How has the Tabcorp share price been performing since the demerger?

It has been almost a month since Tabcorp spun off its lottery business. How has it performed?

| More on:
Two men in a bar looking uncertain as they hold a betting slip and watch TV.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Tabcorp Holdings Limited (ASX: TAH) share price was on form on Tuesday.

The gambling company’s shares ended the day up 1% at $1.06.

What drove the Tabcorp share price higher?

There were a couple of catalysts for the rise in the Tabcorp share price on Tuesday.

One was a rebounding ASX 200 index, which lifted most shares. The other was news that the announcement of wagering tax changes in New South Wales. Tabcorp believes the latter is “a further positive step toward industry reform.”

What’s happening?

From 1 July 2022, New South Wales will increase the Point of Consumption Tax (POCT) rate payable by wagering operators from 10% to 15%.

Tabcorp will receive transition payments over an 18-month period from the commencement of these changes to ensure it is no-worse off relative to its current tax obligations as a result of the changes.

Had these transition payments not been applied, based on Tabcorp’s calendar year 2021 NSW revenues, its EBITDA would have been approximately $16 million lower.

Tabcorp’s Managing Director and Chief Executive Officer, Adam Rytenskild, was pleased with the news but will push for further reforms.

Today is a positive step forward in levelling the playing field in NSW. Online bookies will pay a greater share of wagering tax which can be invested back into the local racing industry and ensures a fairer system.

We welcome the NSW Government’s announcement. Online betting has changed substantially since the TAB’s licences were issued and this is an opportunity to better align with the modern economy. The Queensland Government has recently announced reforms to create a level playing field and NSW is now a step closer to a level playing field.

How have Tabcorp’s shares been performing since the demerger?

Following today’s gain by the Tabcorp share price, it is now trading marginally higher than where it ended the day following the Lottery Corporation Ltd (ASX: TLC) demerger.

On 24 May, the company’s shares closed the session at $1.055 cents, just a touch lower than current levels.

Though, it is worth noting that Tabcorp’s shares continued to slide in the days that followed and closed at 90.5 cents on 1 June. So, anyone buying at that point would have done very well.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A woman shouts through a megaphone.
Share Market News

Earnings preview: Here’s which ASX shares are reporting today

Wondering which ASX companies are releasing results on Friday?

Read more »

A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements
Share Market News

5 things to watch on the ASX 200 on Friday

The ASX 200 looks likely to have a decent finish to the week...

Read more »

A group of happy office workers throw papers in the air and cheer after seeing the Latrobe Magnesium price skyrocket 38%
Share Market News

Here are the top 10 ASX 200 shares today

These ASX 200 shares outperformed all others on Thursday.

Read more »

Three male athletes sprint on an athletics track with the sun low on the horizon behind them representing the race between ASX lithium shares to outperform
Share Market News

Here are the 3 most heavily traded ASX 200 shares on Thursday

Our most traded ASX 200 share today is down by more than 5%.

Read more »

Bear market
Share Market News

Here’s why one big bad bear is suggesting the stock market could crash by 50%

One strategist thinks markets haven't bottomed.

Read more »

Investor sitting in front of multiple screens watching share prices
Share Market News

5 things to watch on the ASX 200 on Thursday

Here's what to expect on the ASX 200 on Thursday...

Read more »

A trendy woman wearing sunglasses is making it rain, spraying cash on that bargain.
Share Market News

Here are the top 10 ASX 200 shares today

It was a great day on the market for these ASX 200 shares.

Read more »

An office worker and his desk covered in yellow post-it notes
Share Market News

Here are the 3 most heavily traded ASX 200 shares on Wednesday

Guess which ASX 200 sector is dominating the market's volume charts today.

Read more »