Tabcorp to Sell eBet to Former Execs for $41M

Posted on: September 21, 2022, 10:17h. 

Last updated on: September 21, 2022, 05:00h.

Tabcorp continues to reshape its organization as the Australian gaming company transitions into the next phase of its existence. The latest move involves the sale of its eBet subsidiary. But it didn’t have to look far to find a buyer.

A horse race banner hangs on the wall inside a Tabcorp office. The Australian gaming company is selling another division as it continues to transform its operations. (Image: Getty Images)

The company announced this week that it’s selling the loyalty and tracking systems provider for AU$62 million (US$41.5 million). Purchasing the company, which serves gaming properties in New South Wales (NSW) and Victoria, is Venue Digital Technology Pty Ltd, which former Tabcorp executive Frank Makryllos founded.

Tabcorp is currently breaking up the company, splitting off The Lottery Corporation from its wagering, media, and gaming services arm. It announced last month that it was in the market to sell eBet and that it already had a potential buyer in place.

In its most recent financial health report, eBet reported EBITDA (earnings before interest, taxes, depreciation, and amortization) of AU$4.4 million (US$2.92 million). That was for its fiscal year, which ended on June 30. In the second half, it recorded EBITDA of AU$3.2 million (US$2.13 million).

eBet serves around 525 gaming properties in NSW and Victoria, according to the Australian Financial Review. Its solutions link around 58K gaming machines, offering an array of services so operators can monitor their operations.

Relying On Old Friends

Based on the reported sales price and not the revenue Makryllos sees a potentially strong future for the company. He’s not wrong, as Victoria, Tasmania, and other Australian states are set to introduce cashless gaming.

The former Tabcorp exec is ready to dive in. He said in a statement that eBet will reorganize its focus to concentrate on gaming venues and introduce new products going forward. Regulators have to approve the sale first, however. That is currently in the works, and Tabcorp expects to be able to finalize the transaction sometime early next year.

If the deal falls apart, Tabcorp could still come out ahead. It could receive between AU$3 million and AU$10 million ($2 million to $6.7 million) for cancellation, depending on the reason.

From 2006 to 2012, Makryllos led Tatts Pokies, a part of Tatts Group, which Tabcorp acquired in 2017. Then, from 2013 to 2017, he was back at Tatts Group again, leading other divisions of its gaming operations. The following year, he moved only a few feet away, becoming the managing director of Tabcorp’s Max B2B gaming services company.

Tabcorp Taps Tasmania

Tabcorp is now expanding its operations in Tasmania through Max. The company announced that it has received a Tasmanian Monitoring Operator Licence from regulators, which will give it additional access in the state. This is in addition to the gambling options Tabcorp provides.

Beginning next July, Max will monitor all electronic gaming machines in Tasmania’s bars and clubs. It made its announcement just ahead of the state government’s update that it is introducing new gambling regulations.

Max is paying AU$2 million ($1.34 million) for the license. It is also paying another AU$1 million ($669,000) as a grant. That money will be used to fund responsible gambling programs in the state.