Tabcorp and Sportsbet compete for Victorian betting license

July 20, 2023 3:42 am.by Staff Writer

The Victorian government is cracking down on problem gambling and has initiated a bidding process for the next joint venture wagering partner in the region. Australian bookmakers Tabcorp and Sportsbet are the main contenders in this race, with other rivals having been eliminated.

Tabcorp, which has held the betting license since 1994, and Sportsbet, owned by the London-listed Flutter Entertainment, are vying for the license. The government has presented options for either one exclusive license holder, like Tabcorp currently, or multiple licenses for two or three bookmakers.

While the licenses are typically for 20 years, the government has the option to make changes after the first 10 years. Both Tabcorp and Sportsbet could potentially operate betting shops if the multiple license scenario is chosen.

JPMorgan values the next license for Tabcorp at approximately $750m to $800m, while Andrew Orbach of Taylor Collison estimates the upfront payment could range from $600m to $960m based on valuation models.

The current joint venture between Tabcorp and the racing industry generates annual funding through the “tote,” but this revenue has declined due to the increasing popularity of digital betting platforms like Neds and PlayUp.

A point of contention in the licensing process has been access to customer database information, which led to the withdrawal of Entain Group, the owner of Ladbrokes and Neds brands in Australia, from the bidding process.

The Victorian government is expected to make a decision in October and announce the selected licensee in November. Meanwhile, Entain is under investigation by the Office of Liquor and Gaming Regulation in Queensland due to its establishment of “Labrokes Lounges” in pubs and hotels in the state.

Tabcorp, which currently holds an exclusive license to operate betting shops in NSW and Queensland, has taken legal action against Entain over its sponsorship deals in those regions, arguing that they violate its exclusive license. The Queensland Attorney-General has issued a warning to clubs and pubs about dealing with interstate wagering services providers until the investigation is finalised.

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