Tatts Group profits down but online future looks bright
Growth in Australian operator's online lottery and sportsbook fail to prevent 22.5% decline in profits
Australian operator Tatts Group has posted a decline in profits for the 2012 financial year despite strong growth from its online lottery and sports betting businesses.
The closure of its Victorian poker machines business contributed to a 22.5% drop in group profits from $319.1m (£184.2m) to 247.3m (£142.7m) for the full year ended 30 June.
However online sports betting revenues rose 21.5%, representing more than 20% of Tatts’ entire sportsbook “ an increase of 4.6% year-on-year.
Online lottery sales rose 35.2% during the 12-month period and now equate to 8.2% of total lottery sales, up from the 6.6% share recorded the previous year.
The company’s licence to operate poker machines in the Australian state of Victoria expired last August, meaning that part of the business contributed just 42 days of revenue to the results.
Tatts confirmed in a trading update that it is undergoing a “brand revitalisation” programme designed to align its online and retail businesses, and that it is close to finalising a new Tatts.com website and mobile app.
“People know us and trust us. As a local player and local brand, we can play with the best of them,” chief executive Robbie Cooke said. “And the fact that we can offer a combined product, lotteries and wagering, [is] a point of difference in the market.”
Tatts remains a market leader in the Australian online sports betting market which is set to become increasingly competitive as William Hill completes its acquisition of Tom Waterhouse, a deal confirmed earlier this month.