Country pubs ditch TAB terminals as Tabcorp fee hike bites
Regional and independent pub owners are ripping out Tabcorp's electronic betting terminals and replacing them with wine bars and dining spaces after the wagering giant hiked weekly fees and slashed commissions, with industry bodies warning more venues are set to follow.
Jamie O'Keeffe and Sam Fielke, owners of the Kyneton Hotel in Victoria, earned about $600 a week — roughly $30,000 a year — in commissions from their pub's two TAB terminals. Under Tabcorp's new retail model, they calculated they would instead be $18 out of pocket each week. The pair converted their sports bar into an Italian wine bar, which turned over $3000 in its first weekend alone.
"It was completely unviable economically for us to have the TAB anymore," O'Keeffe told the AFR. "We are on track to triple the amount we would have earned for having a TAB by having an Italian wine bar."
The shake-up follows a major retail overhaul introduced by Tabcorp chief executive Gillon McLachlan last year, under which the company scrapped fees for hosting terminals and instead required venues to commit to five-year deals by July 1, 2026. This included added weekly membership fees and upfront costs of up to $24,000 for next-generation terminals.
Regional pubs with lower turnover have been hit hardest, as the new commission structure favours higher-volume venues. Commissions for Australian Hotels Association members start at just 1 per cent on the first $7500 turned over, tapering to zero after three years.
Queensland publican Rob Comiskey, who also declined to sign the new deal, has begun redecorating seven pubs that previously hosted TAB terminals. Other venues to remove terminals include Poachers Paradise in Rutherglen and Brisbane's Transcontinental Hotel, which ended a 20-year Tabcorp partnership last month. "We partner with like-minded businesses that appreciate loyalty," the venue's owners said on Instagram.
Australian Hotels Association NSW chief executive John Whelan said he wasn't surprised operators were converting TAB areas into more profitable bar and dining space amid rising costs. "We're now fielding calls from venues which signed up to the new agreement and are now looking to pull out," he said.
Tabcorp maintains the new model is working, citing about 90 per cent of its roughly 3700 venues remaining in the network, ahead of an analyst projection of 80 per cent uptake. Half-year results in February showed cash revenue up 2.8 per cent and digital in-venue turnover up 12.3 per cent.
"Whilst changes to our commercial model were necessary, we are very focused on ensuring that pubs and clubs in smaller communities are supported and our customers across Australia can continue to access Tab services," a company spokesman said.
The bookmaker has steadily lost market share to online-only rivals Sportsbet and Ladbrokes over the past decade. O'Keeffe said fewer than half the punters visiting his pub used the TAB terminals, with most betting via phone instead. "I'm a punter, and from a punter's perspective, [the TAB] has the worst app and pretty much the worst odds," he said. "No one has come to us and said 'we wish you'd kept the TAB.' Not a customer."
Jonathan Jackson, 10th August 2026
