Gamble responsibly. Good morning, everyone. I'm Brett Chenoweth, Chair of Tabcorp Holdings Limited. On behalf of my fellow directors, I welcome you to Tabcorp's 2026 Annual General Meeting. It's been a historic year for us. You've just viewed a highlights package of the National Tote, One Pool, which was launched last month. I've been advised that a quorum of shareholders is present and therefore declare the 2026 AGM open. I'd like to begin by introducing our board of directors. Joining us today on the stage are Vivian Stewart, Karen Stocks, Raelene Murphy, David Gallop, Janette Kendall. We've also got our Managing Director and Chief Executive, Gillon McLachlan, and our Company Secretary here, Chris Murphy. In the audience are members of our Executive Leadership Team and Michael Collins, the Lead Audit Partner at our external audit firm, Ernst & Young, who concluded his term following our FY26 results.
Before we move to the formal business of the meeting, I'd like to explain some procedural and technical matters for the conduct of today's meeting. This is a hybrid meeting with shareholders participating either in person or through the online meeting platform. In both cases, shareholders can watch the presentations, ask questions, and of course, vote during the meeting. The notice of meeting has been released on the ASX and made available on Tabcorp's website. The formal addresses for today's meeting have also been released to the ASX this morning, and a recording of the meeting will be available on Tabcorp's website following the meeting today. Voting on all resolutions will be conducted via a poll, and I appoint Julie Stokes of Tabcorp Share Registry, MUFG, as the Returning Officer for the conduct of that poll.
Shareholders and proxy holders in the room who are entitled to vote should have received a yellow admission card. That card sets out the resolutions and serves as your ballot paper. Please record your vote, marking the appropriate box either for or against each resolution. For shareholders participating via the online meeting platform, you may vote by using the Get a Voting Card button and then following the instructions. I now declare the poll open for all resolutions. You may vote at any time from now until the poll closes, which is approximately 5 minutes after the conclusion of today's meeting. The proxy votes received prior to the meeting will be shown on screen after the discussion of each resolution. In my capacity as Chair of the meeting, I am holding open proxies.
Subject to the applicable voting exclusions, I intend to vote all available proxies in favor of all resolutions. The final poll results will be lodged with the ASX as soon as possible after the meeting today. Only eligible shareholders and proxy holders may ask questions and vote at today's AGM. There will be an opportunity to ask questions on each item of business during the meeting. For those in the room today, all questions should be directed to me by going to a microphone and giving your name to the attendant. When I call for your question, the attendant will introduce you, and you may then ask your question. If you have more than one question on a relevant item, please ask them together before returning to your seat.
If you are participating online, you may submit a question by selecting the Ask a Question button and following the instructions. Questions may now be submitted online, and you do not need to wait until the relevant item. For each item of business, I will first address questions received before the meeting, followed by questions from shareholders in the room, and then questions that are submitted through the online platform.
To help us give as many shareholders as possible the opportunity to participate, please keep your questions brief, to the point, and relevant to the item of business. If you have questions that do not relate to the business of the meeting, please speak to Chris, the Company Secretary, after the meeting, and he will be glad to deal with those. I would now like to formally address the meeting. FY 2026 was a year of strong performance and execution for Tabcorp.
Our new retail commercial model is implemented, in-play betting is in venues, we expanded our media footprint, and more recently, we launched National Tote. If you have been on our journey for a while, you will know we have had a plan to transform the company, and FY 2026 was about making those plans a reality. I am pleased we have ticked a number of those boxes. The company is improving, and we know there is still more improvement to come.
Today, the board presents to shareholders another strong financial performance. Group revenue grew to AUD 2.63 billion, EBITDA before significant items rose 10.3% to AUD 431.7 million, NPAT before significant items increased 43.6% to AUD 71.1 million, and statutory NPAT rose 26.5% to AUD 46.3 million. We continue to maintain cost and capital discipline. Operating expenses before significant items were AUD 700.7 million, an increase of less than 1%, and that is in a high inflationary environment.
Improved earnings together with strong operating cash flow and disciplined capital deployment supported reductions in net debt to AUD 533.1 million and reported leverage to 1.2 times at June 30, 2026. We also materially strengthened the balance sheet with a successful AUD 300 million Australian medium-term notes issuance and the extension of our existing syndicated bank debt facility on improved terms. Delivering sustainable returns to shareholders is very important to us, and we're pleased to announce full-year dividends totaling AUD 0.03 per share, unfranked, which was up 50% on the prior year. Before I move on, I want to acknowledge the AUSTRAC enforcement investigation that was announced on May 7 this year. AUSTRAC raised serious concerns about Tabcorp's ability to effectively identify, mitigate, and manage AML and CTF risks. The board and management take those concerns extremely seriously.
We've had a dedicated team working on this matter, and we are fully cooperating with the investigation. There's no update from our previous announcement, and we'll continue to keep shareholders informed of material developments in accordance with our disclosure obligations. During the year, we also appointed former AUSTRAC CEO Paul Jevtovic as our Chief Financial Crime Officer to lead our financial crime team in the uplift. Paul's sitting here. The continued evolution of our financial crime, risk, and compliance, and player safety capability will remain an important priority for the board in the year ahead. As part of the company's ongoing transformation, on August 10, we also announced that Tabcorp had entered into an agreement to acquire BetMakers Technology Group. The rationale for this acquisition is simple, really.
