In a recent announcement, Tabcorp's leadership shared insights about the company's acquisition of BetMakers, describing it as the “cheapest and most efficient” strategy to reformulate its technology framework. This acquisition sees Tabcorp acquiring 100% of BetMakers’ shares for AU$0.24 (US$0.17) each, which estimates BetMakers' overall worth at around $283 million, with an enterprise value close to $267 million.
Tabcorp anticipates annual cost efficiencies reaching up to $30 million by the end of the second year following the acquisition. These savings are expected to surface primarily from the integration of BetMakers’ superior product offerings, optimizing data centers, consolidating contracts, and refining corporate and support operations.
During the analyst call, CEO Gillon McLachlan pointed out that the choice of BetMakers was significantly driven by the projected cost synergies. This acquisition presents a quicker and more economical solution compared to a gradual, in-house upgrade of Tabcorp’s outdated technology framework.
CTO Robert Fraser emphasized the advantages of BetMakers’ cloud-native and resource-efficient technology platform, which is already achieving profitability and carries a lower execution risk than internal modifications would entail. He noted that Tabcorp has accumulated considerable legacy technology, including a diverse mix of on-premises and cloud-based infrastructures across data centers and multiple third-party services.
Fraser commented, “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.” CFO Mark Howell echoed him, stating, “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 modernise the tech stack.”
Incorporating BetMakers’ technology, Tabcorp aims to develop an integrated, end-to-end solution that combines racing media, data, wagering technology, and tote services, targeting international markets. BetMakers’ racing data will enhance Tabcorp’s Sky Racing media coverage, allowing for refined data analysis, according to McLachlan. “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,” he added.
Fraser highlighted, “A lot of the capability that we like in BetMakers is around the customer intelligence data capabilities and content and experience capabilities, including some of the media capability they’ve got.”
The Tabcorp executives plan to accommodate the integration process by retaining pivotal BetMakers executives, while noting that most of the technology team at Tabcorp will be newly appointed. Fraser will head this new technology team. McLachlan assured, “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.” He underlined that many team members involved in this merger have substantial familiarity with the systems and requirements involved.
He also expressed enthusiasm about welcoming talent from BetMakers, especially those at the forefront of AI adoption. “They’re proven in digital transformation and we’ll harness that capability. Their focus on being lean and efficient and fast aligns with the culture that we are building at Tabcorp,” McLachlan added.
