The AFL’s McLachlan Tabcorp jump reflects the sport’s gambling addiction

The AFL’s McLachlan Tabcorp jump reflects the sport’s gambling addiction

The AFL’s McLachlan Tabcorp jump reflects the sport’s gambling addiction

As former AFL chief executive Gillon McLachlan settles into an observer role before officially starting as Tabcorp chief executive on August 5, one of the first things he’ll notice is a £600 million check of dollars sent from Tabcorp to the Victorian Government before June 30 as an advance on it. the new victorian betting license monopoly 20 years.

This is not something McLachlan will be familiar with. During his 20 years at the AFL, the last 10 as CEO, he was very used to governments, gambling and media outfits funneling money into his not-for-profit monopoly organisation, not the other way around.

As Tabcorp’s announcement to the ASX said yesterday, McLachlan “has a proven track record of growth”, with AFL revenues doubling from $502 million to $1,063 million in his 10 years as CEO.

Yes, but how much of that came from the toxic gambling industry?

Unlike the British Football Association, which in 2017 broke its sponsorship deal with Ladbrokes due to apparent conflicts of interest, the AFL doubled its gambling offerings during McLachlan’s tenure, taking a share from the revenue from each bet placed and more than 10 million dollars. a year in direct sponsorship payments from CrownBet/BetEasy and Sportsbet. It has also enjoyed turbo payments for broadcasting rights from News Corp’s Seven and Foxtel, which are largely supported by their own reliance on gambling advertising.

It will be very interesting to hear how News Corp’s current campaign to restrict social media for under 16s builds on the ongoing arrangements at the AFL where you get Sportsbet odds thrown at you every time you download the AFL app or watch at her. website.

Tabcorp has been undercut in recent years by mostly foreign online bookmakers led by Sportsbet, which in calendar 2023 took $2.2 billion from Australian punters, a 7% drop due to waning interest in racing and of cost of living pressure.

Meanwhile, Tabcorp’s total revenue in 2022-23 was just $2.43 billion, meaning that despite buying every TAB state or territory in the country apart from WA, it doesn’t even have 10% of Australia’s $25 billion a year gambling market, $14. billions of which are losses at poker machines.

When the Kennett government led the way by floating Tabcorp in 1994, it had the traditional Victorian betting monopoly, plus a 50 per cent share of Victoria’s emerging poker machine market.

For the next 30 years, it was arguably the most transaction-focused company listed on the ASX. The first rival gambling outfit it bought was Sydney’s Star Casino in 1999, before moving to Jupiters in Queensland in 2003, then spun off its casino business in 2011 into today’s Star Entertainment, which he is in a world of pain.

It also absorbed most of Australia’s lottery licenses when it took over Tatts Group in 2018, but then dissolved that business as well in 2021.

What remains today is a legacy operation that derives over 80% of its gambling revenue from racing and still manages dinosaurs, traditional brick and mortar TAB retail stores across the country, plus paying for its wall dressing of screens. and gambling devices in thousands of pubs and clubs.

If Gillon McLachlan thought AFL politics was complicated, he has another thing diving full-time into racing/gambling channeling.

He toyed with taking over as chairman of Racing Victoria but missed out as the board erupted in acrimony, as can be seen in this recent extraordinary attack article by billionaire plumbing tycoon Jonathan Munz, chairman of the Association to owners of thoroughbred racehorses in Victoria.

And if McLachlan wants to rub shoulders across the border in NSW, he will have the pleasure of dealing with Racing NSW CEO Peter V’Landys, who is currently suing Tabcorp for failing to promote his competitors’ races at the Melbourne Spring Carnival. enough and it’s just off a four-year-long unsuccessful smear campaign against the ABC and its reporter Caro Meldrum-Hanna over her coverage of animal welfare issues.

The V’Landys and McLachlan will have one thing in common – they both think it’s perfect to have unrelated second jobs. V’landys has been NRL chairman since 2019 – in addition to being CEO of Racing NSW since 2004 – and last week McLachlan signed on as a “senior adviser” to Blackstone, the world’s largest private equity firm, which is the current owner of Crown Resorts.

As independent federal MP Kate Chaney noted in a tweet last week, McLachlan’s choice to bid widely across three gambling-related jobs for his post-AFL career “speaks volumes about the deeply normalized connections between sport and gambling”.

As for whether McLachlan will be any good as CEO of Tabcorp, AFRs Chanticleer columnist James Thomson made this skeptical observation yesterday about what he called “a classic boys’ club date.”

“He has zero listed company experience. Zero experience in for-profit companies, apart from a short stint at Accenture after graduation. And perhaps most notably, zero experience in the competitive, complex and technological betting sector”.

Yes, but Peter V’Landys supported McLachlan’s appointment and has plenty of political and media mogul connections. These two groups have so far failed to comply with a ban on gambling advertising recommended last year by a federal parliamentary committee chaired by the late Peta Murphy.

McLachlan and the AFL have been a big part of the push to stop this, which is rather ironic when you consider that Tabcorp’s position is that gambling advertising should be banned.

However, the horse has already bolted on this when you consider the huge databases that the likes of Sportsbet, Ladbrokes, Bet365, PointsBet and the newly merged Bluebet/BETR have already built up by spending literally billions of dollars on High’s gambling ad. The court opened the door to them in 2008.

All of this will make for interesting fodder when McLachlan addresses his first Tabcorp AGM as CEO on October 23. The company’s 140,000 disgruntled small shareholders must have had enough of recent developments that saw the stock price hit a low of just 59 cents after the former CEO. Adam Rytenskild was fired in March for making lewd comments about a female regulator.

On taking the top job in 2022, Rytenskild’s big line was that Tabcorp was now “flying off its cardigan”, as if to suggest it was still operating as a public sector bureaucracy nearly 30 years after privatisation.

Now they’ve hired a career operator from the non-profit sector to sort it out. Good luck Gill, you’ll need it!