TABCORP 2019 MACQUARIE CONFERENCE 3 0 A P R I L 2 0 1 9 E X C I T E M E N T W I T H I N T E G R I T Y
AGENDA Item Slide Group Overview & Industry Context 3 Lotteries & Keno 11 Wagering & Media 16 Gaming Services 21 Conclusion 25 2
GROUP OVERVIEW & INDUSTRY CONTEXT
TABC OR P IS AU STR ALIA’S LEAD IN G D IVER SIFIED GAMBLIN G EN TERTAIN MEN T GR OU P KEY FINANCIAL METRICS (CY18) VISION: THE TRUSTED GAMBLING ENTERTAINMENT COMPANY ~$5.2B ~$1.0B o Tabcorp completed its combination with Tatts Group in 6% Gaming Services December 2017, creating a world-class gambling 14% entertainment group o We operate a diversified set of market-leading businesses, Wagering & Media 45% under a series of long-dated government-issued licences and 43% authorisations o We offer a unique combination of products and systems, and provide an excellent digital customer experience, integrated into an unrivalled network of 9,000 retail points of presence 49% Lotteries & Keno o We are a valuable long term partner to governments, the 43% racing industry and our retail network o At our core is a commitment to responsible gambling Revenue EBITDA 4
TH E AU STR ALIAN MAR KET IS LAR GE AN D GR OW IN G AUSTRALIAN GAMBLING EXPENDITURE BY PRODUCT SEGMENT $23.7B $23.6B $22.7B 0.3 0.4 $21.2B 0.3 $20.7B 2.0 2.2 $19.4B 0.3 CAGR FY12-17 2.0 0.3 0.3 2.0 TOTAL 4.1% 2.2 3.9 4.4 3.6 1.8 KENO 4.6% 3.4 3.2 3.0 LOTTERIES 2.5% 5.2 4.8 5.2 4.4 WAGERING 7.7% 4.1 3.7 CASINO 5.3% EGMs 2.7% 12.1 12.1 Keno Lotteries Wagering 11.6 11.1 10.8 10.6 EGM’s Casino FY12 FY13 FY14 FY15 FY16 FY17 Source: Australian Gambling Statistics 34 rd Ed. 2018 5
W E PLAY AN IN TEGR AL R OLE IN OU R IN D U STRY C R E A T I N G V A L U E T H R O U G H C O L L A B O R A T I O N : I N D U S T R Y & G O V E R N M E N T ( C Y 1 8 ) 1 E X A M P L E ~$2B Federal Taxes ~$1B Sports and charity raffle backed by Tabcorp’s Charitable Games unit o State ~$0.8B Wagering o Partnership with Sport Australia, the Australian Sports Foundation and / Lotteries the 50-50 Foundation Taxes o 100% not-for-profit raffle raising funds for charities and grassroots sport across Australia (ex WA and NT) o An efficient platform which helps not-for-profit organisations raise funds at no cost Commissions to Racing & sports State & Federal o local business industry payments Govt taxes A way of Tabcorp using its skills and resources to support charities and grassroots sport Note: 1 All figures include 100% of VICTAB JV 6
AT O U R C O R E IS A C O MMITMEN T TO R ESPO N SIBL E G AMBL IN G Responsible Gambling (RG) involves the conduct of gambling in a manner whereby the potential for harm associated with gambling is minimised FY19 initiatives o Introduction of Take A Break for TAB o New RG micro-site to improve customer experience and knowledge of our harm minimisation tools as well as how to seek help, if necessary o National Consumer Protection Framework implementation in progress o Retail network supervision enhancements Ongoing and planned operational improvements o Tracking enhancements (AI) including real-time filters and further automated customer intervention o Further improvements to self-service harm minimisation tools (e.g. additional TAB Take A Break options) and simplified online customer experience 7
OU R BU SIN ESS IS D IVER SIFIED AC R OSS GEOGR APH IES AN D PR OD U C TS AN D SEC U R ED BY LON G - D ATED LIC EN C ES 1 TABCORP LICENCE / AUTHORISATION PORTFOLIO NSW 2097 NSW 2050 VIC 2024 VIC 2022 WAGERING QLD 2098 KENO QLD 2047 SA 2100 SA 2052 TAS 2062 ACT 2064 ACT 2064 NT 2035 NSW 2050 NSW 2032 VIC 2028 4 QLD 2027 3 LOTTERIES SERVICES QLD 2072 GAMING 4 NT 2021 SA 2052 2 TAS 2020 ACT 2050 2032 NT Notes: 1 Ordered by population 2 Tasmania lotteries operate under renewable five-year permits linked to Victorian (2020) and Queensland (2023) licences 3 Monitoring Licences only 8 4 Indefinite rolling renewal capability
R EGU LATORY C H AN GES SU PPORT A MOR E SU STAIN ABLE IN D U STRY SYNTHETIC POINT OF CONSUMER PROTECTIONS ADVERTISING RESTRICTIONS LOTTERIES BAN CONSUMPTION TAXES o Synthetic lotteries are products o Wagering point of consumption o From March 2018, new o Amendments to Australia's taxes are levied based on where customers bet on the restrictions prohibited gambling gambling legislation have been the location of the customer and outcome of a lottery rather than advertising during live television, introduced or proposed to commenced: buying a ticket and directly radio and online sports broadcasts improve consumer protection participating in the draw between 5:00am and 8:30pm. ✓ 1 July 2017 in SA o These include prohibitions on Live broadcasts of racing events o Synthetic lottery and Keno wagering operators offering online and the advertising of lotteries ✓ 1 October 2018 in products prohibited since 9 in-play betting, credit and certain are exempt Queensland January 2019 forms of inducements ✓ 1 January 2019 in NSW, o The prohibition of wagering Victoria, ACT and WA advertising on roads, public transport and associated infrastructure in Victoria has also been implemented o Enhanced restrictions on inducements in NSW 9
