For personal use only use personal For Love the game

Concise Annual Report 2015 At the front 1 Vision, Mission & Purpose 2 Information about Tabcorp 4 Financial performance 5 Financial benefits to stakeholders 6 Chairman’s message 8 Chief Executive Officer’s message 10 Wagering and Media business 12 Gaming Services business 14 Keno business 16 Sustainability 16 Responsible gambling 18 People 20 Community 21 Environment 22 Corporate governance 24 Board of Directors 26 Senior Executive Leadership Team

With the financials 28 Directors’ report 39 Remuneration report 57 Income statement 58 Balance sheet 59 Cash flow statement 60 Statement of changes in equity 61 Notes to the concise financial statements 63 Directors’ declaration 64 Independent auditor’s report 65 Five year review

At the back 66 Shareholder information 68 Online shareholder services 69 Company directory 69 Key dates

About the Annual Report For personal use only use personal For Tabcorp’s Annual Report consists of two documents – the Concise Annual Report (which incorporates the concise financial statements) and the full financial report. The concise financial statements included in the Concise Annual Report comprise extracts from the full financial report and are derived from the full financial report. The Concise Annual Report cannot be expected to provide as full an Notice of meeting understanding of Tabcorp’s performance, financial position and investing activities as provided by the The Annual General Meeting of Tabcorp Holdings Limited will be held at the Clarendon Ballroom, full financial report. A copy of Tabcorp’s financial report is available, free of charge, on request and can The Langham Melbourne, 1 Southgate Avenue, Southbank (Melbourne), Victoria on Thursday, be accessed via the Company’s website at www.tabcorp.com.au. 29 October 2015 at 10.00am (AEDT).

Tabcorp Holdings Limited ABN 66 063 780 709 Tabcorp’s To be the most valuable Vision player in the global gambling entertainment industry.

Tabcorp’s We create experiences that Mission & bring alive the passion, thrills Purpose and enjoyment of the Australian way of life.

We give back to the community and take our social responsibilities seriously.

We want you to love the game

like we do. For personal use only use personal For

Tabcorp Concise Annual Report 2015 1 Tabcorp is a leading Australian gambling entertainment company • Diversified across three businesses: Wagering and Media, Gaming Services, and Keno. • Holding secure long term licences in Australia’s most attractive markets. • Possessing a portfolio of iconic Australian brands with market-leading positions. • Operating a unique multi-product, multi-channel model. • A top 100 public company listed on the Australian Securities Exchange and one of the world’s largest publicly listed gambling companies. • Recognised as a global industry leader in responsible gambling. • Employing more than 3,000 people.

For personal use only use personal For Delivering enjoyment to millions of customers

2 Tabcorp Concise Annual Report 2015 Achievements in the year Our FY16 focus is on: • Strong performance by the Wagering and Media • Maintaining market leadership in wagering business, reflecting market leadership in fixed odds through digital integration across retail, product and digital wagering. expansion and innovation, supported by strong • ACTTAB acquisition completed, strengthening customer engagement. Wagering and Media portfolio. • Enhancing the Sky Thoroughbred Central channel. • Gaming Services extended a number of contracts • Expanding TGS with additional venue sign-ups with Victorian venues and signed new venues in NSW. and improving the performance of existing venues. • Keno rebrand launched. • Progressing the Keno brand and product • Agreements in place for Victorian and NSW transformation, and commencing Keno jackpot pooling thoroughbred media rights. with Queensland, subject to regulatory approvals. • Completed 1 for 12 pro rata accelerated renounceable • Achieving our 14% target return on invested capital entitlement offer with retail entitlements trading. by FY17. • Ensuring the highest levels of regulatory compliance and resolving matters raised by AUSTRAC as a priority.

Tabcorp’s businesses are performing For personal use only use personal For well and are strongly positioned for the future

Tabcorp Concise Annual Report 2015 3 Financial performance

Net profit after tax1 • Statutory net profit after tax (NPAT) of $334.5 million, up 157.5% comprising: $ million – NPAT from continuing operations before significant items of $171.3 million, FY15 334.5

up 14.7%. FY14 129.9 1 – NPAT from significant items of $163.2 million relating to income tax benefits . FY13 126.6 • Earnings before interest, tax, depreciation and amortisation (EBITDA) before significant items of $508.1 million, up 4.5%. Revenue2 • Operating expenses of $458.6 million, up 5.8%. Excluding $14 million relating $ million to ACTTAB acquisition, operating expenses were up 2.6%. FY15 2,155.5 FY14 2,039.8 • Revenues of $2,155.5 million, up 5.7%. FY13 2,003.2 • Statutory earnings per share (EPS) of 42.4 cents per share, up 146.5% – EPS from continuing operations before significant items of 21.7 cents EBITDA before significant items2,3 per share, up 9.6%. $ million

• Full year ordinary dividends totalled 20 cents per share fully franked FY15 508.1

representing a payout ratio of 93% of NPAT from continuing operations FY14 486.1 before significant items. FY13 463.9 • Special dividend of 30 cents per share fully franked paid in March 2015.

