Industry reaction to Tabcorp hiring ex-AFL chief as CEO

Tabcorp’s choice of a new CEO in the shape of former Australian Football League (AFL) boss Gillon McLachlan has drawn ire from commentators in the country.

His appointment comes three months after his predecessor Adam Rytenskild was removed from the post following allegations of “inappropriate and offensive language” in the workplace.

McLachlan, who will join the firm on 5 August, arrives after taking a short break from his decade-long stint as head of the AFL.

The link between sport and gambling has not been lost on many following McLachlan’s appointment, with politicians and industry stakeholders pointing out the potential greater intertwining of sports and gambling could have negative consequences.

David Pocock told ABC’s Radio National this morning (18 June): “[McLachlan’s hire comes] at a time when we need to break the nexus between sport and gambling, not bring the two closer together.

“There’s an opportunity for him to use his insider knowledge when it comes to the inner workings of one of Australia’s biggest sporting codes for the benefit of the gambling industry.”

Stephen Maye, Crikey.com founder and columnist, posed the question whether McLachlan’s track record of growth in the AFL is owed to the “toxic gambling industry”.  

Highlighting how the English FA distanced itself from operator Ladbrokes seven years ago, while the AFL profited from deals with gambling firms, Maye expressed his distaste at the appointment.

He wrote: “Unlike the [English] Football Association, which in 2017 tore up its sponsorship deal with Ladbrokes given the obvious conflicts of interest, the AFL doubled down on its gambling deals during McLachlan’s tenure, taking a slice of the revenue from each bet laid and more than A$10m a year in direct sponsorship payments from the likes of CrownBet/BetEasy and Sportsbet.

“It also enjoyed turbo-charged broadcast rights payments from Seven and News Corp’s Foxtel, which are very much underpinned by their own addiction to gambling advertising.”

However, not every reaction to the news was negative, with sports journalist Adam Dobbin arguing in an opinion piece for Racenet.com that McLaughlan is “the right man at the right time”.

Victoria’s minister for gaming and casino, Melissa Horne, said she was keen to begin working with McLaughlan, and looks “forward to him having a really constructive relationship with the toughest regulator of gaming in the country”.

Business and politics-focused publication Capital Brief spoke to Matt Williams, Airlie Funds Management head, who said the positives outweighed the negatives on the exec’s new job.

Arguing Tabcorp is in a transition period, Williams said McLaughlan has the experience to get the job done.

“It’s a good appointment, it’s a good get for Tabcorp. He’s obviously got great experience in a sporting media organisation. A large one, complex, with a lot of stakeholders,” Williams told Capital Brief.

“I’ve heard the bears say today that he lacks wagering and ASX experience. But I think his positives certainly outweigh the negatives. I think, basically he’s entering a company that’s been in turnaround mode.

“He’ll have some cultural challenges, given what’s gone on prior. It won’t be any easy task to get the turnaround [complete].”

Gilbert Gardner, senior racing journalist for Australian tabloid newspaper the Herald Sun, suggested the appointment could be a positive for all involved.

He said wrote in an article: “Tabcorp’s successful poaching raid on Gillon McLachlan, which robbed Racing Victoria of its chairman elect, could end up being a win for all parties.

“McLachlan has the ‘day job’ he wanted, subject to regulatory approvals, before entertaining any other advisory or board room positions.

“The wagering giant Tabcorp has the recognisable figurehead – ‘needs no introduction’ – and dealmaker to lead the company into a most competitive sport, media and bookmaking future.”

Elizabeth Knight, Sydney Morning Herald business columnist, pointed out in a piece titled ‘Tabcorp’s big, risky bet on the former king of the AFL’ that someone from the digital bookmaking world would have made more sense.

This is after the firm’s share price dipped 1% to A$0.65 following the announcement of McLachlan’s impending arrival.

Knight wrote: “Someone with a proven ability in technology would have provided investors with a sense that Tabcorp could catch up, or beat, the nimble competitors that increasingly dominate the betting landscape.”

Meanwhile, on his appointment, McLachlin said: “Tabcorp is a wagering, broadcast and integrity services business and the challenges of growing it are appealing. 

“It’s about creating entertainment for our customers in a safe way and providing a unique customer omnichannel entertainment offering across digital, retail and the media business.

“Tabcorp is a proudly Australian company that contributed A$1.1bn to the racing industry last year and continues to be one of the racing industry’s biggest partners, as well as the wagering licensee in all states, except for WA [Western Australia]. This is a really important component of my decision. 

“There are enormous opportunities ahead and I’m looking forward to driving the sport category among other things. Tabcorp is part way through its transformation journey and I’m looking forward to working with the leadership team to accelerate and deliver on the growth opportunities,” he added.