The gambling group, Tabcorp, has secured a new licence agreement with the Victorian government. Under the terms of the agreement, Tabcorp will pay over AU$1bn to the government over the next 20 years. The licence allows Tabcorp to conduct betting activities in Victoria, including taking bets in-person outside of racetracks. The new licence terms will come into effect in August 2024, following the expiry of Tabcorp’s current exclusive licence.
Previously, Tabcorp was required to collaborate with the Victorian racing industry through a joint venture arrangement. However, this requirement has been removed, along with the termination of the current industry funding obligations. Instead, Tabcorp will pay wagering taxes and racing and sports product fees on the same basis as other operators.
As part of the new agreement, Tabcorp will pay a licence fee of AU$600m in June 2024, followed by 19 annual payments of AU$30m starting from August 2025. The company plans to fund the initial payment using existing debt facilities.
Tabcorp’s CEO, Adam Rytenskild, sees the new licence as essential for the company to compete with its rivals in Northern Territory. He believes it will bring positive outcomes for shareholders, the Victorian government, and industry stakeholders, and allow Tabcorp to expand its wagering business in Victoria.
The licensing process in Victoria began in June 2022 when organisations were invited to express their interest in the wagering licence. After a formal invitation in April 2023, applications were subject to rigorous assessment based on various criteria, including probity, harm minimisation, and economic benefits to the state. The new licence includes measures to promote responsible gambling and harm minimisation.
In its most recent earnings report, Tabcorp reported a 6.1% decline in revenue compared to the previous year. However, there was an increase in digital wagering turnover. Betting and media revenue also fell by 5.4% in the three months to September 30. Tabcorp faced penalties in Australia, including a record AU$1.0m fine in Victoria for its conduct during a system outage during the 2020 Spring Racing carnival.
