During a conference call with analysts following Tabcorp's announcement to acquire BetMakers, the Australian gambling company’s executives characterized the deal as the most cost-effective and efficient option to overhaul their technology infrastructure.
Tabcorp has acquired all BetMakers shares at AU$0.24 (US$0.17) per share, giving BetMakers a total valuation of nearly $283 million and an enterprise value of around $267 million.
The company anticipates realizing up to $30 million in annual cost synergies by the second year after the acquisition, primarily through technology improvements. These savings will result from integrating BetMakers’ advanced product offerings, optimizing data centers, consolidating contracts, and enhancing corporate support functions.
Tabcorp CEO Gillon McLachlan emphasized that the choice of BetMakers over developing in-house technology was driven by the potential for cost savings. He noted that this acquisition serves as a speedier and more economical pathway to modernizing Tabcorp’s outdated technology systems compared to a complete internal overhaul.
Chief Technology Officer Robert Fraser pointed out the advantages of BetMakers’ cloud-native, asset-light technology platform, which is already profitable and presents lower execution risks than Tabcorp's internal transformation efforts. He elaborated that Tabcorp has accumulated significant legacy technology involving a mix of on-premises and cloud-based data centers alongside various third-party services.
Fraser stated, "The cost synergies will be delivered with BetMakers much faster and cheaper than we would be able to do ourselves. And that’s borne out of some detailed analysis of the alternative options as well."
Financial Chief Mark Howell added, "It was sort of the cheapest and most efficient way home and, in our view, was also the lowest risk option we had ahead of us to modernize the tech stack."
As part of the acquisition, Tabcorp intends to utilize BetMakers’ technology and distribution channels to establish a comprehensive offering merging racing media, data, wagering technology, and tote services, with a focus on reaching international markets. McLachlan explained that BetMakers' racing data solutions would enhance Sky Racing’s media coverage with improved data analysis.
He noted, "Ultimately, what we’re talking about is having a full suite of vision, data, technology and wagering services, having them end-to-end and distributed to every significant territory in the world. [BetMakers] has complementary assets and the timing and exact opportunity in each market will differ."
Fraser added, "A lot of the capability that we like in BetMakers is around customer intelligence data capabilities and content and experience capabilities, including some media capability they’ve got."
The executives plan to focus on retaining key personnel from BetMakers during the integration process, although the technology team at Tabcorp will mostly consist of new hires, headed by Fraser. McLachlan commented, “We’ve got a team that’s clear. Their targets are established, and we’ve got a structure in place that we think will see us through.”
Fraser mentioned that many from the integration team had prior involvement in the demerger process, ensuring they have a thorough understanding of the systems involved.
McLachlan expressed enthusiasm for the expertise that BetMakers’ team members, especially those involved with early AI adoption, will bring to Tabcorp. He stated, “They’re proven in digital transformation and we’ll harness that capability. Their focus on being lean, efficient and fast aligns with the culture we are building at Tabcorp."