Dividends per share 4 Cents per share (fully franked)

FY15 50

For personal use only use personal For The 2016 financial year target dividend payout ratio to increase to 90% of NPAT before amortisation FY14 16 of the Victorian Wagering and Betting Licence FY13 19

4 Tabcorp Concise Annual Report 2015 Financial benefits to stakeholders

Revenue by business EBIT by business5 $ million $ million • Taxes on gambling paid $459.6 million, up 4.6%. • Returns to the racing industry of $773.2 million, up 5.2%: – Victorian racing industry received $348.6 million. – New South Wales racing industry received $263.3 million. Wagering and Media Wagering and Media 1,856.9 247.2 – Race field fees of $91.7 million. Gaming Services Gaming Services 99.6 41.6 – Broadcast rights and international contributions Keno Keno 199.0 47.5 of $69.6 million. • Income taxes paid and payable of $84.8 million, FY15 FY14 Change up 27.1%. For the year ended 30 June $m $m % Revenue 2,155.5 2,039.8 5.7 • Voluntary contributions of $0.7 million to support Taxes, levies, commission and fees (1,188.8) (1,120.3) 6.1 Operating expenses (458.6) (433.4) 5.8 community not-for-profit organisations. Depreciation and amortisation (173.5) (164.4) 5.5 EBIT 334.6 321.7 4.0 NPAT (including discontinued operations) 334.5 129.9 157.5 Tabcorp’s businesses generated Notes: more than $1.2 billion in gambling 1. FY 15 NPAT was positively impacted by income tax benefits relating to the Victorian Wagering and Gaming Licences payment and the NSW Trackside payment and associated interest income, which totalled $163.2 million. 2. Refers to continuing operations. taxes and racing industry funding in 3. EBITDA is non-IFRS financial information. 4. Dividends include a special dividend of 30 cents per share paid in March 2015.

For personal use only use personal For the 2015 financial year, highlighting 5. Business results do not aggregate to Group total due to unallocated items. the value that Tabcorp’s operations provide to stakeholders

Tabcorp Concise Annual Report 2015 5 Chairman’s message

“The strong FY15 financial performance, growth initiatives and effective capital management have enabled Tabcorp to deliver increased returns to shareholders.”

I am pleased to present the 2015 Tabcorp Gaming licences payment and the NSW experience was launched to the market in with long-dated licences that complement Annual Report. Trackside payment. NPAT from continuing June, commencing in Victoria. A new brand our existing Wagering, Keno and operations before significant items was proposition, supported by an in-venue and Trackside operations. The 2015 financial year (FY15) was a successful $171.3 million, up 14.7%. Group revenues media campaign, has aimed to make Keno one for Tabcorp. We have strengthened our were $2,155.5 million, up 5.7%. more contemporary and drive participation. We have successfully finalised media rights position as a leading Australian gambling The pooling of jackpots between NSW and arrangements for NSW and Victorian entertainment company and operator of one The Group result was underpinned by a Victoria has commenced and this has enhanced thoroughbred racing. This is a pleasing of the world’s largest Wagering businesses. Our strong performance by our Wagering and the Keno product. Queensland is planned to outcome for our customers, venue partners, Group is diversified, with market-leading brands Media business. Tabcorp has been competing follow, subject to regulatory approvals. the racing industry and Tabcorp. Our and an extensive customer base. The Company strongly in the competitive wagering customers can watch every Australian race is well placed to continue to maximise value environment and we continue to lead the The Gaming Services business, Tabcorp on Sky Racing in our retail venues and at for its shareholders. market. Customers are responding to our Gaming Solutions (TGS), has been enhanced home and, for the first time, through TAB’s wagering offer, which is an endorsement of through the extension of a number of venue website and digital apps. This sets Tabcorp Financial and strategic highlights the investments we have made in integrating contracts in Victoria and expansion in NSW. apart from online wagering operators. our unique retail, digital and media assets, These initiatives have made TGS a more Tabcorp reported Net Profit After Tax (NPAT) For personal use only use personal For as well as in product innovation. sustainable business for shareholders. of $334.5 million in FY15, up 157.5% on the prior Shareholder returns financial year. This reflected strong operational The strong FY15 financial performance, growth Our Keno and Gaming Services have been Tabcorp also advanced its strategic position performance and one-off income tax benefits initiatives and effective capital management strengthened during FY15 and are now during the year by integrating ACTTAB. relating to the Victorian Wagering and have enabled Tabcorp to deliver increased set up for growth. The new Keno customer The ACTTAB business has provided Tabcorp