It's accelerate the transformation of our technology stack so that we can execute our plans more effectively and efficiently with lower risk, and also grow our global B2B opportunities. This proposed acquisition is targeting a run rate of AUD 30 million of cost synergies by the end of year two of our ownership, with attractive expected returns for our shareholders. We also look forward to welcoming an uplifting capability when the BetMakers team join us at Tabcorp. The company's target for completion of the deal remains the third quarter of FY27, and it's subject to BetMakers shareholders, court approvals, ACCC clearances, and relevant gaming and racing authority consents. I'll leave it to Gil to deliver a broader strategic update shortly, but from my perspective, I was pleased to see the company reach the execution phase of our strategy in line with the timeline that we've presented to market.
National Tote, One Pool, is now a reality, and anyone who has an interest in racing knows this has been a pipe dream for close to 30 years. We have a more sustainable retail model for shareholders, and in return, a better customer offer for our publicans. Sky has had a complete refresh with new graphics, magazine programs, and talent, and this is going to continue. Gil has been clear since he joined two years ago that the company is on a journey of continuous improvement. I believe in FY26, we showed that we are improving, and I'm enthusiastic about the opportunities that lie ahead for this organization. There's more to do, and as Gil will say, we have a relentless focus on further execution in FY27. Now, I just wanted to personally acknowledge our Chief Executive, Gil. Two years ago, he set out a plan for this company.
In FY26, he and his team delivered on the key milestones, a National Tote, a new retail commercial model, a refreshed Sky, and a stronger balance sheet. He did this while staying focused on getting the foundations right, building a strong leadership team, and delivering and driving an uplift in our financial crime and compliance capability. Gil, on behalf of the board, thank you for your leadership and a job well done. FY26 has been a great year for you.
Thank you. I would also like to acknowledge my peers on the board and thank you for your support and contribution through FY26, as well as the entire Tabcorp management team, led by Gil, for the execution of our strategy. Most importantly, we want to thank you, our shareholders, for your ongoing support of Tabcorp. It is your company, and it is our job to deliver returns for you. I look forward to sharing our progress in FY27, and I will now hand over to Gillon for his strategic update. Thank you.
Thank you, Brett, and good morning, shareholders. 2 years ago, I presented you with a plan, and I believe we continue to deliver on its key milestones. This game plan is the scoreboard you should measure us against, and I would love to update you today on how we are progressing. Improved capability and commitment are pillar one of our revised plan and the core of our transformation. The foundation is people. Brett mentioned the appointment of Paul Jevtovic as Chief Financial Crime Officer. We also deepened our bench strength this year with key general manager appointments in wagering, in retail, in marketing, MAX, cybersecurity, and in risk. I have been open about wanting more women in the business and more women in senior roles. During this year, we launched TABW, a program designed to identify and develop our emerging female leaders.
Diverse workplaces attract more talent and, in my view, make better decisions. Culturally, we are focused on doing what we say we will do, and we are steadily getting more precise in this. We are a better company today than we were a year ago, and I am confident we will be a better company again this time next year. We are executing faster and creating the omnichannel racing and sports entertainment experience we know only our unique assets can deliver for our customers.
The second pillar of our plan is growth for ourselves and our industry. Since I addressed you, the National Tote, as Brett said, has become a reality. It is called One Pool, where Australia's three tote pools become one. This is a historic reform for the wagering industry and aims to support sustainable growth for the racing ecosystem while delivering a more attractive wagering proposition for punters.
One pool is creating deeper pools, more price stability, and the opportunity for more jackpot-style products. We're seeing One Pool deliver better odds than the fixed product in about 60% of races. It's important to note that the National Tote is just the start of what One Pool will become. The team has continued to work on new product opportunities and innovations, including sports product and improved pricing and promotions, as well as the broader co-mingling opportunities. The vision future states is any tote bet around the world on an Australian race being bet into One Pool. Pillars three and four of our game plan are the creation of a genuine omnichannel offering and a structurally profitable retail business. As Brett mentioned, the new retail commercial model has been implemented.
We're pleased that more than 3,300 venues are operating under the new model, representing about 97% of turnover from our previous contracted retail network. Thank you to our pub and club partners for the way you have engaged to create a more sustainable model that allows us to invest more into venues. The look and feel of our venues is improving, and our exclusive retail offering is engaging more customers. Building on the success of TAB Time and TAB Takeover in FY 2025, we continue to launch new products and innovations, including AFL Miss By One, NRL Megapot, and TAB Shout. These products demonstrate the benefits of TAB's integrated omnichannel offering. The rollout of new next-gen electronic betting terminals has commenced, forming part of a multi-year program to modernize the retail network. Our aim is that within two years, all venues will have new terminals.
