Tabcorp to dabble in social betting with new investment

Tabcorp Holdings is tipping $33 million into social betting group Dabble Sports Pty Ltd in a bid to expand its younger customer base, just weeks offloading its gaming systems arm eBET.

Under the terms of the deal, Tabcorp will acquire 20 per cent of Dabble, giving it the right to appoint a director to its board, subject to the probity and Northern Territory Racing Commission approval.

More than 150,000 punters have flocked to Dabble since it was founded by former Pointsbet and CrownBet executive Tom Rundle in 2020. The group integrates wagering with the ability to copy bets placed by friends or those a user follows. It is licensed in Darwin.

Tabcorp is banking on its new digital strategy to usher a new era of growth following the $11 billion demerger with former cash-cow The Lottery Corporation last year. The Dabble investment follows the sale of loyalty tracking platform eBet for $62million to former group executive Frank Makryllos in September. The punt on Dabble is Tabcorp’s latest attempt to claw back market share from its increasingly dominant sports booking rivals like Sportsbet

Tabcorp chief Adam Rystenskild said the move is designed to capitalise on Dabble’s appeal to a younger audience that make up 80 per cent of its customer base. The company unveiled its long-awaited app for its 783,000 digital bettors last month in time for Sydney’s spring racing season. Tabcorp will be the naming rights sponsor of New South Wales’s spring racing highlight the Everest Cup for the next three years as part of an extended partnership with the Australian Turf Club that spans 18 years. (edited)

The group has also committed to integrating a same-race multi offering and social betting platform before Christmas, following in the footsteps of Sportsbet and Ladbrokes’s socially geared sites.

A recent Taylor Collison analyst note said Dabble was one of the most downloaded wagering apps outside big-name groups including Tabcorp and Sportsbet in August and the beginning of September.

“We continue to see this segment of the market growing over the next 24 months,” equities analyst Andrew Orbach wrote in the note, adding fledgling betting groups make up about 11 per cent of overall betting app downloads in Australia and Dabble accounted for almost 80 per cent of the 21,000 downloads in this category in August.

Tabcorp swatted away a $3.5 billion takeover approach from Ladbrokes’ owner Entain last year. The ASX-listed company is valued at $2.1 billion and it remains to be seen whether Entain will return for another tilt.

In May, Goldman Sachs analyst Desmond Tsao downgraded Tabcorp from ‘neutral’ to buy’, with a 12-month target price of $1.07 a share. Tabcorp shares are currently trading at 94 cents.

In July, Macquarie analysts raised their 12-month projection on Tabcorp from $1.05 to $1.20 and upgraded Tabcorp to a ‘buy’ rating after the group’s tax win in Queensland and new digital strategy reveal.