6 Tabcorp Concise Annual Report 2015 returns to shareholders. The Company It was therefore pleasing that Tabcorp was Separately, in February 2015 the High Court Focus on the future announced ordinary dividends totalling once again recognised as the global gambling declined to grant Tabcorp special leave to In closing, it is pleasing to be able to report 20 cents per share fully franked in respect industry leader by the Dow Jones Sustainability appeal in relation to a Court of Appeal of the that Tabcorp ended FY15 in a stronger of the financial year. This was an increase Index in September 2014. This was the ninth Supreme Court of Victoria judgment on the financial and strategic position. of 25% on the previous full year dividend time in the last ten years that Tabcorp has Health Benefit Levy. This was fully provided and represented a distribution of 93% of received this recognition. Tabcorp ranked for in Tabcorp’s FY14 earnings ($19.5 million The Company has a portfolio of quality, NPAT from continuing operations before highest in eleven of the 19 categories, after tax) and did not have any financial integrated gambling entertainment significant items. including ‘Promoting Responsible Gaming’, impact on Tabcorp in FY15. businesses that are well placed to deliver ‘Corporate Governance’ and ‘Occupational profitable growth. Our businesses are A special dividend of 30 cents per share fully Health and Safety’. AUSTRAC civil proceedings underpinned by long-dated licences, franked was also paid in March this year. To In July 2015, the Australian Transaction Reports geographic diversification and strong maintain Tabcorp’s balance sheet and capital Our commitment to responsible gambling and Analysis Centre (AUSTRAC) brought civil stakeholder relationships. position, Tabcorp completed a one-for-twelve and operating with the highest levels of proceedings against Tabcorp and our NSW pro rata accelerated renounceable entitlement integrity is ongoing. and Victorian wagering businesses. The claim In 2016, we will continue to focus on investing offer with retail entitlements trading. includes matters which have been raised by in the customer experience. We will also Racing returns and taxes and discussed with AUSTRAC over an extended continue to prioritise investment in high- Tabcorp’s confidence in its ongoing financial Tabcorp’s businesses generated $459.6 million period. A program of works, underway for some growth areas that can set us apart from our performance and underlying businesses has in gambling taxes in FY15. A further $773.2 time, has been expanded and accelerated. competitors. These include our retail, digital enabled the Company to increase its target million was generated in returns to the racing Tabcorp is committed to the highest levels and media assets, our market-leading brands dividend payout ratio for FY16 to 90% of NPAT industry, a 5.2% increase on the prior financial of regulatory compliance and resolving the and product and service innovation. (before the $35 million amortisation of the year. Tabcorp’s commercial performance matters raised by AUSTRAC as a priority. Victorian Wagering and Betting Licence). underpins the financial success of the racing Finally, I would like to thank you for your industry. We look forward to continuing to Tabcorp’s people support of Tabcorp. I look forward to Capital management work jointly with the racing industry and our shareholders joining us for our Annual Tabcorp’s more than 3,000 employees ensure During the year Tabcorp refinanced a venue partners and other key stakeholders General Meeting on 29 October 2015, which we deliver great entertainment experiences $400 million bank facility, which extended in 2016. will be held at The Langham in Melbourne. to our customers. I would like to acknowledge the maturity profile of our debt facilities. The For those who cannot attend in person, the commitment of our people, led by our next refinancing activity is not due until 2017. but would like to follow the proceedings, Legal proceedings Managing Director and Chief Executive the meeting will be webcast live through In May 2015, the High Court of Australia Officer, David Attenborough, and his Senior At the end of FY15, the Company’s Gross Debt www.tabcorp.com.au. granted Tabcorp special leave to appeal Executive Leadership Team. We are very to EBITDA ratio stood at 2.1 times, down from a judgment of the Court of Appeal of the focused on talent management and the 2.3 times at December 2014. Supreme Court of Victoria. That judgment engagement of Tabcorp’s workforce. Our relates to Tabcorp’s claim for a payment ongoing success as a business will be Tabcorp continues to have well diversified of approximately $686.8 million from supported by our ability to grow, attract sources of funding and a strong balance sheet. the State of Victoria. The appeal is likely and retain talent. to be heard by the end of 2015.

Tabcorp and responsible gambling Paula J Dwyer For personal use only use personal For Tabcorp’s commitment to promoting Chairman responsible gambling is ingrained in the company’s culture.

Tabcorp Concise Annual Report 2015 7 Chief Executive Officer’s message

“Tabcorp’s FY15 performance demonstrates the success of the Company’s multi-channel strategy and the benefits of our ongoing focus on customers, products and brands.”

Tabcorp’s 2015 financial year (FY15) performance expense management and operating within This combined business performed very TAB Racing revenues were $1,666.3 million, demonstrates the success of the Company’s the framework of a 21% operating expenses strongly in FY15 and underpinned the overall up 5.1%. This comprised $1,236.7 million in multi-channel strategy and the benefits of to revenue ratio. Earnings Before Interest, Group result. Revenues were $1,856.9 million, totalisator revenues, down 2.1%, and fixed our ongoing focus on customers, products Tax, Depreciation and Amortisation (EBITDA) up 6.9%. Operating expenses, including odds revenues of $429.6 million, up 33.0%. TAB and brands. before significant items were $508.1 million, one-off ACTTAB acquisition and integration Sports revenues were $219.2 million, up 16.2%. up 4.5%. costs, were $381.7 million, up 6.8%. EBITDA We are pleased to have delivered a successful was $375.8 million, up 7.2%. On a total During the year we launched a fixed odds FY15 and are now well set up to continue I will now outline the performance of each business basis, that is including the Victorian Cash Out product across all channels, an delivering on our objective of increasing of our three businesses. Racing Industry’s 50% share of the Victorian example of ongoing product innovation. returns to shareholders. Joint Venture, Wagering and Media revenues As well as driving new sales, Cash Out has Wagering and Media grew 6.2%. changed the customer conversation and has driven high levels of engagement. Group performance overview Tabcorp integrated its Wagering and Media A focus on the customer experience and Group revenues were $2,155.5 million, up 5.7% businesses during the year to provide greater successful execution of major events such as Trackside revenues were $99.9 million, on the prior financial year. alignment of wagering and our Sky media the Spring Racing Carnival, The Championships up 11.9%, while Luxbet revenues were assets. This is important as media and vision For personal use only use personal For and Soccer World Cup underpinned the result. $53.1 million, up 10.9%. Operating expenses were $458.6 million, up are key drivers of wagering activity. 5.8%. Excluding $14 million in costs relating The largest drivers of Tabcorp’s Wagering to ACTTAB, operating expenses were up growth in recent years, fixed odds and digital 2.6%. We remain very focused on disciplined wagering, were again the strongest contributors.