This is a significant investment in our retail channel, and we're looking forward to realizing the increasing compliance and commercial benefits going forward. The proof of these initiatives and investments is in the results. In FY 2026, total digital in-venue turnover increased 9%, while in-venue sport turnover increased 25%. Our final pillar is our standalone media business. Sky can broadcast every race meeting in Australia, and that's critically important because it allows us to grow our global B2B distribution rights. As Brett referenced, we've modernized the look of Sky. One Pool created the opportunity to refresh our presentation and graphics, and the way we deliver offers on screen. The evolution of Sky will continue in FY 2027. Sky is more integrated into the wagering experience than it has ever been before. It's another step in creating a true omnichannel experience.
Our integrity services business, MAX, continues to be the trusted partner of state governments, delivering monitoring services for electronic gaming machines. We continue to look at opportunities to expand the reach of that business. There's more work to do across all departments. We're not yet where we will ultimately want to be, but I'm pleased with our progress. I want to reiterate Brett's comments about the AUSTRAC investigation. We have a dedicated team fully cooperating with AUSTRAC and will inform the market when there is a material update. As I've said previously, I'm committed to leading a compliant company. Nothing is more important to me. Our financial crime and risk transformation programs are an absolute priority. During the year, we established a financial crime uplift and risk committee, which oversees compliance with our legislative and regulatory obligations, and importantly, the ongoing uplift of our financial crime capability and maturity.
Our growth plans will not come at the expense of keeping our customers safe. We are making significant investments in technology and customer care, and as the technology develops, so will we. My team looks forward to executing the BetMakers acquisition, targeted for completion in Q3 of FY2027. This acquisition is expected to accelerate our strategy across multiple areas, including fast-tracking our wagering technology transformation, and having faster speed to market for products and services, and allow us to execute more cost-effectively. BetMakers has a larger global footprint than Tabcorp, and I am looking forward to tapping into those relationships to grow our global B2B media and tote business. FY2027 is about being relentless in executing our game plan. As our team knows, everyone can get to 97%. It is the final 3% that sets the best apart, and every day, we strive to go the extra 3%.
As I said at last year's AGM, every CEO craves a strong relationship with their Chair, and I am pleased to have that with Brett. Thank you for your leadership, and thank you also to the Board for your guidance to the team in FY2026. To you, our shareholders, thank you for your ongoing support. This is your capital, which we invest every day, and we will be focusing growing this business and delivering stronger returns for you.
Hope to see some of you at Flemington next week for the Melbourne Cup Carnival. We will again be unmissably green. You will see our omnichannel offering in action, be it the TAB Takeover, TAB Time, our integrations on Sky, or the 10,000 TAB caps we will hand out on the track each day. There will even be a bright green TAB chopper. This is the game plan I spoke about being executed for our customers. Thank you for your time today, and I will now hand back to you, Brett.
Thank you, Gillon. We now come to the formal part of today's meeting. The notice of meeting has been published and made available to stakeholders, and I will take it as read. Each of the resolutions to be put to the meeting will be moved in the order set out in the notice of meeting. At the end of each item of business, I will respond to questions, and I encourage you to now submit online any questions you may have for the item of business. The first item on the agenda is to receive and consider the financial report, the Director's report, sustainability report, and the report of the auditor in respect of the year ended 30 June 2026.
These reports were approved by the board and were included in the annual report that was released to the ASX and published on our website on August 26, 2026. This item is not subject to a vote, but in a moment, I will respond to questions from shareholders regarding these reports and the performance of the company. Ernst & Young is the company's external auditor. Michael Collins, the partner of Ernst & Young who signed the audit report, is present today and available to answer questions, which should be restricted to audit matters. The resolution is now open for discussion. I will now ask the Company Secretary to read any questions received prior to the meeting in relation to this item.
Chair, we received a question on this item from shareholder Natasha Lee, who asks, "Given the takeover of BetMakers with Tabcorp shares being issued at AUD 1, and currently the Tabcorp share price has been significantly below AUD 1, what impact does this have on the deal?
Oh, thanks, Chris. So thank you for your question, Ms. Lee. Under the terms of the deal, BetMakers shareholders can receive AUD 0.24 per share in cash or elect to receive Tabcorp shares subject to the 25% aggregate cap and any required scale back. So, under the scrip alternative, Tabcorp shares will be issued at the greater of AUD 1 per share and Tabcorp's five-day VWAP prior to the record date for the scheme. If Tabcorp share goes below the AUD 1 at the relevant time, the AUD 1 floor still applies. So this means that fewer Tabcorp shares would be issued, resulting in less dilution for existing Tabcorp shareholders. We will be better off. Other than this, the lower Tabcorp price does not affect the terms of the transaction.
Chair, we received another question on this item from Ms. Lee, who asks, "Could you advise how AI is being applied to the company's operations, and in particular, how agentic AI is being used? How will appropriate risks and human oversight be maintained in this fast-moving and complex area with sufficient transparency over the AI algorithms?
