 40% to A$1.52 billion over the past 12 months, with a 5.1% decrease in revenue in the first half of the financial year due to rising competition and narrowing profit margins. Flutter's Sportsbet continues to lead the Australian online betting market, with a 45% digital market share and 1.1 million active customers, according to the Australian Financial Review.

In March, Tabcorp announced the resignation of CEO and Managing Director Adam Reitenskilde. In the interim, Chairman Bruce Akhurst has assumed additional responsibilities while the search for a permanent successor is underway. The ideal candidate for CEO will be an industry leader with a strong background in innovation, marketing, and cost management to drive Tabcorp's future growth.

The search for Tabcorp's new CEO has brought to mind some of the industry's legendary figures, such as Cormac Barry, Sam Swanell, and Breon Corcoran.

Cormac Barry

Cormac Barry has over 25 years of experience in online B2C, online B2B, and retail across various sectors. His career in the gambling industry began in 2000 at Paddy Power, where he served as Head of the Online Division. During his nine years at Paddy Power, Barry was instrumental in the development and expansion of PaddyPower.com, which played a crucial role in Flutter Entertainment's global growth. Notably, Paddy Power Betfair rebranded as Flutter Entertainment in March 2019.

Paddy Power acquired a 51% stake in Sportsbet in May 2009 and became its full owner in March 2011. Barry moved to Sportsbet in 2009 and was appointed CEO in 2011. At the time, Sportsbet had revenue of A$204 million and an EBITDA of A$43 million, with an EBITDA margin of 21%.

Over the next seven years, Barry transformed Sportsbet from a startup to Australia's leading online betting brand. He pioneered highly effective digital marketing strategies, increasing Sportsbet's total advertising spend from A$40 million in 2013 to A$156 million in 2018. The company's ad spend on Google and Facebook increased eightfold over this five-year period.

Under Barry's leadership, Sportsbet also innovated its product offerings, becoming the first Australian operator to introduce Same Game Multis in 2016. Known as parlays in the US or accumulators in the UK, this innovation gave Sportsbet a significant competitive edge, being almost two years ahead of its rivals. Flutter's expertise in risk management and trading further solidified this advantage, particularly in multi-betting, a high-margin product.

By the time Barry left Sportsbet in 2018, the company's revenue had nearly quadrupled to A$766 million, and its EBITDA had risen sixfold to A$262 million, with an EBITDA margin of 34%. Barry's tenure at Sportsbet is marked by substantial growth and innovation, establishing the brand as a dominant force in the Australian online betting market.

Sam Swanell

Sam Swanell founded PointsBet in 2015, transforming it into a major operator in Australia. When the US market opened in 2018, he successfully positioned PointsBet to compete with the world's largest operators. This culminated in the sale of the US business to Fanatics in 2023 for US$225 million (approximately A$336 million). Today, PointsBet's Australian business holds about 5% of the market and is valued at A$150 million according to the Australian Financial Review.

Swanell's career in betting began at Tote Tasmania, where he managed all revenue channels. Nearly 20 years ago, I met him and was immediately impressed, hiring him as COO of the TomWaterhouse brand in 2009. At TomWaterhouse, Swanell played a crucial role in the business's rapid growth.

Leveraging his experience at Tote Tasmania and TomWaterhouse, Swanell launched PointsBet, differentiating the brand with a new product: scatter betting (points betting). This innovative model offers customers greater rewards if the margin of victory in a game is larger, and vice versa.

Swanell's ability to quickly gain market share in Australia's highly competitive environment is remarkable. His entrepreneurial mindset and innovative approach to technology and product development could infuse new energy into Tabcorp, driving further technological and product advancements.

Breon Corcoran

Breon Corcoran has achieved remarkable success at Paddy Power, Betfair, and the merged entity, Paddy Power Betfair, which was later rebranded as Flutter Entertainment. Corcoran spent 11 years at Paddy Power, with the last year and a half as Chief Operating Officer. He then served as CEO of Betfair for nearly four years. In February 2016, Corcoran played a pivotal role in the £7 billion merger of Betfair and Paddy Power. Following the merger, he was appointed CEO of Paddy Power Betfair, a position he held for two years.

After leaving Paddy Power Betfair, Corcoran became CEO of WorldRemit for four years before being appointed CEO of the £3 billion trading platform IG Group in January this year. Mike McTeigue, Chairman of IG Group's board of directors, praised Corcoran, stating, "He is a proven leader of high-performing teams in multinational organizations, capable of delivering results for all stakeholders."

While these specific executives might not be available for a position at an Australian company, finding the right leader is the most crucial responsibility of the board chair. If Tabcorp can appoint the right CEO, the company stands to leverage its extensive customer base of over 800,000 and its strong brand presence in Australia to achieve significant growth and innovation.