The weekend is a key couple of days for betting companies. Punters all over Australia like a flutter on horse racing and football matches around the world. TAB customers were unable to place a single wager on Saturday as the TAB nationwide network went offline.
TAB is investigating exactly what happened to cause their network go offline over the weekend. There is never a good time for a gambling company to go offline, especially not at the weekend. Gamblers couldn’t place any wagers for most of the weekend, which resulted in masses of lost revenue. The Daily Telegraph estimates TAB lost $120 million in wagering turnover this weekend.
Everything was working fine until 11:00 on Saturday before a major computer crash occurred. It was possible to access the TAB website but it was impossible to place any bets. A simple test banner on the website read: “Betting is currently unavailable. We apologise for any inconvenience.”
The lack of a thorough explanation resulted in hacking rumours circulating on social media. TAB poured cold water on those claims quickly. It blamed a potential fire at one of its data centres. The issue knocked out sophisticated back-up systems, too.
TAB Releases Two Statements
The gambling giant released a statement on November 7 apologising to its many customers.
“Tabcorb wishes to apologise to our customers, the racing industry, venues, and other partners for the issues experienced in the delivery of our products and services today. 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.”
The blackout cost the racing industry an estimated $10 million in betting revenue. This at a time where the gambling industry struggles against the COVID-19 pandemic.
A second statement hit the public domain on the evening of November 8. It revealed the technical issues impacted the company’s TAB, Keno and Gaming Services.
Keno retail services became later on November 7 but TAB and Keno digital not until 15:00 on November 8. The company explained its initial findings and ruled out a cyber attack.
“Based on a preliminary assessment, a smoke and likely fire incident at a third-party managed data centre resulted in extensive damage to Tabcorp’s servers and associated infrastructure. Also, There is no evidence of any potential cyber security issues or customer data breaches.”
A Challenging Time For the Gambling Giant
The Australia-wide outage is a major blow to Tabcorp who are struggling already. Tabcorp laid off 700 employees in April in an attempt to trim operating costs. COVID-19 related lockdowns hit Tabcorp hard. Other Australian businesses are in the same boat.
CEO David Attenborough took a 20% pay cut with his board of directors doing the same.
The gargantuan cost of the COVID-19 pandemic became apparent in August. Analysts wrote off $1 billion from the value of TAB. The write-off came from the company’s enormous goodwill.
TAB has not announced its latest financial results but they’re expected to be poor. Furthermore, the company warned a 31% reduction in profit, putting net profit between $267-273 million. This outage will affect that figure, obviously.
It will be interesting to see how investors and trader react to TAB going offline. Shares surged on November 6 from $3.53 to $4.10, a 15.82% increase. This happened after The Australian reported a potential $9 billion takeover of the entire company. Other reports suggest a private bidder is prepared to pay $3 billion Tabcorp’s betting business. The company denied any such interest.
Many experts and analysts believe Tabcorp is moderately undervalued in its share price. Shares traded at $7.62 each in April 2007 and has a target of $5.19. A $9 billion valuation puts Tabcorp’s share price almost exactly where it is now.
Finally, punters expect Tabcorp to placate them with bonus offers or free bets to make up for the downtime. This could come at a huge cost, too.