Australian racing and wagering giant Tabcorp is well placed to generate revenue growth in line with nominal GDP growth in the short-term thanks to its unique omni-channel presence that gives it a leg-up over the country’s online-only sportsbook operators, according to ratings agency Fitch.
Having emerged from a challenging few years under new management led by Managing Director and CEO Gillon McLachlan, Tabcorp’s rising prospects are, Fitch explained, anchored by its strong retail footprint and exclusive license arrangements that are supporting earnings amid persistent cost-of-living and inflationary pressures that have weighed on gaming activity.
The analysis formed part of the ratings agency’s broadly positive assessment of Tabcorp’s recently announced AU$2 billion medium-term note (MTN) program and AU$300 million 5.99% senior unsecured notes due 28 May 2031, designed to improve its funding diversification while extending its debt maturity profile. Fitch has assigned a “BBB-” rating to both the notes and the MTN program, indicating low risk of default and adequate capacity for payment of financial commitments but noting that adverse business or economic conditions are more likely to impair this capacity.
In a research note, Fitch said it expects Tabcorp’s refreshed leadership team to accelerate delivery of its strategy, leveraging exclusive licenses, unique media assets and a broad retail footprint to strengthen omni-channel engagement and revitalize tote betting over the next 24 months.”
“Cost and capital discipline remain central, with the company already delivering recurring opex savings of about AU$40 million and much lower capex in the financial year ended June 2025, supporting its EBITDAR margin against demand pressure,” Fitch explained.
It added that recent regulatory developments have narrowed Tabcorp’s structural disadvantages against corporate bookmakers that benefit from lower racing industry funding and wagering taxes, and improved relative profitability.
“The license in Victoria has created a level playing field for wagering taxes and fees and has eliminated joint-venture obligations with the Victorian racing industry, driving 12% revenue growth in FY25,” it continued. “Fitch views the New South Wales government’s announcement that it has also commenced consideration of reforms as supportive, but outcomes remain uncertain.”
While potential regulations to curb gambling harm, such as advertising bans, present downside risk – particularly to online-only operators – Fitch said Tabcorp’s competitive positioning may mitigate the effects.
“Fitch therefore sees revenue growth broadly tracking nominal GDP growth, with potential upside from the strategy,” it stated.
“Tabcorp combines both retail and digital platforms with the ability to provide tote offering, setting it apart from corporate bookmakers in Australia that operate solely fixed-odds offerings online. Tabcorp has the largest retail presence in Australia, with over 4,000 venues – both standalone betting stations and pubs – and a significant digital segment contributing around 40% of revenue in FY25. Its moderate diversification into international wagering and non-wagering, which account for around 20% of revenue, reinforces its competitive position.”
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