Australian betting giants Tatts and Tabcorp are petitioning the country’s High Court for permission to appeal a court decision in Victoria requiring them to pay the state millions of dollars in health benefits levies on their machine gaming operations.
Tatts expects the levy to impact its earnings by A$25.7 million, while Tabcorp said the levy would affect its earnings by an estimated $19 million after tax.
They are challenging a successful appeal by state Treasurer Michael O’Brien of a ruling in 2013 that significantly reduced the levies. Tabcorp and Tatts had argued they should not pay the full amount for the 2012-13 financial year because they lost their duopoly over non-casino machine games 46 days into the year. But Victoria’s Court of Appeal on July 1 overturned a decision by the Supreme Court in their favor.
Tabcorp, meanwhile, has reached an agreement with the government of the Australian Capital Territory government to acquire state-owned betting operator ACTTAB for A$105.5 million.
ACTTAB provides totalisator, fixed odds wagering and keno through a distribution network comprised of 53 retail outlets as well as telephone and internet platforms.
As part of the acquisition, the ACT government will issue Tabcorp a 50-year exclusive totalisator license, a 15-year sports betting license and 50-year licenses for keno and track-side products.
Tabcorp expects the acquisition will generate EBITDA of approximately $14 million in the year following completion of integration of the business and will be accretive to earnings.
Managing Director and CEO David Attenborough called it “a unique opportunity for Tabcorp to secure long-term licences on highly favorable terms in a jurisdiction that is complementary to our existing wagering and keno businesses in Victoria and New South Wales.”
