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Tabcorp to Pursue Demerger Plans

Tabcorp has posted a drop of almost eight percent in gaming revenue from its Treasury Brisbane gaming facilities during the 3rd quarter after the floods in January 2011 made access impossible for players while horse race wagering revenue also suffered because of the floods. The 7.6% drop in earnings at Treasury to sixty-one million dollars for the quarter was the only negative aspect in an excellent quarter when the gaming group ignored the weak player spending to post a 5.4% improvement in gaming earnings to $1.06 billion dollars. CEO Elmer Funke Kupper said on April 14th, 2011 that the pace of the growth of their gaming revenue had increased since the 1st part of the financial year, when company revenue improved by 3.3% to $2.26 billion dollars. Funke Kupper said that what they have experienced in the 3rd quarter was the improvement in revenue surpassed the 1st half. He said that it clearly shows that the strategies that they are using are appropriate. Funke Kupper said that they are relieved that only their gaming operation in Brisbane was affected. He added that their operation in the area is now back to normal and their other gaming facilities in Queensland posted good results.

Jupiters Townsville and Gold Coast gaming facilities posted revenue improvement of 4.1% and 9.1% respectively, while the Star City gaming facility in Sydney, Australia, the group's largest casino facility, posted an 11.3% improvement to $207 million dollars despite renovations due to VIP players from abroad.

Tabcorp's betting division posted earnings of $402 million dollars, which improved by 2.6% as the dismal weather in January 2011 and February 2011 resulted in numerous horse race cancellations and cut back the amount of horse participating in races that pushed through.

Citigroup analyst Jenny Owen said that the postponed horse races in Queensland caused Tabcorp's betting turnover to drop by $81 million dollars in January 2011 and February 2011, as only 194 horse races were held.

Tabcorp's gaming division posted an 8.6% improvement in gaming revenue to $303 million dollars, pushed by a 16% improvement in keno earnings to $43 million dollars, due to improvement in distribution and the launch of self-service terminals.

The game of keno appears to be the new engine of growth for Tabcorp after the government of Victoria approved a ten-year monopoly license to the company to offer keno gaming in the area beginning in April 2012.

Elmer Funke Kupper said that the all of their gaming divisions were doing well as the organization diligently prepares for the demerger of its casino gaming division from its keno, betting and gaming divisions. He said that their preparation for the demerger is going smoothly and they are expecting their shareholders to vote on the issue in June 2011.


Ann Pettersson
07/06/2011 08:58 PM