Tabcorp secures exclusive Victorian wagering licence for 20 years
Tabcorp Holdings Limited (Tabcorp) has successfully obtained the Wagering and Betting Licence (New Licence) from the Victorian Government marking a significant milestone in the company's journey after its demerger.
This new licence, which will last for 20 years starting in August 2024 brings about a modernised framework that promotes taxation and fees in Victoria, thus improving Tabcorp's competitive position.
Some key features of the new licence include ending the joint venture arrangement with the Victorian Racing Industry (VRI) and terminating industry funding obligations.
This transformative change ensures a level playing field by aligning Tabcorp with operators in terms of wagering taxes and fees related to racing and sports products.
With this new licence, Tabcorp expects to increase its group earnings both in terms of scale and quality.
If these licence terms had been applied for FY23, the company estimates that there would have been a significant increase of $140 million in Group EBITDA.
This translates into accretion for Tabcorp shareholders in terms of earnings per share (EPS).
Return on invested capital (ROIC).As part of this agreement, Tabcorp will make a payment of $600 million to the government on June 28, 2024, followed by 19 annual payments of $30 million starting on August 16, 2025.
The company plans to cover the payment using existing debt facilities.
Adam Rytenskild, the Managing Director and Chief Executive Officer (CEO) of Tabcorp, expressed his happiness with this accomplishment.
He described it as a result for shareholders, the Victorian Government, and industry stakeholders.
Online bookmaker, Sportsbet had aggressively applied for the licence during the competitive bid process.
Sportsbet's application may have been adversely effected by being seen as one of the country's most aggressive gambling advertisers during a period where there has been considerable backlash and an Australian government inquiry into the levels of gambling advertising.
Tancorp's Rytenskild emphasised that the licence aligns with the reforms in today's betting landscape, which will allow Tabcorp to enhance its total Victorian wagering business.
Rytenskild praised the efforts between Tabcorp and the Victorian Government in designing a retail and tote licence that addresses the industry's changes.
This includes addressing concerns about betting sites licensed in the Northern Territory.
He sees this licence as a model for the times, ensuring a betting environment for everyone while also providing stronger protections for exclusive retail operations.
For the time being, this new licence puts Tabcorp on a par with its competitors in Victoria.
This will enable the company to invest more in its products, offerings, and overall customer experience.
According to a Tabcorp spokesperson, “Tabcorp is excited about collaborating with the government for the next twenty years through the updated wagering licence.
“Our goal is to provide Victorians with an enjoyable and cutting-edge entertainment experience as well as a retail wagering system.
“All of this will be done while prioritising the long-term viability of Victoria's greyhound racing, harness racing and thoroughbred racing industries.”