Gillon McLachlan, the accomplished former head of the Australian Football League (AFL), has been appointed the new CEO of Tabcorp, marking a significant leadership change for the Australian gambling giant. McLachlan is set to assume his new role on August 5, pending the essential regulatory approvals.
McLachlan brings with him a decade of success from his tenure at the AFL, where he led the organization through remarkable growth and development. Under his guidance, the league expanded to include 18 teams, and revenue more than doubled to reach an impressive AU$1.06 billion (£553.4m/€655.6m/US$701.8m). His leadership was marked by strategic development, financial prowess, and a keen eye for expansion opportunities, making him a high-profile and strategic choice for Tabcorp.
Replacing Adam Rytenskild, who resigned in March following allegations of using inappropriate and offensive language in the workplace, McLachlan takes over at a challenging time for Tabcorp. Rytenskild had been at the helm since May 2022. In the interim, Chairman Bruce Akhurst had stepped in to manage additional duties as executive chairman while the search for a new CEO was underway. Akhurst will continue in this capacity until McLachlan formally steps into his new role.
“Gill needs no introduction,” Akhurst stated, underscoring McLachlan’s reputation as one of Australia’s premier CEOs. “Securing Gill is a great vote of confidence for Tabcorp’s future. We’ve laid strong foundations, and Gill brings a growth mindset and the capability to capitalize on the opportunities ahead of us.”
Akhurst particularly highlighted McLachlan’s experience with media rights deals, some of the most significant in Australian sports history, as a major asset to Tabcorp. “We’re excited about the potential growth opportunities for our wagering and media business under his leadership,” he expressed sentimentally.
Addressing his appointment, McLachlan affirmed his commitment to accelerating Tabcorp’s growth across its omnichannel entertainment offering, which spans digital, retail, and media enterprises. “Tabcorp is a wagering, broadcast, and integrity services business, and the challenges of growing it are appealing,” he said. He further emphasized Tabcorp’s historical contributions, noting the AU$1.10 billion it provided to the racing industry last year, positioning the company as a significant partner and the sole wagering licensee in all Australian states except Western Australia.
“This is a really important component of my decision. There are enormous opportunities ahead and I’m looking forward to driving the sport category among other things. Tabcorp is part way through its transformation journey. I’m looking forward to working with the leadership team to accelerate and deliver on the growth opportunities,” McLachlan added.
Akhurst also noted the significant progress made since Tabcorp’s demerger, focusing on customer offerings and structural reforms. “In the two years since demerger, we have significantly improved our customer offering and delivered key structural reforms in Queensland and Victoria. The transformation of Tabcorp is not complete, and I am delighted that Gill is joining us to continue to drive change and growth,” he said.
However, McLachlan is coming on board after a difficult first half for the group.
. In the six months leading up to December, Tabcorp experienced a 5.1% decline in revenue, totaling AU$1.21 billion. This decline was noted across both of its core business areas. Wagering and media revenues fell by 4.2% to $1.12 billion, reflecting a downturn in the overall wagering market. Additionally, revenue from the Media and International business segment declined by 5.4%.
Gaming services also suffered with revenue down 14.5% to $93.0 million, influenced by the sales of eBet and Max Performance Solutions. Tabcorp also faced higher expenses, notably an $852.0 million impairment charge, which compounded with the revenue decline, resulting in a net loss of $641.7 million, a stark contrast to a $53.2 million net profit the previous year. EBITDA fell by 34.7% to $131.7 million.
Nevertheless, there were some positive takeaways from this period. In September, Tabcorp settled a tax dispute with the Australian Taxation Office, securing an $83 million tax refund.
Recently, regulatory issues have also plagued Tabcorp. Just last week, the company was ordered to pay $370,417 in Victoria after pleading guilty to 43 charges related to underage gambling. The Victoria Gambling and Casino Control Commission (VGCCC) accused Tabcorp of failing to prevent minors from gambling and monitor electronic betting terminals (EBTs), with breaches spanning from September 2022 to October 2023. If found guilty on all charges, Tabcorp faces a potential collective fine exceeding $1.0 million.
On the regulatory side, there was a major win for Tabcorp in December when it was awarded exclusive rights to offer wagering and betting in Victoria for the next 20 years, starting in August 2024, following the expiration of its current exclusive licence.
Additionally, the New South Wales (NSW) government is currently considering a Tabcorp proposal to elevate the state’s point of consumption tax (POCT) to 20%, up from the current 15%, aligning it with other states. The proposal is part of broader legislative and licensing reforms that Tabcorp advocates for, aiming to fortify its operations given the challenging regulatory landscape.
With McLachlan at the helm, Tabcorp looks ahead with a renewed vision and strategic focus, aiming to surmount its recent challenges and seize new growth opportunities.
