TAB NZ has published its fourth monthly trading update for the 2022/2023 financial year, sharing the key results and highlights for November 2022.
The Data
While Tab NZ’s Gross betting revenue (GBR) and turnover was above budget in November, its gross betting margin (GBM) came in below expectations.
In fact, New Zealand’s sports betting monopoly posted a turnover of NZ$260.9m (US$163.5m), 7.3 per cent (NZ$17.7m) above budget. Gross betting revenue (GBR) was NZ$40.6m (US$25.4m), up on budget by 1.7 per cent (NZ$0.5m). Gross betting margin (GBM) was 15.6 per cent, 0.9 percentage points below budget.
Notably, November’s optimistic turnover followed a strong Melbourne Cup, NZ Trotting Cup and the continuing Football World Cup.
Retail traffic stood firm following the easing of Covid-19 restrictions, and overall field sizes across all three codes were up on the year-to-date average.
However, significant factors impacted the figures, namely competition from unregulated offshore operators, reduced betting margin and lower average bet size in key customer segments.
Hindsight and Insights
Tab NZ already signaled to the racing codes in early December that due to it missing budgets a number of times in recent months, it would have to reduce distributions across New Zealand by 9% for the 2022-23 financial year ending 31 July 2023. When taking into account other distributions derived through New Zealand racing, overall distributions are expected to be around $160m for this financial year.
These figures have prompted several points of discussion among various stakeholders and authorities in the industry, who offered their different viewpoints and insights on the matter. Reliable bonus authority and webmaster at NoDeposit365.co.nz, Olivia King has been following the company’s performance, particularly since World Cup season ended not so long ago. King shed light on the situation, explaining:
‘As with any business, failing to meet financial targets can be rather detrimental. However, when looking at Tab NZ, the numbers aren’t too disheartening. Yet, they should still serve as a wake-up call for the company to pull its socks up and plan for a stronger Q1 in 2023’
Meanwhile, Tab NZ noted that the Melbourne Cup was by far the most popular racing event during the month, producing a turnover of $11.5m. Interestingly, the top sporting event by turnover for November was the Rugby World Cup final featuring the New Zealand Black Ferns and England Red Roses with turnover of $1.2m. Basketball was the leading in-play sporting code accounting for 35% of in-play turnover while Football was the top pre-match singles sporting code with 37% of turnover.
Established through the Racing Industry Act 2020, Tab New Zealand provides betting services to New Zealanders and makes returns back to New Zealand racing and sporting organisations. Each year it returns around $200 million to New Zealand racing and sports.