Okay, thank you again for your question. With respect to AI, we are adopting AI across a range of areas of the business under an AI strategy being led by Gil and the senior leadership team here. We are already seeing tangible results and benefits from AI adoption, particularly in productivity and efficiency across the company. For example, AI is supporting software development and testing, IT operations. We are seeing significant productivity improvements across the business. It is also being used to enhance our customer capabilities and to support trading, pricing, and risk management. We expect adoption in these areas to continue to grow as the technology and our capabilities mature, of course. We are also using AI to enhance our risk and compliance capabilities, helping our teams work more efficiently and make better use of data and intelligence. An example of this is within our financial crime program.
AI is being used throughout the new case management platform, which is called iHub, to bring together relevant information, improve case intelligence, and streamline the investigation and assessment workflows. We recognize that AI, particularly agentic AI, it does also present new and evolving risks. We have established a responsible AI policy, of course, and a governance framework which is supported by oversight from our cybersecurity group, legal, and our risk teams. Important with respect to agentic AI workflows, we do maintain appropriate human-in-the-loop oversight and control, so we are not just relying on autonomous decision-making. As AI develops, we will continue to develop our governance and controls to ensure that it is used responsibly, securely, and with appropriate human oversight.
Chair, there were no further questions received on this item prior to the meeting.
Okay, thank you, Chris. We will now turn to any live questions in the venue. Are there any questions on this particular item?
Mr. Chairman, I would like to introduce Steven van Emmerik of the Australian Shareholders' Association.
Yeah, thanks, Mr. Chairman, and thanks for ASA members and others that have given us their proxy votes. Firstly, a couple of comments, then I got a few questions. We get together with a pre-AGM meeting with Brett, Chris, David, and yeah, I would just like to say it is always very well conducted. We have got ongoing issues with you guys about remuneration and the structure and stuff, but generally, Brett is fantastic at explaining what is going on in the business, which as an outsider, it is hard to understand.
Tabcorp, you think it would be an easy business to run, Aussies are big punters, but it is very competitive. There is lots of regulation. Some of that regulation is state-based and applies to Tabcorp but not to competitors. So, yeah, so if some of my questions seem critical, it is not because I do not think you are doing a good job.
Appreciate them.
So, you are trying to take strategic actions, which is fantastic, thinking of the long term of the business. First question, you are hoping to acquire BetMakers for about AUD 280 million. You had a pretty good explanation of how that acquisition came about, I think, Brett, in the pre-AGM meeting. I just think it might be interesting for people to know how that happened and what the risks are.
Thank you, Steven. I did explain that in my speeches before as well. BetMakers is an important acquisition for us because, well, firstly, we are a customer of theirs, so they are a commercial partner of ours originally, so we know the business, and we know the management team, we know their product set, and we have used their technology. Understanding the acquisition is obviously an important part of any M&A activity. That is the first point. Secondly, we talked about this leapfrogging our technology roadmap, and that is about making sure that we are on the right platforms at the right time so we can give customers the right experience, and just untangling ourselves from any technology of the past and making sure that we continue to be relevant. We think it is a way to fast-track that.
We think it is a global platform that is super interesting from a technology perspective, but also gives us this B2B capability in other markets. For a number of reasons, not the least of which is their personal capability. They have got a really great team, a really strong CEO, and look, we cannot wait to get them on board, frankly.
Okay, thank you. I was going to ask you about AUSTRAC, but I think they have not come to the party and told you exactly what is going on, so I will skip that one. Last question, it is more a question about the industry as a whole. It strikes me that you have got a fundamentally difficult business. On the one hand, you make most of your revenue and profit from people who are big punters. On the other hand, some of those could be problem gamblers or could be people laundering money or whatever. If you spend too much time and effort and money- management time, policing that. It costs a lot, and the gamblers tend to go to your competitors, and then revenue and profits drop. Thinking of the industry as a whole, is there a better way things could be done than they currently are?
Oh, it's a broad question. I mean, a couple of things, I think. Look, one, you're right. This is a highly regulated industry, and we all know that. The team are professionals, we operate in that environment, so of course we make the investments to respond to those regulatory environments. So, very happy to do that. We're very focused on customer behavior, ensuring that customers are protected. We don't want people laundering money. We don't want to be breaching any of those restrictions that we're part of. From an industry perspective, our competitors have the same issues. Everybody's regulated. So, they're regulated in different ways, as you pointed out, but everybody is regulated.
It's our job to make sure that we put the best products into market, and we compete as hard as we can, and make sure, like Gil said in his address, that we keep at the forefront of our mind that we protect our customers, and we make sure that it's a safe gambling environment, and we're doing the right thing. And we continue to invest in that way, and we think we've got the balance right.
Okay. Thank you.
Okay. Is there any more questions from the room? No? Okay. I'll now ask Chris to, if there are any questions via the online meeting platform.
Thank you, Chair. The first question I have here is from shareholder Stephen Mayne, who asks, "The AFR published a story on 24 August about the McLachlan brothers and their dealings in Dabble shares. It was a bit hard to follow, but could the Chair and CEO both please summarize what happened and how the ongoing conflicts of interest are being managed, with Tabcorp being one of the largest shareholders in Dabble, while the CEO's brother is also a top 10 shareholder, having bought the shares off his brother? Also, do the brothers have any profit-sharing understandings on their Dabble shares or any preemptive rights to each other?
