Australian wagering giant Tabcorp Holdings Limited has announced a net deficit of $16.46 million for the twelve months to the end of June largely due to the costs associated with its planned $4.8 billion takeover of rival Tatts Group Limited.

Melbourne-based Tabcorp Holdings Limited operates Australia-facing sportsbetting brands including Sky Racing and and also has experience in the United Kingdom thanks to a partnership with The Sun newspaper. It revealed a 1.9% increase year-on-year in annual net revenues to $1.75 billion although its earnings before interest, tax, depreciation and amortization fell by 2.3% to $399 million.

“[Fiscal year 2017] was a strategically important year for Tabcorp [Holdings Limited] as we reshaped the business for growth,” read a statement from David Attenborough Managing Director and Chief Executive Officer for Tabcorp Holdings Limited. “We made investments in acquiring Intecq, establishing Sun Bets and progressing the combination with Tatts [Group Limited], which we expect to complete by the end of the year. We also strengthened Tabcorp [Holdings Limited’s] risk management and regulatory compliance capability, which is scalable in the context of the proposed combination with Tatts [Group Limited]. These are significant initiatives we have undertaken to better position Tabcorp [Holdings Limited] to deliver sustainable growth.”

Tabcorp Holdings Limited additionally stated that annual revenues from its wagering and media businesses had remained static at $1.48 billion while takings from its keno operation advanced by 2% year-on-year to reach $168.38 million. At the same time, the firm’s operating expenses for the twelve-month period grew by 7.1% to $397.56 million along with a 3.9% rise in its tax bill to nearly $61.91 million.

“At the same time, we accelerated our digital investment in our wagering and media and keno businesses while gaming services continued to expand geographically,” read the statement from Attenborough. “The increase in operating expenses was driven by the acquisition of Intecq and planned investments in capability, technology, marketing, risk and compliance. We expect our investment in these areas to reduce the risk associated with the Tatts [Group Limited] integration.”