Tab NZ figures hit by national lockdown in August

| By Richard Mulligan
New Zealand’s betting monopoly Tab NZ was impacted by the national lockdown as it missed budget across all key metrics in August.

Tab New Zealand (Tab NZ) recorded turnover of $180.1m, which was $18.0m below budget and $28.1m below the August 2020 figure. Total gross betting revenue of $27.8m was $3.7m below budget.

The group said there were significant revenue-related impacts due to domestic racing being shut down, as well as the Tab’s retail and gaming networks being closed during August’s Alert Level 4 lockdown. It said the lack of any domestic racing being held from 18 August, due to the lockdown, has also materially impacted offshore bookmaking fees and betting levy repeal monies received by the racing codes.

Racing saw peak turnover for a domestic meeting of $2.20m on 14 August at Riccarton. The top three sports events by turnover were the two All Blacks vs Wallabies test matches ($1.52m across both matches) followed by the Warriors vs the Raiders rugby league game on 27 August ($500,000).

Reported profit for the month was $8.7m, which was $3.0m below budget. This consisted of $7.8m from betting and $900,000 from gaming. Operating expenses were $9.2m for the month, which was $0.7m below budget.

The total gross betting revenue was generated at a margin of 15.4%. The total margin for all New Zealand racing was 18.7%, slightly above the FY21 New Zealand racing margin of 18.2%. Overseas racing margin was 19.3%, in line with the FY21 average of 19.2%.

Sports multi margin was “low”, according to Tab NZ, at 12.8%, driven by lower than average margins across rugby union, rugby league and football.

Racing codes were paid $11.1m in distributions and other payments for August, versus $11.9m budgeted.

Tab NZ said in a statement: “The Tab and industry in general remains in a much more robust position financially than during last year’s nationwide lockdown, however, this continues to be a rapidly evolving situation and an aura of caution is naturally at play when assessing future potential trading conditions and subsequent flow-on effects to profit distribution.

“Despite the impact of lockdown on trading in August, the Tab NZ board has held distributions at budgeted levels pending further clarification of alert level implications over the coming weeks. Although betting performance has been relatively strong through the first half of September, continued closure of Auckland retail and gaming in particular present material challenges for the business and will require continued monitoring and further assessment at the appropriate time.”

Tab NZ recorded profit figures of NZ$15.1m for the month of July, exceeding budget expectations by $3.1m. However, the operator warned at the time that lockdowns would have a negative effect on revenue in the coming months.

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