Tabcorp to waive Sky Channel fees in pubs and clubs to fend off rivals

Tabcorp will waive up to $50 million in revenue by giving pubs and clubs free access to its Sky Racing channel as part of a push to claw back market share from rival corporate bookmakers.

The wagering giant charges about 4875 pubs and clubs across the country about $12,000 a year to stream the Sky Racing channel, which shows thoroughbred, harness and greyhound racing. But some venues are questioning the value of the subscription with many high-profile races available on free-to-air.

Tabcorp is also facing increased competition from online rivals, including Ladbrokes owner Entain, which is embarking on an aggressive advertising campaign in NSW pubs.

It has decided to remove the fees for Sky Racing for pubs in Queensland, Tasmania and the ACT by December after governments in those jurisdictions committed to change the way gambling is taxed.

Tabcorp has long bemoaned a system that means it pays higher taxes than some of its competitors and has long been lobbying state governments to introduce a point of consumption tax to “level the playing field”.

Australian Hotels Association chief executive Stephen Ferguson has advocated for the eradication of the Sky Racing fee for years, arguing that about 40 per cent to 60 per cent of AHA members stream the channel at a loss.

“Not that the racing industry pays much attention to us, but we’re a massive part of their supply chain and allowing free-to-air channels to stream events like the Melbourne Cup means we’re disadvantaged,” Ferguson said.

Tabcorp has historically been taxed double the amount of its corporate rivals in states with a low point of consumption tax due to funding models struck when the bulk of punting took place in physical TAB outlets. As online bookies such as Sportsbet have become more prominent, more states have agreed to lift their point of consumption taxes to 15 per cent to 20 per cent accordingly.

The remaining states will have the Sky Racing fee discounted by 25 per cent from January 1. The discount will increase to 50 per cent next June before it’s waived in July 2024. The end date will be brought forward if the remaining states increase the tax earlier.