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Fiona Simmons December 19, 2023 3 min read
Tabcorp Makes History, Secures 20-Year License in Victoria
The outcome will place Tabcorp on a “level playing field” with its competitors for the first time in the state, CEO Rytenskild says
Australian betting giant Tabcorp has prevailed over its competitors, successfully securing a license to operate retail betting in Victoria. After an intense bidding process, the company secured the 20-year license that would allow it to continue offering wagering at TAB shops and clubs.
Under the new deal with the Victorian government, Tabcorp will have to pay over AUD 864 million ($581 million) for the license. As agreed, AUD 600 million ($403 million) of this will be paid to the state of Victoria in June, two months before its current license expires.
Then, the company would need to make annual fixed payments of AUD 30 million ($20 million) from 2025 to 2043. By the time the final payment was made, Tabcorp would have paid AUD 1.1 billion ($740 million), although the company pointed out that since the payments are not linked to inflation, the actual value was AUD 864 million.
Unlike the current deal, which includes a joint venture with Racing Victoria, the new agreement will not force Tabcorp to pay joint venture contributions. Instead, the company will make annual payments of AUD 15 million during the first three years of its new license. Following that period, the company will be able to retain all retail profits.
The new license marks Tabcorp’s triumph over Sportsbet, which was allegedly planning to split the license between several bookmakers. The development also caused Tabcorp’s shares to spike, temporarily seeing them hit AUD 0.92. The company’s shares are trading for AUD 0.86 as of the time of this writing.
The Deal Will Place Tabcorp on a Level Playing Field
Tabcorp’s managing director and chief executive officer, Adam Rytenskild, commented on the new license, highlighting the robust exclusivity it offers. According to Tabcorp’s head, the new license “puts wind in the company’s sails” and allows it to “ignite its total Victorian wagering business.”
Rytenskild also said that the new license is not only a momentous development for his company and team but also a positive outcome for all of Tabcorp’s shareholders, the Victorian government and industry shareholders.
The CEO added that he is very pleased with the terms of the new license and pointed out that it directly addresses the structural reform required in the modern wagering environment. According to Rytenskild, the terms will place Tabcorp on a “level playing field” with its competitors for the first time in the state.
Rytenskild added that getting the new Victorian license was no easy task considering the regulator’s vigilance in the wake of the Crown Resorts scandals.