Thank you, Steven. I will answer that. I might ask Gil to make a couple of comments at the end. With respect to Dabble, Gil's shareholding in Dabble was declared to the company prior to him joining the company. It was also declared to the regulators, so I went through the full probity process. He sold his stake as requested by the regulators, and we have taken a view, and quite a clear view, that there is no conflict whatsoever here. So, as a board and a leadership team, we are comfortable. I do not know, Gil, if you wanted to comment at all.
No, Chairman, other than he was a preexisting shareholder as well. I sold them to him, I declared them, and there is no broader arrangements.
Thank you.
Chair, we have a further question from Stephen Mayne, who asks, "The CEO was a well-known racehorse owner and punter before he took the job as Tabcorp CEO. If he wants to now have a bet, does he have to do it with a rival agency, or do our policies allow Tabcorp personnel to bet with the company? Also, what is the company's policy on directors and KMP having ownership stakes in racehorses and greyhounds? Is it regarded as alignment and a sign of passion for the industry, or a potential conflict of interest which needs to be managed, disclosed, or even potentially prohibited?
Thank you, Steven, for that question. We don't see any conflict on either of those matters. We're not expecting Gil to bet through Sportsbet or Ladbrokes or a competitor. We do think it's alignment around our product set. It's obviously subject to the usual rules and regulations of all of our customers, and we treat everyone equally.
Chair, one final question online from Stephen Mayne on this item. His question reads, "The AFR reported on 16 August that the CEO held discussions with DAZN about a possible acquisition of Foxtel only 18 months after it was purchased from News Corp. The paper claimed we are paying Barrenjoey investment banker Matthew Grounds to advise on the issue. What is our current arrangements with Barrenjoey? Is it a live mandate just to purchase the acquisition of BetMakers, or are we exploring other options? Did the board investigate the leaking of this Foxtel situation, and does it understand who leaked it and why?
Okay. Thank you, Steven. Clearly, you're reading the AFR, which is good of you. Look, with respect to our investment banking partners, we've got non-exclusive relationships with investment banking partners. We have relied on a banking partner for our BetMakers deal. That is Barrenjoey. And that's all we need to say on that matter, I think.
Chair, there are no further questions on this item.
Okay. As there are no more questions, that concludes this item of business, and we'll move to the next agenda item. Item 2A on the agenda is the re-election of David Gallop as a director of the company. David's been a Non-Executive Director of Tabcorp since July 2020. He retires in accordance with the constitution, and being eligible, has offered himself for re-election. David is Chair of Tabcorp's People and Rem Committee, and a member of the Risk, Compliance and Sustainability Committee, and the Nominations Committee. He is considered by this board to be independent. The board, with David abstaining, unanimously supports the re-election of David Gallop as a director of the company and recommends that shareholders vote in favor of this resolution. I'll now invite David to address the meeting.
Thanks very much, Brett, and good morning to everyone. I joined the Tabcorp board in July 2020, and I currently serve as Chair of the People and Remuneration Committee, and as a member of the Risk, Compliance and Sustainability Committee, and the Nomination Committee. During my time on the board, Tabcorp has undergone significant change, including the demerger and renewal of the Victorian Wagering and Betting Licence, and a reshaping of the business around a clearer strategic game plan under Gil's leadership. More recently, the launch of One Pool, alongside the new retail commercial model and TAB Live, illustrates the importance of working constructively with racing bodies, regulators, and venue partners to deliver change. My career has largely been spent at the intersection of sport, media, regulation, and complex stakeholder relationships, including as the CEO of the National Rugby League and the CEO of the Football Federation of Australia.
I believe that experience is particularly relevant as Tabcorp works with governments, regulators, racing and sporting bodies, venue partners, and the broader community to deliver its strategy responsibly and sustainably. In my role as Chair of the People and Remuneration Committee, I've been particularly focused on ensuring that Tabcorp has the right leadership, culture, and accountability, and that remuneration outcomes appropriately reflect financial performance, strategic execution, and risk outcomes, as well as meet the expectations of our shareholders. Under Brett's leadership, this is an extremely hardworking and dedicated board, and I'm encouraged by the progress we've made as a company since Gil joined. I'm excited by the opportunities that lie ahead for Tabcorp to create genuine value for shareholders. It will be a privilege to continue serving on this board. I thank you for your support.
Thanks, David. This resolution is now open for discussion. We did not receive any questions prior to the meeting on this item, so we will move straight to any questions from the room, if there are any questions on this item. Steven again.
I would like to reintroduce Steven of the Australian Shareholders' Association.
Yeah, just one quick question. We are voting for, David. Our only one issue is, once someone has been here since, well, it was nearly the last century when you came on board, we do not consider anyone that has been around that long as an independent, I guess, director, notwithstanding your knowledge, et cetera, which you have talked to well. Just if you could speak to that, like, why should we consider you independent?
I am not sure if it is the last century. He might mean the last decade.
I think that is when you were born, was what he was trying to say.
