2340 GMT [Dow Jones]–The end to greyhound racing in Australia’s New South Wales state is likely to jolt gambling company Tabcorp’s (TAH.AU) earnings, but the pain will likely be worse if other states follow suit. Macquarie estimates that greyhound racing in New South Wales represents 5% of total wagering turnover, but only 3.5%-4.0% of Tabcorp’s total revenue. “If Victoria state were to follow NSW’s lead and ban greyhound racing, on our estimates, this would put a further 3% of Tabcorp revenue at risk,” Macquarie says. “In FY15, turnover for the NSW greyhound racing market was A$1.11 billion, with Victoria greyhounds at A$870 million.” Even if this happens, though, Macquarie expects there to be a high degree of substitution and around 75% of the lost revenue would be redirected to other forms of gambling. In aggregate, the impact on Tabcorp’s revenue would be less than 1%, Macquarie says. It keeps an outperform call on Tabcorp and A$5.17/share price target. TAH last traded at A$4.39. (david.winning[a]wsj.com; [a]dwinningWSJ)
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