8 Tabcorp Concise Annual Report 2015 Media revenues were $173.3 million, up 6.3%, TGS has also extended a number of contracts with the growth driven by the expanded across the Victorian network, with 84% of these distribution of Australian and New Zealand arrangements now contracted through to 2022. racing to foreign markets and international This, in addition to the sign-up momentum REVENUE EBITDA NPAT co-mingling. One of the achievements of in NSW, means TGS is well placed to deliver the period was commencing the co-mingling sustainable, long-term performance. of pools with Hong Kong. During the year, Tabcorp also launched the new Sky Keno 5.7% 4.5% 157.5% Thoroughbred Central racing channel Total Keno network turnover was up 2.7%. on the FOXTEL platform. $2,155.5m $508.1m $334.5m This was the result of improved customer activity in NSW and Victoria, offset by a Tabcorp’s multi-channel business offers softer Queensland market. its customers more channels through which they can place bets than any other Revenues were $199.0 million, down 2.4%, wagering operator. impacted by jackpot activity. Operating expenses were $44.0 million, up 6.8%. The Wagering turnover in Tabcorp’s NSW, The priority for TGS is to improve the growth in expenses reflects investments Tabcorp in the community Victoria and ACT retail channel grew 0.3% performance of its existing venues and expand in capability, the Keno brand and product Tabcorp has a proud record of sharing to $6,601.0 million. Digital channels continued venue sign-ups. transformation. EBITDA was $66.4 million, the proceeds of its operations with the to drive Wagering growth, with turnover of down 8.0%. community. In FY15, our Tabcare program, $3,416.8 million, up 17.8%. At the end of FY15, At the same time, we are resolving the which encourages employees to volunteer the use of mobile devices accounted for 63% matters raised by AUSTRAC as a priority. We The relaunch of the Keno brand and customer and fundraise, partnered with FareShare, of all digital turnover. Tabcorp has prioritised are committed to achieving the highest levels experience has been designed to broaden the OzHarvest, Conservation Volunteers and the ongoing integration of its digital and of regulatory compliance across the business. game’s appeal. While it is in its early stages, The Pyjama Foundation. Tabcorp also retail channels. More than 20 of Tabcorp’s the initial results indicate that the Keno committed to a renewed charitable ‘Future Retail’ pilot sites are scheduled to As a Group, we remain well positioned to transformation has been well received by partnership with the National Jockeys be rolled out by the end of the calendar year. drive future performance, maintain expense customers and venues alike. Trust, which provides relief to jockeys, discipline and deliver on our target of achieving apprentice jockeys and their families when Return on Invested Capital of 14% by FY17. Gaming Services Tabcorp’s people and stakeholders faced with serious injury, illness or death. Revenues grew by 1.5% to $99.6 million. I would like to acknowledge the contribution Operating expenses were flat at $31.2 million, that our 3,000-plus employees made Future priorities while EBITDA was $67.6 million, up 0.9%. throughout FY15. Their collective efforts Tabcorp is well positioned to continue to have contributed to the successful year. deliver growing returns to shareholders. In FY15 we progressed the expansion of Tabcorp Gaming Solutions (TGS) into new markets. We are on an ongoing journey at Tabcorp Our three businesses have specific priorities. TGS successfully signed new venues in NSW, to drive high levels of employee engagement In Wagering and Media, we are focused on as well as in Victoria where the business is David R H Attenborough and to enable our people to perform and progressing the integration of our retail and well established. The positive performance Managing Director and grow. We also continue to drive and embrace digital channels. We will direct investment of our first two venues in NSW has created Chief Executive Officer diversity across the workforce because we towards product and service innovation, confidence that TGS can drive value for know that more diverse workplaces result data analytics and compliance systems. licensed venues in that market. in fundamentally better businesses. For Keno, we will be focused on the successful

For personal use only use personal For At the time of writing, TGS had 9,300 I would also like to acknowledge the many execution of the new brand proposition and gaming machines under contract, up from stakeholders who contribute to the success new products. Keno is a social game with good approximately 8,600 at the start of the of Tabcorp’s operations such as our racing potential for growth and we are investing to 2015 financial year. industry and venue partners. realise that potential.

