The Tabcorp Holdings Ltd (ASX: TAH) share price is taking a beating on Thursday.
In morning trade, the ASX 200 gambling company's shares were down as much as 12% to a 52-week low of 86 cents.
Tabcorp's shares have recovered a touch since then but remain down 7% at the time of writing.
Why is this ASX 200 share being hammered?
Investors have been hitting the sell button today following the release of the company's first-quarter update.
According to the release, for the three months ended 30 September, Tabcorp's revenue fell 6.1% compared to the prior corresponding period. This reflects a 5.4% decline in wagering and media revenue and a 12.7% fall in gaming services revenue, which offset modest digital wagering growth.
Management blamed the softer performance partly on the adverse impact of lower fixed odds yields due to Racing and Sports results. Fixed odds yields were 14.8% compared to 15% in the prior corresponding period and the preceding three-year average of 15.6%.
In respect to gaming services revenue, its decline was primarily driven by the removal of eBet revenue post the sale of the business in February and lower contracted EGMs.
The ASX 200 share's CEO, Adam Rytenskild, was pleased with the company's performance in a soft trading environment. He said:
Given the softer trading environment, I'm pleased we grew digital wagering turnover, which highlights that customers are responding to our new digital customer offering. We continue to be relentless in the way we execute our TAB25 strategy and remain focused on making the right decisions for the long-term success of the business.
Rytenskild also revealed that he is optimistic on the future thanks to the company's transformation. He concludes:
We're in the midst of implementing significant change as a company and industry. Our strategy is on track as level playing field and licence reforms commence, our customer reputation grows, and cost base reduces. Our transformation continues at pace and I am confident we will deliver the value laid out in our TAB25 Strategy.