Investment research firm Morningstar is predicting long-time Australian racing and wagering giant Tabcorp to report a 17% increase in year-on-year EBITDA to AU$371 million for the fiscal year ended 30 June 2025 – a welcome improvement given the country’s challenged wagering market.
In a note, Morningstar equity analyst Angus Hewitt said that although Tabcorp’s wagering turnover is expected to have declined for the period, this was likely more than offset by earnings from the new Victorian license that became effective in August 2024.
Nevertheless, Hewitt observed that wagering in Australia – the bulk of Tabcorp’s business – is challenged right now with punters cutting back on gambling spending amid cost-of-living pressures. While not reported separately, we think from management.
This, he said, was reflected in the lower revenue recently reported by Ladbrokes operator Entain – which revealed Australia as its worst-performing region.
Tabcorp’s retail locations are also in “structural decline” as players continue to shift to digital betting channels where competition is intense and there are “no shortage of online bookie upstarts looking to quickly capture market share, offering free bets and generosity to lure gamblers, weighing on yields.”
Sportsbet, Australia’s market leader among online sportsbooks, appears to have claimed back some more share over the past quarter, Hewitt added.
On a positive note, “We forecast wagering growth in fiscal 2026 and operating leverage to improve earnings as the top line grows. Real incomes per capita in Australia are finally rising again, and interest rate cuts could further boost consumer confidence and discretionary spending.”
Morningstar has set a fair value estimate of AU$0.90 per share on Tabcorp shares compared with a closing price of AU$0.71 per share on 13 August.
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