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Tabcorp Holdings Ltd Reports Smoking Ban has Affected Keno Profits

On February 21, 2007, Tabcorp Holdings Ltd., a well-known gaming company, reported that the smoking ban imposed in the Queensland area is having a huge effect on their earnings. Tabcorp further stated that they expect the rest of the year to be even more challenging as their profits for the first half of the year have fallen. Tabcorp has discounted a partnership and even acquisition and international activities until they recover from the fall they have experienced.

The net revenue by the group has fallen to about 21.5% or an equivalent of $224.1 million in the first half of the year. Their normalized net revenues, not excluding the non-recurring items, was down to about 3.6% or an equivalent of $270.3 million, which failed to meet the market expectations in the gambling industry.

Their betting profits have improved to about 5.2% and its performance has been helped by the brand new wagering products. In the casino division, their normalized profit was down to about 0.5% and their actual profit was down to about 12.3%. According to Matthew Slatter, Managing Director of Tabcorp, they are still really suffering from the impact of the smoking ban despite the minimal improvement.

Slatter further stated that Tabcorp has no intention of looking into other opportunities in Macau because they want to concentrate their efforts in their roll-out Keno terminals which are located in China. At the moment, Tabcorp already has 300 Keno terminals in China and is planning to release 1,800 more Keno terminals over the span of 4 months starting from March. Nonetheless, the game of Keno and the Keno terminals are not expected to have much of an impact on the financial status of Tabcorp for the fiscal year 2007-2008.

 

Sunday, March 18 , 2007
Louis Blechdom