Racing turnover up 10% as TAB NZ posts $12.8 million profit for August

TAB NZ has posted a $12.8 million profit for August but says, while encouraged, it remains cautious about its ability to meet full year projections because of the potential for further disruption by COVID-19.

TAB NZ, which says it is committed to providing regular betting updates, recorded a 10.1% rise in racing turnover with no significant growth in the volume of racing.

Its $12.8 million net profit for the month was $1.7 million above budget and $1.4 million above last year.

This was largely down to betting profit of $11.9 million being up $2.2 million on budget.

Its gaming revenue was $600,000 below budget and $700,000, or 26.3%, below last year due to Auckland sites being closed for 19 days during lockdown.

The positive result saw a distribution of $11.5 million to the codes, up $800,000 on budget.

The amount paid out reflected offshore bookmaker commission fees returning $1.3 million, compared with the budgeted amount of $500,000.

TAB NZ attracted total turnover of $208.2 million in August, which was $21.8 million above budget and $27.1 million, or 14.9%, up on last year. This was put down to more betting on overseas racing and sport.

“Analysis of customer behaviour shows that many who bet on domestic racing only prior to lockdown have maintained their overseas racing activity while their domestic racing activity has returned to prior levels.”

Domestic racing accounted for $54 million in turnover, while betting on overseas racing was $82.2 million and sport $71.7 million.

“Sports turnover was strong (+36%), benefiting from the condensed nature of the sports calendar, with a number of sports seasons overlapping where they traditionally would not, eg. NBA taking place in August.”

A total of 94,000 people bet during the month, with days active comparable to the peak November periods (Melbourne Cup and NZ Cup week and major World Cups).

TAB NZ says its retail operations and customers have also been shown to be resilient, notwithstanding the recent Auckland level 3 lockdown.

“Retail turnover in Auckland returned, almost immediately, to pre-lockdown levels. The board recognises the significance of a level 3 or 4 lockdown on our gaming business is considerable given the absence of being able to provide a comparable online offering.

“This presents risk to the funding of racing integrity, racing enhancement and community sport which Class 4 gaming enables. Extra vigilance of gaming performance is therefore required to manage the ongoing risk of COVID-19.”