Tabcorp Concise Annual Report 2015 9 Wagering and Media business

Operations Licences and approvals FY15 highlights Future objectives • Network of TAB agencies, hotels and clubs, • Victorian Wagering and Betting Licence • Continued growth in fixed odds and • Complete ACTTAB integration and launch TAB and on-course totalisators in Victoria, NSW expires in August 2024, and may be digital wagering. brand and customer experience into ACT. and ACT. extended for a further two year period. • Completed the ACTTAB acquisition. • Maintain market leadership and drive • Wagering channels include retail, internet, • NSW Wagering Licence expires in March industry transformation. • Success from major events, such as the mobile devices, phone and pay TV. 2097, with retail exclusivity period expiring Spring Racing Carnival, The Championships • Focus on increased digital integration in June 2033. • Totalisator and fixed odds betting offered and Soccer World Cup. across the retail network following Future on racing and sporting events. • ACT Totalisator Licence expires in Retail pilot. • Increased focus on customer driven October 2064. • Luxbet offers a racing, sport and novelty strategies and investing in multi-channel • Develop new, and enhance existing, products product bookmaking service by phone, • ACT Sports Bookmaking Licence expires customer experience. to grow share of wallet. internet and mobile devices. in October 2029, with further rolling • Fixed Odds Cash Out successfully launched • Strengthen customer relationships and extensions to October 2064. • Trackside, a computer simulated racing across all channels, an example of ongoing retention through loyalty and customer product, operating in Victoria, NSW and • ACT Approval to Conduct Trackside expires product innovation. relationship management programs. ACT, and licensed in other Australian and in October 2064. • Commenced pooling into Hong Kong pools. • Further integrate vision and data with overseas jurisdictions. • Luxbet’s Northern Territory licence expires wagering products. • Expanded distribution of Australian and • Wagering and pooling through Premier in June 2020. New Zealand racing to foreign markets • Maximise customer engagement from Gateway International (PGI) joint venture • Luxbet Europe’s UK Combined Remote and international co-mingling. broadcast media rights. in the Isle of Man (50% interest). Operating Licence has no expiry, and its • Launched new tab.com.au website. • Pursue disciplined, close to core, Three Sky Racing television channels Isle of Man licence expires in January 2019. • international expansion. broadcasting thoroughbred, harness • TAB active account customers up 12% in FY15. and greyhound racing and other sports • Negotiated Victorian and NSW thoroughbred to audiences in TAB outlets, hotels, clubs media rights. and other licensed venues, and into homes to pay TV subscribers. • Sky Sports Radio network in NSW and ACT, and advertising and sponsorship arrangements with Radio Sport National. • Broadcasting Australian racing to 52 Summary financial performance countries and importing overseas racing to Australia. FY15 FY14 Change For the year ended 30 June $m $m % 2,900 TAB retail outlets (approx). • Revenue 1,856.9 1,737.8 6.9 • TAB Rewards members exceed 300,000 Taxes, levies, commission and fees (1,099.4) (1,029.8) 6.8

(up 38% from prior year). Operating expenses (381.7) (357.3) 6.8 For personal use only use personal For • Mobile devices represent 63% of digital EBITDA 375.8 350.7 7.2 wagering turnover (up 9%). Depreciation and amortisation (128.6) (116.6) 10.3 • Sky Racing available in 2.6 million EBIT 247.2 234.1 5.6 Australian homes (approx). • Broadcasting to 5,400 Australian outlets.

10 Tabcorp Concise Annual Report 2015 Total revenue growth of 6.2% (including Victorian Racing Industry interest) Revenues of $1,856.9 million, up 6.9% EBIT of $247.2 million,

up 5.6% For personal use only use personal For

Tabcorp Concise Annual Report 2015 11 Gaming Services business

Operations FY15 highlights Future objectives • Tabcorp Gaming Solutions (TGS) currently • TGS established operations in NSW in FY15, • Extend TGS partner network across Victoria operates across Victoria and NSW. with NSW venues achieving an average and NSW and into other jurisdictions. of over 50% net machine revenue growth. • TGS provides a mix of gaming expertise, • Seamlessly introduce voluntary pre- specialised services, strategic advice and • The business’ partner network expanded, commitment for Victorian venue partner financing to licensed gaming venues, with with 10 new venue signings across NSW network. the aim of optimising gaming and total and Victoria. • Continue to drive gaming and venue venue performance. • TGS extended a number of venue partner performance for our partners, offering deep • TGS partnered with 168 hotels and clubs contracts across the Victorian network, with gaming customer knowledge and expertise in Victoria and NSW in FY15, with over 8,820 84% now contracted through to 2022. in customer experience. EGMs under contract. • TGS’s first to market in-EGM loyalty system is • Deliver the best performing gaming floors, • TGS operates a loyalty program on behalf of operating in over 75% of the Victorian network. with market-first, insight-driven product. its network, with a total membership base of • Voluntary pre-commitment preparation • Drive visitation through loyalty, customer over 340,000 (up by 24% over previous year). for TGS’s Victorian venue partners is well relationship management and advanced, with government trial underway. marketing programs. Licences and approvals • Continue to evolve the TGS value proposition • Victorian Listing on the Roll of to ensure that the business delivers the best Manufacturers, Suppliers and Testers. outcomes for its venue partners. • NSW Gaming Machine Dealer’s Licence. • ACT Supplier Certificate. • Tasmanian Listing on the Roll of Recognised Manufacturers, Suppliers and Testers of Gaming Equipment.