Thanks, Steve. This board has undergone significant change in my time, and I think there is value in some continuity from that journey. Of course, when I joined the company, a big part of the business was The Lottery Corporation and the lottery business, and that has all changed, and now we are in a new phase under Gil's leadership, where we are making some really big strategic steps, and I think Gil has outlined those to you this morning, and we are seeing real progress on those things. I would suggest to you that there is value in my continuity and my experience on the board, and that is why I am asking for your vote today.
Yeah. We will just reiterate also, we absolutely see David as independent. Are there any other questions from in the room? Chris, are there any on the online meeting platform?
No questions online.
Okay. As there are no more questions, we've now finalized discussion of this item. The proxy votes received prior to the meeting in relation to this resolution are now shown, or will be shown, on the slide presentation. I now move that David Gallop be reelected as a Director of the company. Please cast your votes by filling out the yellow ballot paper or online using the Get a Voting Card button. From the proxies received, this resolution will pass comfortably. Congratulations, David, on your reappointment. Well done.
Thanks very much, Brett, and thanks to shareholders.
Okay. We'll now move on to the next item of business. Item 2B is the reelection of Karen Stocks as a Director of the company. Karen has been a Non-Executive Director of Tabcorp since March 2023. She retires in accordance with the constitution, and being eligible, has offered herself for reelection. The Directors consider Karen to also be independent. Karen is a member of Tabcorp's Audit Committee and the Risk, Compliance and Sustainability Committee, and the Nomination Committee. The Board, with Karen abstaining, unanimously supports the reelection of Karen as a Director of the company and recommends the shareholders vote in favor of this resolution. I'll now invite Karen to address the meeting.
Thank you, Brett, and thank you for the opportunity to address you in support of my reelection. As Brett has mentioned, I've been a Non-Executive Director of Tabcorp since March 2023. I currently serve on the Audit Committee, the Risk, Compliance and Sustainability Committee, and the Nomination Committee. My time on the Board has strengthened my commitment to the business and my enthusiasm for what Tabcorp can achieve. For me, a central opportunity in Tabcorp's game plan is to continue to bring digital, retail, and media together in a more connected and consistent customer experience. My executive career has focused on technology, digital innovation, media, data, and customer experience, including serving as the Global Vice President of Data, Audience, and Measurement at Google. I bring that global leadership experience to the Board's oversight of strategy, investment, and risk.
Technology and data can help us better understand and serve customers, improve how the business operates, and identify potential customer harm earlier. But innovation must go hand-in-hand with responsible use of data and effective controls. The same discipline applies to AI, pursuing opportunities to improve productivity and customer experience while carefully managing the associated risks that come with that. If re-elected, I continue to bring independent judgment, constructive challenge, and a strong commercial focus to the board, with a commitment to delivering sustainable shareholder value. I would be grateful for your continued support. Thank you.
Okay, thank you, Karen. This resolution is now open for discussions. We didn't have any questions prior to the meeting, I think, Chris, so we'll move straight to any questions from anyone in the room. Is there any questions from the room? Doesn't look like it. I will now ask Chris again, are there any questions via the online meeting platform?
No questions online, Chair.
Okay, thank you. As there are no questions, we've now finalized discussion of this item. The proxy votes received prior to the meeting in relation to the resolution are now on the slide, and I now move that Karen Stocks be re-elected as a director of the company. Please cast your votes by filling out the yellow ballot paper or online using the Get a Voting Card button. From the proxies received, it seems as if resolution will pass comfortably. Congratulations, Karen. Okay, we'll now move on to the next item of business. Item 2C on the agenda is the election of Vivian Stewart as a director of the company. Vivian commenced as a non-executive director of the company in August this year, after serving as an observer since November 2025.
He retires in accordance with the constitution, and being eligible, has offered himself for election, sorry. The Directors considered Vivian to be independent also. Vivian is a member of our Risk, Compliance, and Sustainability Committee, and the Nominations Committee. The Board, with Vivian abstaining, unanimously supports the election as a Director of the company and recommends that shareholders vote in favor of this resolution. I would like to ask Viv to address the meeting.
Thank you, Chair, and good morning, everyone. I am pleased to stand for election to the Tabcorp Board today. As Brett mentioned, I began serving as an observer to the Board 11 months ago, and formally commenced as a Non-Executive Director on the 7th of August this year, following probity approvals. I am currently a member of the Risk, Compliance, and Sustainability Committee, and the Nomination Committee. I have spent much of my career in technology, telecommunications, corporate advisory, and commercial operations. I have more than 17 years of experience as a Director of ASX-listed companies, and have worked on a broad range of public and private transactions, including mergers and acquisitions and capital raisings, many of them international.
My time as an observer has given me the opportunity to gain a deeper understanding of Tabcorp, its people, and its strategy ahead of my formal appointment, and I have every confidence in this executive team and Board. I joined at an important point in Tabcorp's transformation. The business is now stronger, more focused, and effectively executing its strategy to deliver long-term growth. This is about disciplined execution, modernizing technology, simplifying the business, and maintaining strong oversight of cost, delivery, risk, and opportunity. By way of example, the proposed BetMakers acquisition, if completed, includes a significant integration agenda to realize synergies and the opportunity to grow Tabcorp's global wagering and media services business. I would be honored to serve on the Board and ask for your support for my election. Thank you.
