Adam Rytenskild, the CEO of the renowned Australian gambling company Tabcorp, has resigned from his post after allegations of using inappropriate and offensive language surfaced. He became CEO in May 2022, following a long career at Tabcorp since the year 2000, where he climbed through the ranks to eventually lead the company.
The resignation was officially confirmed through a company statement disseminated on the 14th of March. According to the statement, the board was made aware of charges citing Rytenskild’s use of language that was deemed inconsistent with his role as a leader.
Subsequent discussions between Rytenskild and the board led to his decision to submit his resignation and vacate his position with immediate effect. Following Australian legal guidelines, Rytenskild will receive termination payments devoid of all short-term and long-term incentive rewards which remained unvested.
Tabcorp took a stern posture in their announcement, stating, “Tabcorp expects its leaders to uphold company values at all times and will not hesitate to take action to uphold expected standards of conduct.” In an effort to protect the privacy of individuals involved, the statement clarified that Tabcorp will refrain from further detailing the incident.
Addressing his departure, Rytenskild expressed his regret and noted that the purported comments did not reflect his typical language use. “I don’t recall making the alleged comment and it’s not language I would usually use, but I have regrettably agreed to resign,” he remarked. He acknowledged the significance Tabcorp has held in his life over his 22-year tenure and expressed his belief in the company’s future.
Throughout his two decades with the company, Rytenskild has held various roles, including several general manager positions, executive general manager for distribution, chief operating officer of keno and gaming, and eventually the role of managing director of wagering and media, which he served from September 2017 until his appointment as CEO and managing director in May 2022.
In the interim, Tabcorp’s chairman Bruce Akhurst will step up to perform additional responsibilities as executive chairman until a permanent CEO is found. A global search to identify a successor is being initiated by the executive search firm Maritana Partners.
Akhurst commented on the situation, expressing regret over the circumstances of Rytenskild’s departure but acknowledged his commitment and contribution towards Tabcorp’s transformative growth. He assured stakeholders that the strategic direction of the company remains unaltered and emphasized the leadership team’s focus on executing the company’s strategy and transforming its competitive edge.
Tabcorp, however, faces a challenging time as this resignation follows a period of financial downturn. The group disclosed a net loss in their H1 results, coinciding with a 5.1% decrease in group revenue to AU$1.21 billion. Both core businesses of wagering and media, as well as gaming services, reported declines in revenue.
Additionally, the company faced an increase in expenses, primarily due to AU$852.0 million in impairment charges, leading to a net loss of $641.7 million, which contrasts starkly with the $53.2 million net profit from the previous year. EBITDA also saw a dip by 34.7% to $131.7 million.
Despite the financial hurdles, H1 brought some positive developments for Tabcorp. The company resolved a tax dispute resulting in an $83 million refund and secured exclusive wagering and betting rights in Victoria for the next 20 years, promising significant revenue to the state over that period.
Nonetheless, regulatory challenges persisted, as the company grappled with a record $1.0 million fine in Victoria due to a major system outage in 2020.
As the search for Rytenskild’s successor is underway, Tabcorp remains steadfast in its commitment to shareholder value amidst a period ingrained with both strategic wins and significant challenges. The gambling industry behemoth strives to navigate through this phase of transformation and leadership restructure, anticipating stability and growth in the coming years.