Summary financial performance FY15 FY14 Change For the year ended 30 June $m $m % Revenue 99.6 98.1 1.5 Taxes, levies, commissions and fees (0.8) - n/a Operating expenses (31.2) (31.1) 0.3 For personal use only use personal For EBITDA 67.6 67.0 0.9 Depreciation and amortisation (26.0) (27.3) (4.8) EBIT 41.6 39.7 4.8

12 Tabcorp Concise Annual Report 2015 Revenues of $99.6 million, up 1.5%

For personal use only use personal For EBIT of $41.6 million, up 4.8%

Tabcorp Concise Annual Report 2015 13 Keno business

Operations FY15 highlights Future objectives • Keno is a random number game that is • Total Keno network turnover was up 2.7%, • Continue Keno’s transformation across NSW, played every 3 minutes with the chance for reflecting record growth in NSW and Victoria, Queensland and the ACT, positioning Keno customers to win instant prizes and life- offset by a softer Queensland market. as a contemporary, fun and social game. changing jackpots. • Keno’s turnover and revenue was impacted • Extend Keno’s product offer, launching • In FY15 Keno customers won a record 21 by above theoretical jackpot wins in new products that drive participation and spot-10 jackpots totalling over $38 million. Queensland and Victoria. reinforce Keno’s new brand positioning. • Keno has a distributed network of over • In FY15, Keno launched its customer-led • Expand Keno jackpot pooling across 3,600 venues across clubs, hotels and TABs business transformation, which saw: other jurisdictions. in Victoria, Queensland and ACT, and in – Pooling of the 7,8,9 and 10 jackpots • Develop and launch converged digital clubs and hotels in NSW. between NSW and Victoria, delivering experiences that integrate with Keno retail. • The business’ retail distribution extends bigger and more frequent jackpots. • Build deep customer insight to further across approximately 6,400 terminals – The launch of a new Keno brand in develop Keno’s customer experience. and 17,000 game screens. Victoria; which included a new logo, advertising campaign and customer Licences and approvals experience across retail game screens, • Victorian Keno Licence expires in April 2022. self-service terminal interface, game card and signage. • NSW Keno Licence expires in July 2022. – Launch of a new website, keno.com.au. • In NSW Tabcorp operates Keno under a management agreement with ClubKENO • Keno’s network extended in FY15 to Holdings Pty Ltd. incorporate the ACT via ACTTAB acquisition. • Queensland Keno Licence expires in June 2047. • Keno’s technology foundation was improved with the adoption of similar infrastructure • ACT Approval to Conduct Keno expires in used by NSW, Queensland, Victoria and October 2064. ACT hosts.

Summary financial performance FY15 FY14 Change For the year ended 30 June $m $m % Revenue 199.0 203.9 (2.4) Taxes, levies, commissions and fees (88.6) (90.5) (2.1) Operating expenses (44.0) (41.2) 6.8 For personal use only use personal For EBITDA 66.4 72.2 (8.0) Depreciation and amortisation (18.9) (20.5) (7.8) EBIT 47.5 51.7 (8.1)

14 Tabcorp Concise Annual Report 2015 Total Keno turnover up 2.7% Revenues of $199.0 million, For personal use only use personal For down 2.4% EBIT of $47.5 million, down 8.1%

