Interesting story in the AFR today stating that Tabcorp is taking a look at buying RAS competitor Betmakers
I'm struggling to envision what that might mean for RAS longer-term. TAB has historically had a legacy technology stack that struggles to keep up with the rest of the market. As a famous example, TAB is the main reason the Melbourne Cup has never been able to add emergencies for when a horse is scratched, because TAB betting machines are somehow only capable of handling a maximum of 24 horses and replacing every betting machine nationwide would supposedly be too costly.
So theoretically, TAB would be buying Betmakers mostly to improve their own back-office technology, but you do wonder whether having a proper corporate marketing behemoth behind it might add some oomph to Betmakers sales pitch? RAS and Betmakers are sometimes a complementary software offering and sometimes competitors, with Betmakers specialising in Totaliser products and RAS specialising mainly in betting data, but it's not hard to see RAS moving into totaliser products after reportedly losing the Stake contract mainly for that reason. Similarly if TAB goes ahead with a Betmakers takeover, that would open up Betmakers to a whole new world of data opportunities I would think.
Will be following the story closely.
-------------------------------------------------------------------------------------------------------------------------------------------------------------------
https://www.afr.com/street-talk/tabcorp-boss-gill-mclachlan-weighs-m-and-a-punt-on-smaller-rival-betmakers-20260210-p5o16y
Tabcorp is in high-level discussions with the chairman of BetMakers about a takeover of the ASX-listed wagering technologies group.
The talks between Tabcorp chief executive Gillon McLachlan and BetMakers chairman Matt Davey started just before Christmas and are informal, people briefed on the situation who requested anonymity given the sensitive nature of the discussions said. Barrenjoey Capital Partners is advising Tabcorp on the deal, which has been dubbed Project Wattle internally. BetMakers has been code-named Banksia by Barrenjoey.
McLachlan did not respond to requests for comment on Wednesday.
Tabcorp would hope buying BetMakers and its technology will help the ASX-listed bookmaking giant solve some of its own platform issues, deliver significant synergies and turbocharge nascent business-to-business operations.
Of note, McLachlan and Davey are yet to land on a price or deal structure. Tabcorp, advised by Barrenjoey’s Matthew Grounds, is weighing up two options: putting in a formal offer before BetMakers’ upcoming results, or keeping its powder dry until results land and moving if the share price falls.
Brokers noted to Street Talk that BetMakers has a market capitalisation of $230 million, and would be unlikely to strain Tabcorp’s balance sheet given the material improvement in its debt position over the past 18 months.
Tabcorp’s leverage levels – net debt to earnings – fell to 1.6-times at June 30, well below a ceiling of 2.5-times. It had $609 million in net debt at the time, as well as undrawn facilities and unrestricted cash of $803 million.
In November, it made the most of its improved debt position to raise $300 million via a 5.5-year note. The debt restructure left Tabcorp with $980 million headroom, according to estimates from Macquarie analysts.
Disc - Held in RL & SM