Great. Thank you, Vivian. This resolution is now open for discussion. We did not receive any questions on the online platform, I do not think, first. Are there any questions on this item in the room? Nope? Okay, thank you. There is nothing else on the online platform?
No questions received on this item online, Chair.
Okay. As there are no more questions, we have now finalized discussion of this item. The proxy votes received prior to the meeting in relation to this resolution are now shown on the slide. Big number there. I now move that Vivian Stewart be elected as a director of the company. Please cast your votes by filling out the yellow ballot paper or online using the Get a Voting Card button. From the proxies received, it seems that this resolution will pass comfortably. Congratulations, Vivian, on your appointment. Okay. We will now move on to item three of business. Item three of the agenda is the adoption of the company's remuneration report for the financial year ended 30 June 2026. The REM report is set out in Tabcorp's 2026 annual report and explains our remuneration framework and the outcomes for the year.
Tabcorp's remuneration framework is designed to attract, motivate, and retain the best talent, reward performance, and align executive remuneration outcomes with the creation of long-term sustainable value for all shareholders. As I mentioned earlier, Tabcorp delivered a strong performance in FY26. Revenue, earnings, and profit all increased, while the company also made significant progress against its key strategic priorities. The board also assessed performance during the year against measures in the STI and the risk modifier, including the commencement of the AUSTRAC investigation. In determining the STI outcome for the MD and CEO, given the exceptional year, Gil's leadership and his significant individual contribution to outcomes, the board added an uplift of 10 percentage points, resulting in an STI outcome of 126.6% of target for Gil. The board considered this was more reflective of his performance than which was calculated via his scorecard.
In addition, recognizing the regulatory and compliance matters that the company faced during the year, the board exercised discretion, applying a risk modifier to reduce the STI outcome for the MD and CEO down by 20 percentage points, resulting in a final STI award equivalent to 106.6% of target, or 71.1% of his maximum opportunity. And we applied that risk modifier to the STI outcomes of all other ELT members, as well as for certain general managers with direct accountability for compliance matters during the year. The board viewed that as an appropriate step to take and represents a balanced outcome for reflecting the group's overall performance, the interests of shareholders, and the need to fairly recognize management for a very strong year. No long-term incentives vested during FY26, with both the FY23 and FY24 LTI plan grants lapsing in full, as applicable targets were not achieved.
So these STI and LTI outcomes highlight the strong linkage to our remuneration framework between business performance, balanced REM outcomes for executives, and the experience and expectations of you, our shareholders. The board unanimously recommends that shareholders vote in favor of the resolution to adopt the 2026 remuneration report. The vote on this resolution is advisory only and does not bind the directors or the company. However, the board will take the outcome into consideration when determining future remuneration practices. This resolution is now open for discussion. There were no questions received prior to the meeting, I don't think. Are there any questions on this resolution in the room?
Mr. Chairman, I'd like to reintroduce Steven van Emmerik of the Australian Shareholders' Association.
Yeah, thanks, Mr. Chairman. I've got a bit of a footy analogy here in honor of Gil.
Excellent.
When the ASA and many other associations look at executive pay, the first step they often do is they just look at similar-sized companies and they go, "Well, are you sitting kind of in your peer group?" I guess a few years ago, we asked Tabcorp what their peer group was, and we got a list of 29 companies that I think were bigger than them and none that were smaller than them.
I guess for the footy analogy, it's like you're playing for Williamstown, but you're getting paid like you're paid for St. Kilda, which is probably not a bad place to get paid. I note that Tabcorp lost AUD 1.36 billion a couple of years ago, and at the current rate, it'll take maybe 15, 20 years to make enough profit to recoup those losses. Hopefully quicker. I think things are heading in the right direction. So, paying execs more than their peers hasn't always led to good results. Why do you pay your execs at above the rate of comparatively sized companies?
Thanks, Steven. We don't. We do peer group analysis. I think what you're missing is the complexity of Tabcorp. This is quite a complex business. You pointed that out, actually, in some of your questions. There's a lot going on here. There's multiple questions and multiple business in multiple geographies, dealing with regulators in a highly complex and difficult environment, not to mention the competitive environment that we're in. And we're in a competitive environment for talent as well. It's really important to this board to hire the best and brightest in the business, and we think we've got that in Gil.
We think that we've got that in the leadership team here, guys all sitting in the front row here, as an example. So, we're very happy with our REM practices. We're very happy with the peer group that we compare them to, and we're continually looking to get better and want to make sure that our executives are paid in line with the work that they do and the contribution they make to shareholders. Are there any other questions in the room? Nope? Okay. Anything on the online platform?
Chair, there are no questions online on this item.
Okay. As there are no more questions, we have now finalized discussion of this item. The proxy votes received prior to the meeting in relation to this resolution are now shown on the slide here. I now move that the REM report for the company for the year ended 30 June 2026 be adopted. Again, please cast your votes by filling out the yellow ballot paper or online using the Get a Voting Card button. I am advised that based on the proxies received and the votes held on the floor of the meeting and online, the resolution to adopt the remuneration report will be passed comfortably. Thank you all for your support, and we will now move on to the next item of business. Item 4 is the proposed grant of options to the MD and CEO, Gillon McLachlan, under Tabcorp's Long Term Performance Plan.