Tabcorp Concise Annual Report 2015 15 Sustainability Responsible gambling

Tabcorp takes its social responsibilities seriously and is committed to the long term The Tabcorp Group takes a leadership position in the responsible delivery of its gambling sustainability of its operations and industry. It recognises that there are sustainability challenges products and support for customers. We are committed to promoting sustainable gambling and opportunities associated with social, environmental, workplace, economic and governance practices and providing our products and services in a responsible manner for the enjoyment risks, which are managed to ensure optimal outcomes are achieved for our stakeholders. of customers. While we create enjoyable entertainment experiences for our customers, we have in place systems and processes to minimise the potential harm that gambling may cause. We Tabcorp’s sustainability practices are aligned to its business strategies and objectives, and are take our social responsibilities seriously and have embedded responsible gambling into Tabcorp’s mapped against the organisation’s risk profile and risk management framework. This enables Mission and Purpose, and reinforced it through our company values of Think customer; Do the Tabcorp to identify the most significant challenges and sustainability issues facing the Group, right thing; and Be accountable. which are monitored and reported to the Senior Executive Leadership Team and to the Board. The organisation commits resources to appropriately manage these in accordance with the Over many years Tabcorp has developed and enhanced its programs and practices, and we company’s risk profile and business priorities. continue to adopt new technologies and respond to industry changes. Our long term commitment has resulted in Tabcorp being recognised as an industry leader in promoting responsible gambling A key priority and area of focus for Tabcorp is promoting the responsible service of its products, in the Dow Jones Sustainability Index, and a leader in customer responsibility in the FTSE4Good and supporting customers to help them gamble responsibly. Tabcorp’s other main sustainability ESG Ratings. Tabcorp engages with customers, governments, regulators, community organisations areas include having a great workplace for our employees, supporting the community, helping and industry partners to enable our responsible gambling practices to remain effective and our environment, and having sound corporate governance practices. The following sections industry leading. outline Tabcorp's commitment to providing long term sustainability in these areas. Further information may also be found under the Sustainability section of Tabcorp’s website Framework www.tabcorp.com.au. The Tabcorp Group’s responsible gambling strategies and initiatives are based upon a social health framework of informed choice, incorporating primary prevention, secondary protection Tabcorp is independently recognised as the leader in sustainability within the gambling and safety net measures. Tabcorp’s integrated multi-layered framework incorporates strategies, entertainment industry. In the annual assessment for the Dow Jones Sustainability Index codes of conduct, policies and programs which are centred on promoting responsible gambling announced in September 2014, Tabcorp was ranked as the overall global gambling industry leader. among customers, the community, and employees. This framework is applied consistently across Tabcorp has achieved this outstanding result in nine of the last ten years. Tabcorp was also each of the Tabcorp Group’s businesses, while certain elements are tailored to the specific acknowledged as a leading sustainable company in the annual FTSE4Good ESG Ratings released circumstances of each business. Regular engagement with our stakeholders is an important in July 2015 and included in the FTSE4Good Index. These indices are used by investors to identify aspect of this framework which helps inform us to be more effective. companies that meet globally recognised corporate responsibility standards. For inclusion in these indices, Tabcorp is independently assessed each year on environmental, social and governance Appropriate management and oversight are important aspects for maintaining effective practices. (ESG) criteria. Tabcorp’s inclusion in the Dow Jones Sustainability Index and the FTSE4Good Index Employees and executives with specific expertise and roles relating to responsible gambling, since 2001 demonstrates the company’s long term commitment to sustainability. compliance, risk management, and customer management have responsibilities for delivering the responsible gambling strategies and programs in support of this framework. Regular reports are prepared for management, and the Board is regularly informed about key initiatives, risk assessments and internal audits.

Codes of Conduct The Tabcorp Group has developed individual Responsible Gambling Codes of Conduct for each of its businesses of TAB, Luxbet and Keno. This enables the Codes to be responsive to the For personal use only use personal For particular needs and circumstances applicable to individual customers within those businesses while maintaining compliance with the specific requirements in each State or Territory. These Tabcorp has been ranked as the overall global gambling Codes are regularly reviewed to ensure they remain relevant for customers and for the business. industry leader in nine of the last ten years in the annual As a requirement in Victoria, we report annually to the Victorian Commission for Gambling and Liquor Regulation on the effectiveness of our Victorian Responsible Gambling Codes of Conduct. assessments for the Dow Jones Sustainability Index. The report includes analysis and results of surveys undertaken by hundreds of customers to measure their awareness of Tabcorp’s responsible gambling Codes and their effectiveness.

16 Tabcorp Concise Annual Report 2015 Codes of Conduct relevant to each of the Tabcorp Group’s businesses are available from the to inform and promote responsible gambling awareness with stakeholders, including customers, Responsible Gambling section of Tabcorp’s website at www.tabcorp.com.au and are also venue staff, industry partners, governments, regulators and local community organisations. provided to customers upon request. Each of the TAB, Luxbet and Keno websites contain information on responsible gambling and links to the relevant Codes of Conduct. Educating employees Tabcorp’s ongoing training and communications programs ensure employees understand and Customer initiatives are informed about Tabcorp’s responsible gambling program. Regular education and awareness Tabcorp operates its BetCare self-exclusion program across its Victorian and NSW TAB retail is provided to enable employees to be equipped with tools and information to help identify network. BetCare is a voluntary self-exclusion program which customers can access free of responsible versus problem gambling behaviours, and respond accordingly. Information is charge to help them manage their gambling behaviour. As a member of BetCare, customers initially conveyed through the new employee induction program, with annual refresher training can exclude themselves from up to 15 TAB agencies and 15 hotels or clubs in either Victoria or for employees with customer facing roles. Training and communication programs are delivered NSW. TAB customers can also opt to have their TAB betting account closed until they demonstrate via a number of mediums, including written, face to face and online. they can manage their gambling behaviour and gamble responsibly. Keno account customers can also self-exclude by electing to have their accounts suspended. We also communicate regularly with our agents and operators within our retail network to provide training and communications packs to them regarding responsible gambling initiatives, In addition, TAB and Keno customers can set voluntary pre-commitment limits on their betting compliance obligations and informative alerts. Material is conveyed to our retail network via accounts. This enables customers to select their own maximum value for weekly deposits. newsletters, bulletins and online. We also ensure all venues are well equipped with responsible gambling posters and brochures in prominent areas, for example, at the betting counter, near The Tabcorp Gaming Solutions (TGS) business was the first to launch in-EGM voluntary pre- self-service terminals and posters on walls around the venues. commitment in the Victorian gaming market. Customers in TGS partner gaming venues can elect to set a playing time or value limit on their loyalty card. Tabcorp’s internal audit teams regularly visit venues to assess their level of compliance with responsible gambling obligations, such as correctly displaying responsible gambling posters Community engagement and brochures. In addition, our operations are routinely subjected to audits and compliance assessments by gambling regulators. Tabcorp takes an active role in partnering with governments and community organisations to promote responsible gambling and raise awareness among the communities in which we operate. Employee gambling policy In May 2015, Tabcorp supported the NSW Responsible Gambling Awareness Week (RGAW). The Many of Tabcorp’s employees enjoy gambling and do it responsibly. Tabcorp’s Employee Gambling event sees government, community groups and the gambling industry working in partnership Policy is a key component of Tabcorp’s commitment to delivering gambling products responsibly to promote responsible gambling practices and behaviors within the community. The aim of and caring for our employees. We recognise that employees use our products and services for their RGAW is to increase the community’s awareness of responsible gambling strategies so people can own personal recreational purposes, and for many their jobs involve interacting with our products make informed decisions about their gambling choices and know how to seek assistance if they and services. Tabcorp’s Employee Gambling Policy seeks to provide the right balance between need it. This year’s event focused on raising awareness among young people. Tabcorp supported accessibility and restricting interactions so that no person can gain, or be perceived to gain, RGAW by providing RGAW collateral distributions costs, contributing employee time and an unfair advantage in using our gambling products. expertise, and promoting the event by displaying RGAW collateral in NSW TAB agencies. Under the policy, Tabcorp Directors, employees and contractors may not gamble whilst on Employees of Tabcorp are appointed members of the Victorian Responsible Gambling duty, whether on Tabcorp’s gambling products or those of another gambling operator. Limited Ministerial Advisory Committee and the Queensland Responsible Gambling Advisory Committee. exemptions apply, which require written authorisation. Gambling off duty is subject to specific These committees include representatives from government, community groups and industry restrictions which apply to Directors, executives and direct reports to executives, and other groups For personal use only use personal For organisations. They provide advice to relevant government ministers on initiatives, policies according to the nature of their work. Anyone who gambles off duty must do so responsibly and codes of practice to promote responsible gambling. and within their means.

