As part of the deal, Tabcorp has agreed to pay an initial AU$600 million to the state alongside a further AU$30 million per year over the remaining 19 years. This means that over the course of the contract, the operator will pay the state around AU$1.2 billion. However, as the payments are set fees and not linked to inflation, the true value of the deal will be around AU$864 million.
Speaking to the ASX, Tabcorp CEO, Adam Rytenskild, said:
Tabcorp Seals 20-Year Extension to Victoria Wagering LicenseRytenskild said in his presentation that that the terms of the new license in Victoria will have a significant impact on the company’s profitability. He noted that had the new license been in place earlier, the company’s earnings in the last financial year would have been AU$140 million higher.
Sportsbet and Entain Lose Out
Victoria is home to many of Australia’s highest profile racing events such as the Melbourne Cup and one of the most lucrative retail betting markets in the country. And with Tabcorp’s current deal coming to an end, major gambling operators such as Sportsbet, owned by Flutter, and Entain-owned Ladbrokes had made proposals to take on part or all of the state’s retail wagering license.
Earlier this year, the state regulator intimated that it would consider opening the local market to multiple gambling operators. This led to several bids that included applications to rights for both online and retail sports betting. At the time, Tabcorp stated that it would be happy to share the wagering license provided that it would retain exclusive rights to the retail market.
Tabcorp Seals 20-Year Extension to Victoria Wagering LicenseTabcorp’s insistence that it would not share its database with competing operators if the license was split saw Entain withdraw its bid at the eleventh hour.
Additional Support Payments
In 2011, Tabcorp entered into its current agreement with Victoria. This involved an initial payment of AU$410 million. While the company is now exempt from paying a fee under its new joint venture with the racing sector, it has committed to providing $15 million in transitional support over the course of the next three years. It will also contribute $2.5 million into existing animal welfare programs within the racing industry.
The new deal also requires that Tabcorp pay AU$2 million to fund gambling harm research and assist problem gambling programs within the state.
Ciaran has been working within the Gambling Industry as a deep analyst since 2019. His deep knowledge and understanding of all the gambling regulations, and processes makes him a true asset, and an always valuable point of view for Gambling Industry News, allowing us to cover every topics from a brand new perspective.