Chaos as Tabcorp’s systems crash
Tabcorp, the wagering giant and biggest single financial contributor to Australia’s racing industry, last night would not be drawn on whether the company would pay compensation to the sport’s governing bodies after a significant failure of its betting systems yesterday caused chaos to meetings around the country.
On one of the biggest race days of the year, Mackinnon Stakes (Gr 1, 2000m) day at Flemington which coincides with the Golden Gift (1100m) meeting in Sydney, Tabcorp’s wagering network crashed just after 11am (ADST), bringing the pari-mutuel pools and the organisation’s fixed odds betting to a standstill nationwide and having wide-ranging ramifications for the thoroughbred industry.
The TAB “blackout” is likely to have cost tens of millions of dollars in lost turnover due to the outage.
Tabcorp blamed a major power disruption at one of its external data centres where its servers are housed as the cause of the “technical issue”, which also impacted its Keno and gaming products. The problem was expected to have been rectified by late last night, but when ANZ Bloodstock News went to press many users were still claiming to have difficulty in accessing the site, well after the main thoroughbred race meetings had been completed.
Corporate bookmakers were also caught up in the outage, with many operators unable to “result” the races as the data feed was reliant on the Tabcorp system. Some corporates also removed the popular totaliser derivative products such as best tote and exotic bet types.
Betfair was able to continue operating as the betting exchange was able to manually “result” races. On-course totaliser betting, which uses an independent system, at venues such as Rosehill continued unaffected.
As a result of the drama, administrators from around the country grappled with what to do with their race meetings in the knowledge that betting turnover – and returns to the industry – would take a hit as a result of the outage.
The meeting at Rosehill was pushed back while Wyong was also delayed. Flemington, which was hosting two Group 1 races, continued on schedule until after race four when the Victoria Racing Club and Racing Victoria reacted by delaying the remaining races by about 45 minutes.
The metropolitan meeting in Brisbane was also delayed while Thoroughbred Racing South Australia took the dramatic decision to postpone its meeting after race two. The remaining seven races will now be held tomorrow.
“Tabcorp wishes to apologise to our customers, the racing industry, venues and other partners for the issues being experienced in the delivery of our products and services today,” Tabcorp’s managing director and chief executive David Attenborough said in a statement.
“We appreciate the importance of today’s race meetings, especially at Flemington and Rosehill Gardens, and are disappointed that we have been unable to give customers the experience the day deserves.
“We would like to acknowledge the support of our racing industry partners for continuing to help us to manage through the day, including those racing bodies who have been able to push back their race start times.”
ANZ Bloodstock News asked a Tabcorp spokesman whether principal racing authorities were in line for compensation but he said it was too early to determine any financial ramifications from the outage.
The Sydney race meeting was already facing a year-on-year decline in betting turnover due to a rain-affected track and fields decimated by scratchings. The corresponding Rosehill meeting in 2019 was run on a good surface.
The TAB IT disaster comes as speculation mounts that private equity firms are circling Tabcorp in a takeover bid for the beleaguered wagering arm of the business. Tabcorp has publicly denied firms were intending to make an offer for the company.
Tabcorp holds exclusive retail wagering rights in Australian states and territories – Western Australia’s is still state-owned but its pari-mutuel pools co-mingle with Tabcorp’s SuperTAB – while the licence in Victoria is up for renewal in 2024.
Yesterday’s debacle could also further strain the relationship between Tabcorp and Racing Victoria, who are eight years into the 12-year joint venture for the state’s retail and tote wagering rights.
The popularity of totaliser betting, the main revenue stream for the racing codes for many decades, has declined for many years as customers migrate to Tabcorp’s fixed odds betting product and that of rival online operators which have been able to offer lower margin betting options such as best tote.
The latest setback for Tabcorp, which comes as the company suffered revenue shortfalls as a result of Covid-19 retail closures and the abandonment of many sporting competitions, is likely to increase the pressure on management which this year has already seen chair Paula Dwyer announcing that she would leave the board on December 31.
Attenborough will also leave the company next year after ten years with the company.