Tabcorp employees also maintain relationships with problem gambling counselling services Annually, the Tabcorp Group conducts surveys of employees within specific businesses to evaluate and other related community groups. They are members of Venue Support Workers Reference the level of problem gambling risks within the workplace. The results of the assessment conducted Groups and RGAW Steering Committees. They attend various community and industry forums during the 2015 financial year indicated that for those employees who gamble, they do so responsibly, and there were no indicators they were at risk of developing problem gambling behaviours.

Tabcorp Concise Annual Report 2015 17 People

Tabcorp continues to build a great place to work for its 3,000-plus employees. We invest in Leadership Team (Chief Executive Officer and direct reports) and the Senior Management Team and support our employees to reach their full potential and contribute to the success of the (direct reports to the Senior Executive Leadership Team and their direct reports, as determined organisation. To support growth, Tabcorp has people strategies and programs that are aligned by meeting a minimum role size). with organisational goals and objectives. Some of the main areas of focus for Tabcorp are outlined below, along with the key achievements of the 2015 financial year. The proportion of women at various levels within the Tabcorp Group at the end of the financial year is shown in the chart opposite. Engagement Tabcorp’s 2014-15 annual public report regarding workplace gender equality was submitted to the The engagement levels of employees are a key contributor to organisational success. A workforce Workplace Gender Equality Agency and is published under the Sustainability section of Tabcorp’s which is highly engaged closely correlates to improved organisational outcomes, such as better website at www.tabcorp.com.au. customer service, productivity and added value. Tabcorp’s Diversity Policy is also available from the Sustainability section of Tabcorp’s website. For the fourth successive year, Tabcorp has measured employee engagement using the Gallup assessment tool, which assesses employee engagement on a scale of 0 to 5. Once again, the FY15 results indicated that employee engagement had improved, and that Tabcorp has maintained Health, safety and wellbeing top-quartile growth in engagement levels since 2011. Tabcorp is committed to providing a healthy and safe working environment and has a track record of successfully managing its health and safety risks. The low rate of 1.0 lost time injury per million Tabcorp understands that our employees’ connection to our vision, mission and purpose is hours worked achieved in FY15 demonstrates that Tabcorp has a strong health and safety culture. integral to high engagement. A key focus in 2015 was the development and communication of Tabcorp’s Vision statement, to further support our Mission and Purpose (launched in 2014). Tabcorp has a Health and Safety Policy which is supported by systems and processes to assist We also continued to drive a new way of working that is underpinned by enabling technology in identifying, monitoring and managing risks. Tabcorp’s Health and Safety team coordinate and the creation of collaborative work environments. People leaders have engagement targets and support activities within each Tabcorp business and at each location to ensure a consistent embedded in their scorecards to continue to drive employee engagement, and meet its goal focus on health, safety and wellbeing across the Tabcorp Group. Risk assessments of each Tabcorp of achieving Gallup top quartile results by 2016. business unit are undertaken regularly and discussed with management. Risks and incidents are reported regularly to the Senior Executive Leadership Team and to the Board Audit, Risk Gender diversity and Compliance Committee. Tabcorp recognises the value of having a diverse workforce which comprises people with a range Our focus has been on promoting health and safety through employee awareness campaigns of backgr