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Each month, Australian bookmaking legend Tom Waterhouse publishes a newsletter from Waterhouse VC, his gaming and wagering-focused venture capital fund.

The fund is for wholesale investors, and specialises in global publicly listed and private businesses related to wagering and gaming.

Since inception in August 2019, Waterhouse VC has achieved a gross total return of +2,953% (+107% annualised), as at 30 April 2024, assuming the reinvestment of all distributions.

This month, the update offers a brief history of the Australian betting sector, with a view to understanding what the future might hold for one of the country’s first ever operators, Tabcorp.

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The NSW TAB (Totalisator Agency Board) was formed in 1964 after the Victorian TAB in 1961, which legalised off-course totalisator betting in Australia. Tabcorp was listed on the ASX by the Government of Victoria in 1994. In 1999, Tabcorp acquired Star City Holdings (subsequently demerged in 2011 to form The Star Entertainment Group) and in 2000, Tabcorp purchased Structured Data Systems, which developed wagering, Keno systems, and animated games.

Today, Tabcorp has 805,000 active digital customers and over 4,000 TAB venues. The company has an overall Australian wagering market share of 34.6% and digital market share of 24.5% (Tabcorp Holdings). In FY2023, TAB reported revenue of A$2.43bn and net profit after tax of A$84.3m.

Source: Sydney Morning Herald

Over the past 12 months, Tabcorp’s valuation has fallen 40% to A$1.52bn, with revenue down 5.1% in the first half of the financial year, increased competition and tighter win margins. Flutter’s Sportsbet continues to dominate the Australian online wagering industry, with 45% digital market share and 1.1 million active customers (Australian Financial Review).

Sportsbet’s online market share. Source: Australian Financial Review

In March, Tabcorp announced that Adam Rytenskild had resigned as CEO and managing director. Following the resignation, Tabcorp chairman Bruce Akhurst has assumed additional responsibilities while the search for a permanent successor is underway. A well-experienced industry leader with a history of product innovation, effective marketing and cost management could stimulate Tabcorp’s growth.

Tabcorp’s executive search made us reflect on some of the great leaders in the industry, including Cormac Barry, Sam Swanell and Breon Corcoran.

Cormac Barry

Cormac has over 25 years of experience in online B2C, online B2B, and retail across various sectors. In the wagering industry, Cormac began his career at Paddy Power as head of online in 2000. During his nine years there, he played a key role in developing and expanding Paddypower.com, which became the model for Flutter’s global growth (Paddy Power Betfair rebranded as Flutter Entertainment in March 2019).

Paddy Power acquired a 51% stake in Sportsbet in May 2009 and gained full ownership in March 2011. Cormac transitioned to Sportsbet in 2009 and was appointed CEO in 2011. At that time, Sportsbet had revenue of A$204m and EBITDA of A$43m (21% EBITDA margin). Over the next seven years, he transformed Sportsbet from a startup into Australia’s leading online wagering brand. He pioneered highly effective digital marketing strategies, increasing Sportsbet’s overall advertising spend from A$40m in 2013 to A$156m in 2018. Sportsbet’s advertising spend with Google and Facebook increased 8x over the five-year period from 2013 to 2018.

Sportsbet’s advertising spend with Google and Facebook over the 5 year period from 2013 to 2018. Source: ABC News.

Under Cormac’s leadership, Sportsbet also innovated on product, becoming the first Australian operator to introduce ‘Same Game Multis’ in 2016 (known as parlays in the US or accumulators in the UK). This innovation gave Sportsbet an almost two-year lead over its competitors. Today, Flutter’s expertise in risk management and trading continues to provide a competitive edge in multis. Multis are a higher margin product, contributing to Sportsbet’s margin expansion throughout Cormac’s tenure.

By the time Cormac left in 2018, Sportsbet’s revenue had grown nearly four-fold to A$766m and EBITDA six-fold to A$262m (34% EBITDA margin).

Sam Swanell

Sam founded Pointsbet in 2015, building the business into a major operator in Australia and taking on the largest global operators in the US when the market opened up in 2018. He ultimately sold the US business to Fanatics in 2023 for $225m (around A$336m). Today, the Australian business has around 5% market share (Australian Financial Review) and is valued at A$150m.

Sam started his wagering career at Tote Tasmania, directing all revenue channels. I met Sam nearly 20 years ago and was immediately impressed, hiring him as the COO of the TomWaterhouse brand in 2009. At TomWaterhouse, Sam was instrumental in rapidly growing the business. In an interview with Gambling Insider, Sam said: “The Waterhouse brand was everywhere and we did some innovative things in terms of integrations.”

Drawing on his experience at Tote Tasmania and TomWaterhouse, Sam launched PointsBet and immediately differentiated the brand on product, with a novel spread betting model (‘points betting’) that gives customers a greater reward if the margin of victory in a game is larger and vice versa.

“I think it really does come down to understanding the market, understanding the consumer and finding a niche,” Swanell added.

Shaq dancing with The Inspired Unemployed for a PointsBet advertisement. Source:

Sam’s ability to quickly gain market share in Australia’s highly competitive environment is an incredible feat and someone with an entrepreneurial approach like him could reinvigorate Tabcorp through technological and product improvements.

Breon Corcoran

Corcoran drove huge success at Paddy Power, Betfair, and then the combined Paddy Power Betfair (leaving before the company’s rebrand to Flutter Entertainment). Corcoran spent 11 years at Paddy Power and was COO for the last 1.5 years. He was then CEO of Betfair for nearly four years. In February 2016, Corcoran was instrumental in the £7bn merger between Betfair and Paddy Power. He was then appointed as CEO of Paddy Power Betfair in 2016, a position that he held for two years. After leaving the company, Corcoran was the CEO of WorldRemit for four years until January this year when he was appointed as CEO of £3bn trading platform, IG Group.

“He is a proven leader of high performing teams within multinational organisations, with an ability to deliver results for all stakeholders,” said Mike McTighe, IG group chair.

While the specific leaders discussed above are not available for the role, finding the right leader for an organisation is the chairman’s most crucial responsibility. If Tabcorp can appoint the right CEO, it has a huge opportunity to leverage its over 800,000 customers and one of the strongest brands in Australia.

For wholesale investors interested in following wagering and gaming industry news and trends, please follow our updates on Twitter (@waterhousevc) or through our website at WaterhouseVC.com

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