tabcorp buying betmakers, and in 2021 betmakers bid 4bn for tabcorp

goldenfinger

goldenfinger

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sitting on this one a fortnight trying to decide if it's as funny as i think it is
2021, betmakers offers 4 billion for tabcorp's wagering and media arm. pulls it when tabcorp demerges the lotteries. five years later tabcorp buys the entire company for 283 million
thats not a decline thats a category being repriced. every independent platform business that raised money on the 2021 thesis has since been bought, recapped or written off 🤔
 
hunter becomes the hunted and all that. couldn't resist, sorry

market cared though, BET popped about 33% on the announcement. 24 cents cash, and the premium depends entirely which outlet you read because they all picked a different reference price. i've seen 41, 45 and a half, and one that just said "more than 40" and gave up
 
currency and which day you anchor to. 24c against the aug 7 close in aussie dollars or the converted usd figures or the vwap over some window nobody specifies. same deal, four answers. 45.5 off the 7 august close is the one i'd use.its the only one where someone actually said what they were measuring against
 
They're the plumbing. Tote pool systems, racing data, pricing feeds, the platform other people's bookmakers run on. You've very likely bet through their infrastructure without their name ever appearing on your screen.
Which is why this deal is more than a small-cap tech buy. Tabcorp runs Sky Racing and holds the Victorian licence for another two decades. Now it also owns the pool systems, and some of those pools serve operators Tabcorp competes with directly.
 
so hang on. if they own the pool system and they're also a book taking bets into that pool, whats stopping them seeing the flow??
im not saying they would. im asking what actually stops it
 
Licence conditions and information barriers, audited by the state racing authorities. That's the formal answer and it's a real one.
The commercial answer is that it doesn't matter whether they would. It matters whether rival books believe they might, because that belief alone is enough to start a migration off the platform. Trust in infrastructure is worth more than the infrastructure.
 
right but audited how often. once a year? because a lot happens in a year. sorry im aware how i sound. i ve been tracking my own numbers on a book i wont name and i ve got a folder of screenshots that says something is off, so im primed for this
 
folder of screenshots is the tell mate, i've had that folder. mine was 2019 and it turned out i was just bad at blackjack

on the actual question though, pool integrity is one of the more genuinely policed corners of this industry, precisely because it's pari-mutuel. everyone in the pool can see the totals move
 
stated reason is modernising the wagering tech stack. tabcorp's words, "leveraging the successful tech transformation of betmakers over the past two years". nobody buys a company to modernise their stack unless the stack is the problem. that sentence is a confession with a bow on it

migration's the hard bit. tote is pari-mutuel with hard settlement at race start and fixed odds is a completely different animal. you have to run both in parallel through the whole transition and pool systems don't fail gracefully, they fail at 2:40 on a saturday with money in them
 
The numbers here are unusual enough to be worth laying out.
  • BetMakers EBITDA: A$14m unaudited, twelve months to 30 June
  • Targeted cost savings: A$30m by end of year two
  • Enterprise value: A$267m
So the synergy target is more than double the earnings being acquired. You're not buying a profit stream, you're buying engineers and code and hoping the integration lands.
Fitch called it credit neutral and said the benefits would be incremental rather than transformational. They also flagged the AUSTRAC investigation as the bigger risk to Tabcorp, which is a polite way of saying the acquisition isn't the thing that decides this company's next two years.
 
my grandad had a TAB slip in his top pocket every saturday of his life. wrote the horse on it in pencil, folded it twice, same pocket
funny to read about the pool systems and the settlement windows and know that on the other end of all that machinery there was an old bloke with a pencil
 
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