EAC H BU SIN ESS IS W ELL POSITION ED FOR LON G - TER M PR OFIT GR OW TH L O T T E R I E S A N D K E N O W A G E R I N G A N D M E D I A G A M I N G S E R V I C E S o Tabcorp’s unique combination of assets creates o Focused on unlocking further upside from o Unique opportunity to be services partner of developing a contemporary retail footprint an increasingly differentiated customer choice for gaming venues with a technology experience and service proposition platform that connects suppliers, regulators and o Digital growing strongly and supports increased venues o Focus on driving integration and brand engagement with new and existing customers migration from UBET to TAB and delivering o Combination of MAX, TGS and eBET has o Proven track record in game portfolio superb experience and products across all created opportunity to consolidate and refresh management and innovation states branding o Keno to benefit from scale and expertise from o Media remains an important differentiator with a o Good progress on managing extension of key integration with Lotteries focus on expanding, innovating and contracts in the near term o Ban on synthetic lottery and Keno betting from modernising the experience o Role as government-licensed monitor partially January 2019 enhances regulatory certainty o Introduction of POCT, ban on online in-play mitigates inherent category regulatory risk betting on sport and offer of credit by operators, and changes to advertising laws create a more sustainable industry 10
LOTTERIES AND KENO
LOTTERIES AND KENO - SCALE, BROAD APPEAL, WIDELY ACCEPTED $ 2 . 5 B R E V E N U E ( C Y 1 8 ) $ 4 4 7 M E B I T D A ( C Y 1 8 ) L O T T E R I E S T U R N O V E R B Y P R O D U C T - C Y 1 8 ( $ B ) 3.0 1 1 LOTTERIES 3,700+ OUTLETS KENO 3,600+ OUTLETS Other Set for Life 2 2 2.0 LOTTERIES 472M TICKETS KENO 106M TICKETS Instants Oz Lotto 2.98M ACTIVE REGISTERED 38K ACTIVE REGISTERED 1 1 CUSTOMERS CUSTOMERS 1.0 Sat, Mon/Wed Powerball Notes: 12 1 As at 31 December 2018. Active customers are measured on a rolling 12 month basis 0.0 Base Games Jackpot Games 2 12 months ended 31 December 2018
WE HAVE A CLEAR SET OF PRIORITIES TO CONTINUE TO DRIVE PROFITABLE GROWTH SUPERB BRILLIANT COLLABORATIVE CUSTOMER LED EXPERIENCES EXECUTION PARTNERSHIPS Enhanced digital app and Development of new retailer remuneration model Relaunched Powerball social media engagement EXAMPLES 13
C U STOMER - LED GAME IN N OVATION o Powerball game changes are delivering: J A C K P O T P E R F O R M A N C E ( P O W E R B A L L & O Z L O T T O ) New customer acquisition – from bigger jackpots, more o often 70 More winners overall (up c.55-75%) – from additional o 41.0 $37.8m prize division 36.0 60 o Increased brand awareness, purchase intention and $28.8m 31.0 $28.4m 50 belief in winning Model expectation is $24.2m 26.0 now 38 (was 31) 6 40 o Number of actual large jackpots to date has already reached 21.0 11 full year model (theoretical) outcomes 16.0 30 2 4 o Powerball game change should lift number of large 11.0 20 39 ($15m+) jackpots from 16 to 23 p.a. based on model 6.0 29 28 28 outcomes 10 1.0 - actual 10 months to 30 April 2019: 23 0 -4.0 FY16 FY17 FY18 FY19 YTD o Oz Lotto expected to deliver 15 large jackpots p.a. based Number of jackpots $15M - $49M Number of jackpots $50M or more on model outcomes Average value of jackpot offer at $15M or more - actual 10 months to 30 April 2019: 16 14
AC C ELER ATED D IGITAL GR OW TH AN D EN H AN C ED C U STOMER EN GAGEMEN T D I G I T A L S H A R E O F T U R N O V E R Digital up 64% in 1H19 – now represents 21.5% of o Lotteries turnover o Investing in superb digital experiences o Significant investment in digital platforms (thelott.com, app) and fully integrated marketing campaigns o Building stronger integration between retail and digital experience o Collaborating with our retail partners New retailer remuneration model 1 seeks to o align retailers with the ongoing digital opportunity Notes: 1 Subject to regulatory approvals will be implemented from 1 July 2019 in all Tabcorp operated markets other than SA 15
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