Key Highlights

• Group EBITDA before significant items was $431.7m, up 10.3%, with Margin up 140 basis points to 16.4%.

• Wagering and Media, which includes TAB retail and digital wagering, Sky Racing and international operations, generated Revenue of $2,454.7m (up 0.7%) and EBITDA of $361.8m (up 9.9%).

• Reported operating expenses rose 0.5% to $700.7m, and underlying costs fell 0.8% after adjusting for the Victorian Licence.

• Net Debt was $533m at 30 June 2026, reported Leverage was 1.2 times against a through-the-cycle target below 2.5 times, and Liquidity was $1,161m.

How far has Tabcorp (ASX:TAH) come in its turnaround, and what does the BetMakers Acquisition add? The FY26 result, released on 26 August 2026 for the year to 30 June 2026, shows Earnings growing faster than revenue, a more encouraging Balance Sheet and a higher dividend, followed by a move into B2B wagering technology. Management says the company is ready to enter the growth phase of its transformation. The numbers support progress, but not yet a finished story.

The central development: earnings up on flat revenue

Group revenue was $2,636.3m, up 0.8%. Group EBITDA before significant items was $431.7m, up 10.3%, with margin up 140 basis points to 16.4%. Net profit after tax before significant items was $71.1m, up 43.6%, and statutory net profit was $46.3m, up 26.5%. Adjusted Earnings Per Share were 5.2 cents, up 33.3%.

Significant items of $24.8m after tax included $12.1m from remeasuring the Victorian Licence funding support liability, $7.6m of transformation costs and $5.1m of transaction costs. The profit growth was cost-led and margin-led rather than revenue-led, which matters for sustainability: cost savings can be exhausted, whereas revenue growth compounds. Management's FY27 operating cost guidance, below, shows how little room it expects to have.

Business and revenue drivers

Tabcorp has two reporting segments. Wagering and Media, which includes TAB retail and digital wagering, Sky Racing and international operations, generated revenue of $2,454.7m (up 0.7%) and EBITDA of $361.8m (up 9.9%). Domestic wagering revenue rose 0.9%, international fell 3.7% (mainly Hong Kong in the second half) and Media rose 1.9% to $377.8m.

Integrity Services, which provides wagering integrity and related services, generated revenue of $181.6m (up 3.3%) and EBITDA of $69.9m (up 12.0%).

The reformed Victorian Wagering and Betting Licence contributed a full year of benefits, plus an extra 1.5 months compared with FY25. Licence Amortisation was $44.3m (FY25: $43.1m).

Cost control and retail renewal

Reported operating expenses rose 0.5% to $700.7m, and underlying costs fell 0.8% after adjusting for the Victorian Licence. Tabcorp has begun rolling out Next-Gen betting terminals and the TAB LIVE in-play product in pubs and clubs in approved states. Phase 1 of a new retail commercial model is implemented, and phase 2 is expected to support FY27 EBITDA.

The point of the retail work is to improve Yield and venue Economics in an area that has been in structural decline against digital channels. The company has not claimed it will reverse that decline, and the first test is whether venue turnover and margin improve in the phase 2 commercial model during FY27. Investors should look for the disclosure of terminal counts, venue participation and retail yield in future results, because those measures show whether the rollout is working beyond the headline EBITDA.

The BetMakers acquisition

On 10 August 2026 Tabcorp announced an agreement to acquire all of BetMakers Technology Group by scheme of arrangement, subject to conditions. It targets pre-tax run-rate cost synergies of $30m by the end of year two, expects the deal to be accretive to earnings per share from year two and double-digit accretive from year three, and estimates pro forma leverage of 1.6 times, assuming 25% scrip take-up and excluding synergies. Completion is targeted for the third quarter of FY27.

BetMakers supplies racing and sports betting technology and content to bookmakers globally. For Tabcorp, the strategic logic is faster product development and international B2B revenue. The risk is that technology acquisitions can be harder to integrate than the cost-synergy model implies, and that customers of BetMakers who compete with Tabcorp may react to new ownership.

Balance sheet and dividend

Net debt was $533m at 30 June 2026, reported leverage was 1.2 times against a through-the-cycle target below 2.5 times, and liquidity was $1,161m. The final Dividend is 1.5 cents per share, unfranked, taking the FY26 dividend to 3.0 cents, up 50%, a 58% payout of adjusted earnings. Unfranked dividends carry no imputation credit, so the after-tax value depends on a holder's circumstances.

FY27 outlook

Management expects domestic wagering turnover growth broadly consistent with FY26, excluding the FIFA World Cup. It expects Operating Expense growth in line with Inflation of 3.0% to 3.5%, Capital Expenditure up to $160m and Depreciation and amortisation of $225m to $235m. Non-deductible items of about $67m should affect tax expense.

Sector and competitive position

Australian wagering is a competitive, heavily regulated market with large corporate bookmakers, including Entain-owned Ladbrokes and Sportsbet (owned by Flutter), taking much of the online growth. Tabcorp's advantage is its retail network, racing media rights and the Victorian licence, while its disadvantage is smaller digital scale. Regulatory change, including Advertising and responsible gambling measures, can reshape margins for all participants.

Risks and what to monitor

- Regulatory: the company says it is cooperating with AUSTRAC during its ongoing investigation; the outcome and any penalty are uncertain.

- International softness: revenue fell 3.7%, driven by Hong Kong.

- Yields: domestic yields were below average in the first half of FY26.

- Approvals: the National Tote launch depends on remaining regulatory approvals.

- Deal conditions: BetMakers completion is subject to conditions, and integration may take longer than planned.

- Cost inflation: opex growth guided at 3.0% to 3.5% could outpace revenue if turnover growth stays modest.

Investors will also want to see whether first-half FY27 earnings show the retail and cost benefits management describes. The next points to watch are BetMakers' scheme timetable, the half-year result in early 2027 and progress on Next-Gen terminals.