Horse Flu Outbreak Hits Australian Betting Firms

Shares in Australian betting companies fell on Monday after an outbreak of equine influenza disrupted Australian horse racing.

Tabcorp Holdings, Australia's top wagering group, said it expected to lose about A$150 million (US$124 million) in turnover after race meetings across the country were cancelled at the weekend, sending its shares down over 4%.

Tabcorp warned of further losses if Australian authorities extend a nationwide ban on horse movement as Australia gears up for the start of its spring racing season.

There have been no thoroughbred or harness race meetings since Aug. 25 after the country' first outbreak of equine influenza began to spread out of control over the weekend.

"Based on its experience to date, if Australian racing (thoroughbred and harness) were not to resume until next weekend, Tabcorp expects that the loss in turnover will be in the order of A$150 million," Tabcorp said in a statement.

"This will translate to an adverse impact on Tabcorp's group earnings of approximately A$5 million after tax," it added.

Rival gaming firm Tattersall said in a statement that the shutdown has to date not materially affected its business results, but if the situation continued its potential weekly loss in earnings before interest, taxes, depreciation and amortization would be around A$2 million weekly.

Online betting firm Centrebet International said the outbreak may hit its 2008 net profit after tax by A$400,000 if the ban were to continue for a month. "This is on the basis that all horse and harness races are cancelled and not postponed, which is a possibility being considered by the authorities," Centrebet said in a statement.

The losses are another blow for Tabcorp which posted lower full-year profits last week after dumping its former chief executive due to poor earnings performance.

Smoking bans in casinos and an increase in a gaming machine levy are also expected to hurt Tabcorp this year. "There is a risk that the suspension of racing will be extended for a prolonged period. If this were to occur, the weekly loss of turnover and earnings would increase as spring racing is impacted from September," Tabcorp said.

The government had initially ordered a three-day lockdown to try and contain the disease, but the prospect of a longer ban looms after hundreds of horses began to display symptoms.

There are concerns that if racing is halted for an extended period, Australia's richest and most famous race, the Melbourne Cup, which is due to be held in November, could be postponed.