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Tabcorp CEO Rytenskild resigns amid allegations of “offensive” language

| By Robert Fletcher
Tabcorp Holdings has announced that Adam Rytenskild has resigned as CEO and managing director of the business after allegations were made about his use of “inappropriate and offensive” language in the workplace.
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Rytenskild has served as CEO of Tabcorp since May 2022. He joined the group in 2000 and worked his way up the business, serving in a series of roles before taking the top position.

However, Rytenskild will now exit the business, with Tabcorp confirming his resignation in a statement issued today (14 March). 

Rytenskild is accused of using inappropriate and offensive language in the workplace. In the statement, Tabcorp said its board had become aware of the allegations, with this language being “inconsistent” with his leadership.

Following discussions with the board, Rytenskild tendered his resignation and will step down immediately. Rytenskild will receive only termination payments in line with Australian law and forfeit all unvested short-term incentive and long-term incentive awards.

“Tabcorp expects its leaders to uphold company values at all times and will not hesitate to take action to uphold expected standards of conduct,” Tabcorp said. “To protect the privacy of those involved, Tabcorp does not intend to make any further comment in relation to the conduct.”

Rytenskild “regrettably” leaves Tabcorp

Commenting on the news, Rytenskild said that he did not remember making the comments. He added that he would be leaving Tabcorp, where he was worked for 22 years, with regret.

“I don’t recall making the alleged comment and it’s not language I would usually use, but I have regrettably agreed to resign,” Rytenskild said. “Tabcorp has been an enormous part of my life for many years and I believe in the journey the company is on.”

Rytenskild spent the first 10 years of his time with Tabcorp in various general manager roles. He went on to become executive general manager for distribution and then chief operating officer of keno and gaming.

More recently, he was managing director of wagering and media from September 2017 to May 2022. After this, he took on the roles of both CEO and managing director. 

Chairman Akhurst to take the helm

Following the resignation, Tabcorp chairman Bruce Akhurst will take on additional duties as executive chairman. He will remain in this role while a search for a permanent replacement is conducted.

Executive search business Maritana Partners has been appointed to commence a global search for a new managing director and CEO.

“The board regrets Mr Rytenskild’s employment has ended in this way and acknowledges his commitment to Tabcorp’s growth over more than two decades, including the last two years as MD & CEO and his contribution to the transformation of the company” Akhurst said.

“Today’s change does not impact the strategic direction of the company. We have the depth and capability across the executive and the senior leadership team to continue our transformation.

“We remain focused on executing our strategy at pace, transforming our competitiveness, growing market share, levelling the playing field for fees, taxes and regulation and reshaping the business to deliver a more efficient and effective organisation. Tabcorp is on track to deliver this and create a growing and more valuable company for shareholders.”

Impairment charges push Tabcorp to net loss in H1

The resignation will come as a further blow to Tabcorp. Last month, the group published its H1 results, with these showing a decline in revenue and a heavy net loss.

In the six months through to 31 December, group revenue was down 5.1% to AU$1.21bn (£625.4m/€732.1m/US$800.6m), with a decline across both its two core businesses.

Wagering and media revenue fell 4.2% year-on-year to $1.12bn, reflecting a decline in the overall wagering market. Also in this segment, revenue from the Media and International business declined 5.4%. 

As for gaming services, revenue dropped 14.5% to $93.0m. Tabcorp said this reflected the impact of the sale of eBet and Max Performance Solutions.

Expenses were also higher year-on-year in H1, with the main sticking point being $852.0m in impairment charges. This, coupled with revenue decline, left a $641.7m net loss, in contrast to the previous year’s $53.2m net profit. In addition, EBITDA fell 34.7% to $131.7m.

Slight boost with tax refund

Despite the net loss, there was some positive news during H1. In September, Tabcorp was able to resolve a tax dispute with the Australian Taxation Office, with the business set to receive an $83m tax refund.

This case relates to income tax treatment of payments for various licences and authorities. Tabcorp says it paid the disputed amount of tax liabilities and interest in full.

Also in H1, Tabcorp was awarded exclusive rights to wagering and betting in Victoria for the next 20 years. Tabcorp, which has held its current licence since 2012, will pay Victoria’s government over $1.00bn during the next two decades.

However, there were also some regulatory issues. These included a record $1.0m fine in Victoria over its conduct during a major system outage in 2020.

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