If shareholder approval is obtained, the options will be subject to a performance measure based on the achievement of a return on invested capital, or ROIC, performance condition measured over 3 financial years. The ROIC performance condition is considered an appropriate measure as it focuses management on achieving targeted returns on Tabcorp's invested capital and ultimately delivering healthy shareholder returns. The ROIC performance targets for the FY27 LTI grant, as disclosed in the notice of meeting, are based on Tabcorp's current 3-year business plan and do not incorporate any contribution from the proposed BetMakers acquisition. Given the acquisition is not yet completed and is subject to a number of conditions, it was not considered appropriate to include any forecast benefits or impacts from BetMakers in these ROIC targets or indeed in our business plan just yet.
If the acquisition completes, the board will assess whether any adjustment to future performance measurement or target setting is appropriate in light of the changed business profile and the capital base of the company. Any such adjustments would have regard to the purpose of the ROIC measure, shareholder interests, and remuneration governance principles, and be transparently disclosed in future remuneration reporting. The board, with Mr. McLachlan abstaining, recommends that shareholders vote in favor of the resolution, and this resolution is now open for discussions. There were no questions received prior to the meeting in relation to this item, so we will go straight to questions in the room. Are there any questions on this item in the room?
I would like to reintroduce Steven of the Australian Shareholders' Association.
Yeah. Thanks, Mr. Chairman. Hardly any other companies use options as the basis for calculating executive payments, particularly large companies. Practically everyone else uses performance rights, which are basically shares, which are the same thing that shareholders have. Why does the board continue to believe that options provide a better shareholder alignment than performance rights, given the options, it's an asymmetric payoff, so sometimes you make a heap, sometimes you make bugger all, and the difficulty shareholders have in understanding what they are, or it's a very complex, opaque kind of calculation?
Thank you, Steven. This is where we got the sort of fundamental disagreement on long-term incentive plan structures, I think, and we've discussed in the past. I think we discussed this last year as well. We're very comfortable with the option structure. Obviously, it's coupled with ROIC, so having the return on invested capital that's aligning to the three-year plan we think is very important. So having the option and the ROIC measure together we think is the right long-term incentive structure.
We think it does align perfectly with shareholder growth. It's all about driving the share price up. It's not about getting rewards if the share price goes down. We're very comfortable with the structure. There are other companies on the ASX that have similar LTI structures. We're not the only one, of course. The work we've done in the peer group, we've looked at, we're very happy with it. Okay, what about online meeting? Anything on the online channel?
Chair, we have one question online from shareholder Stephen Mayne, and his question reads, "As we contemplate this latest LTI grant to the CEO, could he please summarize his other interests in the gambling industry? Is he still a special advisor to Crown Resorts owner Blackstone? If so, does the money he get from that job, is it taken into account when determining the size of his pay arrangements with Tabcorp? Also, apart from his brother's stake in Dabble, do the McLachlan family have any other investments in the gambling industry, including any connections to racehorses which Tabcorp may offer wagers on?
Thank you, Steven, for your question, for your broad question. Gillon, did you want to explain?
Thank you, Chairman. Trying to go back to the start. The Blackstone special advisor role I still have, that was advised to the board prior to me signing with Tabcorp and signed off by the board
Yep
and disclosed on all probity applications. I have no dealings in any or no involvement in any way through that with the operations of Crown Casino. I have no other wagering investments to my recollection. I would have disclosed them to the board, I am sure, if I had those. I have an extensive list of underperforming ownership interests in minority stakes in horses, which have been proven to be spectacularly unsuccessful. But I will continue my fruitless pursuit of Group 1 success.
Thank you, Gillon. And of course, Steven, the board obviously looked at these matters in detail, and we are comfortable. As there are no more questions, we have now finalized discussion of this item. The proxy votes received prior to the meeting in relation to this resolution are now shown on the slide. I now move that approval be given for all purposes to grant options to Gillon McLachlan under the Tabcorp Long Term Performance Plan and on the terms summarized in the explanatory notes. Again, please cast your votes by filling out the yellow ballot paper or online using the Get a Voting Card button. It seems from the proxies received that the resolution will comfortably pass. That concludes the formal business of the meeting. If you have not already done so, please complete your ballot papers or submit your votes by using the online meeting platform.
For those in the venue, please hand your completed ballot papers to the registry staff when you leave the room. The poll will close in approximately 5 minutes' time, and the results of the poll will be advised to the ASX as soon as possible this afternoon. Ladies and gentlemen, thank you for joining us today and for your ongoing support. We are pleased with the progress we have made in FY26, particularly in the delivery of the key strategic items. Our focus in the year ahead will be the continued execution of our game plan. We look forward to showcasing our omnichannel offering at Flemington tomorrow for Derby Day and obviously across Cup Week. I now declare the meeting closed. Thank you for joining us.