What happened to Tabcorp’s share price?
Shares of Tabcorp Holdings [ASX:TAH] lost 4.28% on Tuesday, closing at $4.25. This was the biggest loser out of the top 200 ASX listed stocks.
What’s going on with the TAH Shares?
Tabcorp’s stock is down more than 11% since the start of the year. And over the last 12 months the stock is showing a loss of 0.7%. In other words, it’s done absolutely nothing.
Considering the company is trying to take over Tatts Group [ASX:TTS], you would have expected the market to be a little kinder to the company. But the plummeting price is due to Crown Resorts sealing a major deal with pubs and clubs of NSW to get their online betting, CrownBet, into the heart of TAB outlets in the very same pubs and clubs.
What now for Tabcorp Holdings Ltd?
This is actually a very strategic and smart move from Crown Resorts, which could spell major trouble for Tabcorp. You see, by aligning with the pubs and clubs of NSW, Crown Resorts will enable gamblers to use their online betting offering, CrownBet, while in those pubs and clubs. Many of these venues have TAB machines in them.
Also, the pubs and clubs will take a commission from the bets placed through CrownBet while in the venue. This all means a push towards CrownBet, away from the long established TAB outlets. And that’s big trouble for Tabcorp.
Not only will this potentially see Tabcorp revenues fall, it could also threaten the takeover of Tatts. And going forward, Crown Resorts can sign similar deals with other pubs and clubs throughout Australia. It could very well mean lights out for Tabcorp.
Long term, this might just be one gamble too many for the $3.55 billion Aussie wagering giant.